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U.S. Retail Sales Update: February 2024 March 14, 2024

U.S. retail sales have dropped 0.4 percent over the last 3 months and grown 1.5 percent over the last 12 months. The 12-month growth rate was below the rate of inflation. 


Inflation Tracker March 12, 2024

Short-term core inflation, as measured by an annualized 3 month average, has been rising over the last several months. The most recent February data shows short-term core inflation running at a 4 percent annual rate. 


Updated "Big Three" Revenue Outlook March 8, 2024

Latest Forecast Unchanged From Last Month, Continues to Suggest Downside Risk. February's tax collections and economic data did not materially change our outlook, with our latest forecast being basically unchanged from last month. Our  forecast continues to suggest there is significant downside risk to state revenues relative to the Governor’s Budget. Specifically, our forecast is about $25 billion below the Governor’s Budget across 2022-23 to 2024-25. That being said, there is still significant uncertainty about how much revenue the state ultimately will collect. It is entirely possible that revenues could end up $10 billion higher or lower than our estimate for 2023-24 and $25 billion higher or lower for 2024-25.


California Housing Affordability Tracker (January 2024) January 24, 2024

Over the last few years, we have seen a rapid increase in California housing costs, led by the dramatic increase in the costs of purchasing a home. Monthly costs for a newly purchased home are about $2,500 higher than they were just a few years ago. Annual income needed to qualify for a typical home is over $220,000—roughly 2.5 times higher than median household income (about $85,000). Further, the annual income needed to qualify for a more affordable "bottom-tier" home is 60 percent higher than the median income. 


Monthly Jobs Report January 23, 2024

California businesses added 23,400 jobs in December. For the fourth month in a row, the state's unemployment rate climbed, surpassing 5 percent for the first time since 2017 (not including the pandemic period). The "Sahm rule," a real-time recession indicator that first triggered on in March, continues to signal the beginning of an economic downturn. 


Did California Enter a Recession Last Fall? October 3, 2023

While recessions are not formally defined for state economies, economic data for the fourth quarter of 2022 and first quarter of 2023 appear consistent with California experiencing a mild recession. The apparent start of a recession in California last fall helps explain why the state faced a revenue shortfall in its most recent budget. How much the economy will continue to dampen the state's fiscal picture moving forward is unclear. However, the threat that the recent slowdown could persist will be a significant risk for the foreseeable future.