Reports

California’s unemployment rate (seasonally adjusted) continued rising by 0.1 point to 5.4%, while the number of unemployed again was above 1 million for the 10th month in a row. The number of unemployed essentially matched the level previously seen in mid-2016 during the pre-pandemic period. California had the second highest rate among the states, behind Nevada at 5.7%. DC also came in at 5.7%.
The net domestic outflow was counterbalanced for the first time in 4 years by an uptick in the level of foreign in-migration. In total, net migration for the state was positive due to this factor, but low at only 45,508. The data, however, is not able to track the number of persons moving from California to other nations. Note that in the chart, the ACS data for 2020 is not statistically significant for this indicator. The point shown for Net Total Migration is taken from the Department of Finance estimates.

The October numbers continued to show relative weakness in the state economy. Nonfarm jobs (seasonally adjusted) dropped by 5,500 in the preliminary results. The results for September were revised down by 2,200 to a gain of 12,700. Over the past three months, nonfarm jobs have grown by only 6,000, compared to 74,200 in the same period in 2023.

In August, California average residential electricity rates (12-month moving average) were 105.6% higher than in the rest of the US. Electricity rates across all three primary end users as well as the cost of fuels remained the highest in the contiguous states. The Center’s electricity data series have been updated with the final rates for 2023 from the US Energy Information Administration. In the final accounting, the average residential utility bill in California increased to $1,736 for the year from the preliminary level of $1,707. As a result, the average California bill rose from 17th highest among the contiguous states to 13th highest. The revised average annual bill in the other states and DC was $1,631.

The September numbers overall came in at strong levels as normal trade activities were affected by labor issues at other ports along the East and Gulf Coasts and in Canada. Origin exports rose 5.9% in nominal terms above the same month a year ago, while total trade through the state’s ports rose to 17.4% of the national total for the month and 16.3% on a 12-month moving average. Trade volumes also reflected continued efforts by shippers to get ahead of expected port closures as well as anticipated tariff increases in the next administration.

The Census Bureau’s recent state migration numbers from the American Community Survey, 1-year estimates again show more people moved (690,127) from California than came here (422,075) from other states in 2023. The domestic inflow was the lowest in the data series (since 2010), while the outflow was comparable to the level in 2018.

The net domestic outflow was counterbalanced for the first time in 4 years by an uptick in the level of foreign in-migration. In total, net migration for the state was positive due to this factor, but low at only 45,508. The data, however, is not able to track the number of persons moving from California to other nations. Note that in the chart, the ACS data for 2020 is not statistically significant for this indicator. The point shown for Net Total Migration is taken from the Department of Finance estimates.

The September numbers were positive but again at relatively modest levels. Nonfarm jobs rose by 14,700 in the preliminary results, below the overall average of 22,100 over the previous 12 months and only 5.8% of the total national gain of 254,000. Nonfarm jobs in August were revised from a modest gain of 6,800 to a loss of 1,200.

The unemployment rate remained level at 5.3%. Total employment rose only 2,100 over the month and only by 6,300 since September 2023. Increasing by 11,400 for the month and by 64,100 over the past 12 months, the number of unemployed again was above 1 million mark for the 9th month in a row, posting the worst levels since the pandemic months in 2021.

In July, California average residential electricity jumped to 10th highest among the contiguous states, compared to 9th lowest in 2010. Electricity rates across all three primary end users as well as the cost of fuels remained the highest in the contiguous states.

The August trade data again showed strong results for California and its ports as shippers continued to surge activity ahead of pending tariffs and the then-threatened East/Gulf labor actions. Origin exports rose 8.3% in nominal terms compared to prior year. Total trade activity through the state’s ports was up 13.6%, with the strongest gains in imports. The August results kept California on track to match the 2023 results in nominal terms, and close to matching in real rerms. The constant doallar terms, however, show the state slightly lagging bor the pre-pandemic and pandemic era peaks.

Highlights for policy makers:
1) 2nd Quarter Real GDP 27th Highest Among the States; 1st Quarter Revised Higher
2) 2nd Quarter Personal Income Growth 4th Highest Among the States; Driven by Medi-Cal Benefits
3) Slowing Job Growth Potential
4) CaliFormer Businesses
5) State UI Fund Debt Passes $20 Billion

The August numbers were positive but at relatively modest levels. Although revisions to the July numbers show stronger growth that month, nonfarm wage and salary jobs grew by only 6,800 in August, the 8th highest level among the states. Employment gains were 8,700.

In August, California average residential electricity rates (12-month moving average) passed a new milepost, coming in at just more than double the average for the rest of the US. Electricity rates across all three primary end users as well as the cost of fuels remained the highest in the contiguous states.

The July trade data showed strong results for California and its ports as shippers produced an early surge in activity in order to stay ahead of pending tariffs and potential labor actions. Origin exports rose 7.3% in nominal terms compared to a year ago. Total trade activity through the state ports accelerated by 22.7%, with the strongest increases coming from a steep rise in imports.
In nominal terms, total trade through the state’s ports in the first 5 months rose 7.9% over the year and 14.8% over pre-pandemic 2019, but still came in marginally lower than 2022.

The Center for Jobs and the Economy tracks closely California’s Trade sector and its importance in creating well-paying, resilient jobs for millions of residents. California’s Trade sector is a national economic powerhouse, with more than 1 in 51 jobs nationwide supported by the sector. To further quantify the impacts of this sector, the Center released a detailed economic study, “Special Report: Economic Importance of Trade & the Ports to Southern California,” which quantified the importance of this sector.

Following the passage of the increase to the minimum wage for specified fast food workers, much attention has been paid to the impacts the wage increase will have on jobs. While anecdotal data, including the closure of legacy fast-food chain stores in California, has made headlines, we are now able to use empirical data to track the law’s impacts on jobs and the economy. Despite what some are saying, the data are clear: newly passed fast food minimum wage laws are leading to job losses in California.

The JOLTS (Job Openings & Labor Turnover Survey) estimates continue to indicate California employers are cutting back on their hiring plans, reducing the likely scale of future jobs growth in the state.

The number of unfilled job openings at the end of June continued the current sharp decline trend, coming in at levels most recently seen during the height of the pandemic in 2020, and comparable to levels experienced in 2017 in the pre-pandemic period. Comparing the job opening rates (job openings as a share of job openings plus total employment), California has diverged strongly from the overall US level which has begun to level off at just below 5.0% as job expansion potential remains higher in the other states.