With the recent receipt of various postponed tax payments, the impact of recent economic weakness and last year's financial market distress on state revenues has become clearer. The postponed payments came in much weaker than anticipated. As a result, we now estimate 2022-23 revenues to be $26 billion below Budget Act projections. Historical experience suggests this weakness is likely to carry into this fiscal year and next. Overall, our updated revenue outlook anticipates collections to come in $58 billion below Budget Act projections across 2022-23 to 2024-25. We will release our Fiscal Outlook next week, which will discuss the ramifications of this revenue shortfall for the state's budget.
U.S. retail sales have grown 1.5 percent over the last 3 months and 2.5 percent over the last 12 months. Retail sales growth has outpaced inflation over the last 3 months, but not over the last 12 months.
U.S. retail sales have grown 2.1 percent over the last 3 months and 3.8 percent over the last 12 months. Retail sales growth has well outpaced inflation over the last 3 months, but not over the last 12 months.
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.
A newly released "early benchmark" of the official state jobs figures shows that payroll jobs declined at an annualized rate of 0.6 percent from September 2022 through March 2023, whereas the official state tally showed growth of 1.8 percent over that period. This amounts to a net decline of about 50k jobs over that period compared to the unbenched tally of +165k jobs.
U.S. retail sales have grown 1.2 percent over the last 3 months and 2.5 percent over the last 12 months. Retail sales growth has outpaced inflation over the last 3 months, but not over the last 12 months.
U.S. retail sales have been roughly flat (0.2 percent decline) over the last 3 months and grown 1.6 percent over the last 12 months.
U.S. retail sales have dropped 0.9 percent over the last 3 months and grown 1.6 percent over the last 12 months.
U.S. retail sales have grown 1.9 percent over the last 3 months and 2.9 percent over the last 12 months. Sales have grown faster than inflation over the last 3 months but slower than inflation over the last 12.
Based on the most recent revenue and economic data, we currently estimate that collections from the state’s “big three” taxes—personal income, sales, and corporation taxes—are likely to fall below the Governor's Budget assumption of $200 billion in 2022-23.
U.S. retail sales (seasonally adjusted) declined 1.1 percent from November to December. The two-month decline was 2.1 percent. In the last 30 years, two-month drops of at least 2 percent have happened around recessions.
U.S. retail sales (seasonally adjusted) declined 0.6 percent from October to November.
U.S. retail sales (seasonally adjusted) grew 1.3 percent from September to October.
California businesses added 19,900 jobs in June, about half as much as recent months and the slowest gain since last September.
California businesses added 42,900 net jobs in May (seasonally adjusted), about the same as April and another month of slower job growth than seen in the past year.