April and May clearly show that while California’s economic growth continues, it has slowed from the extraordinary 2000
performance. The state’s slowdown is predominantly centered in the San Francisco Bay Area.
Nonfarm employment increased by 3,200 in May, compared to gains of 20,000 in April and 60,000 in March.
Nationally, nonfarm employment fell by 19,000 during May. Since the beginning of the year, California has accounted
for 73 percent of all new nonfarm jobs in the nation, and 63 percent of all new US jobs over the past year.
During May, government added 8,400 jobs, with reductions in federal and state government employment more than
offset by a 10,800 increase in local government—mainly education. In the private sector, financial services added
2,100 jobs, wholesale trade was up 1,500, and transportation/utilities increased by 1,000.
Services fell 6,400, due in part to a decline of 1,300 in computer services (not seasonally adjusted), the first such
decline since the series has been reported beginning in January 1996. Manufacturing was down 1,500, with the
electronics industries falling by 2,400. On a yearly comparison, manufacturing is down 5,400. Nationally, factories
dropped 124,000 jobs in May and 614,000 over the past year.
California's unemployment rate was unchanged in May at 4.9 percent, although the April rate was revised up 0.1
percentage point from the 4.8 percent originally reported. The rate a year ago was 5.0 percent. While still low by state
and national standards, the unemployment rate of all San Francisco Bay Area counties rose in May.
Residential building in April, measured by the number of building permits issued, rose 13.0 percent from one year ago.
Single-family construction was up 4.8 percent, while the volatile multifamily sector posted a gain of 43.7 percent.
Nonresidential construction, measured by permit values, continued to slide from the January peak. Although April
permits were up only 0.9 percent above the April 2000 level, dollar value during the first four months of 2001 ran 7.7
percent above the same period last year. Strong office construction growth continues to lead nonresidential
construction gains, with the largest increases occurring in the San Francisco Bay Area.
Several developments in California public works construction, including major power plant projects, bode well for
California’s outlook. Heavy (civil works) construction begun during the first four months of 2001 totaled $4.05 billion, up
29.6 percent from the same period in 2000, with substantial growth in power plant construction. Four large power plant
projects were started in Kern, San Bernardino,
and Monterey counties, totaling $1.3 billion. Industry Employment Growth Slows
According to the California Association of 5%
Year-Over-Year Percent Change in Nonfarm Employment
Realtors, California’s real estate market is
beginning to cool off, especially in Santa Clara 4%
County—the state’s costliest region. Statewide
sales of existing single-family homes clocked a 3%
seasonally adjusted annual rate of 495,390 units
in April, up a scant 0.5 percent from one year ago. 2%
Following a significant run-up in March, the
median price of a single-family home dropped to 1%
$262,420 in April.
In Santa Clara County, the median price of an 0%
existing single family home declined to $530,000,
5.4 percent less than the April 2000 median.
Sales of existing homes in the county fell
dramatically, down 39.5 percent from a year ago.
MONTHLY CASH REPORT
Preliminary General Fund agency cash for May was $34 million below the 2001-02 May Revision forecast of $4.44 billion.
Including adjustments for actual April receipts that were not known when the May Revision forecast was prepared, year-
to-date, revenues are $41 million higher than the $70.855 billion that was expected. Although May is a significant revenue
month, June is far more important. As the second-largest month of the year, $8.6 billion is expected during June.
Personal income tax revenues were $69 million above the month’s forecast of $1.863 billion. Withholding was $84
million above the month’s estimate of $1.943 billion. Final payments, which are attributable to the 2000 tax year, were
$161 million above the expected level of $517 million. May’s estimated payments were $85 million, as forecast, and
miscellaneous payments, were $54 million below the projected level of $236 million. Refunds were $122 million above
the estimate of $972 million. The second estimated payment for the 2001 tax year, which is due June 15, will be an
important indicator for how well the estimate is tracking.
Sales and use tax receipts were $149 million below the month’s forecast of $2.216 billion. May represents the balance
of the final payments for first quarter taxable sales, as well as the first prepayment for second quarter sales. It appears
that about two-thirds of this month’s loss was attributable to first quarter sales, while the balance is attributable to the
second quarter prepayment. Based on preliminary
Board of Equalization estimates, first quarter
Ge n e r al Fun d Ag e n cy Cash
taxable sales growth was a weak 2.5 percent. As a
2 0 0 1 Mau Re v ision For e cast
reminder, the sales tax rate was triggered down by
(Dollar s in Billion s)
one-quarter percent beginning with the first quarter. 16.000 Actual Forecast
None of the shortfall is attributable to that rate
reduction because it was taken into account in the 14.000
Bank and corporation tax revenues were $14
million above the month’s forecast of $173 million. 10.000
May is not a significant month for this tax. June,
however, will provide a more meaningful measure,
since the second prepayment for calendar year 6.000
corporations is due in mid-June.
Revenues from the insurance, estate, alcoholic
beverage, and tobacco taxes came in $2 million 2.000
below the $118 million that was expected. The
remaining revenues—pooled money interest 0.000
income and “other” revenues—were $34 million July Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
above the month’s estimate of $70 million.
| 2000-01 Comparison of Actual and Forecast Agency General Fund Revenues
| (dollars in millions)
| MAY | YEAR-TO-DATE
| Percent | Percent
| Revenue Source Forecast Actual Change Change | Forecast Actual Change Change
| Personal Income $1,863 $1,932 $69 3.7% | $40,895 $40,965 $70 0.2%
| Sales & Use 2,216 2,067 -149 -6.7% | 20,135 19,986 -149 -0.7%
| Bank & Corporation 173 187 14 8.1% | 5,553 5,568 15 0.3%
| Insurance 5 15 10 200.0% | 1,174 1,184 10 0.9%
| Estate 79 64 -15 -19.0% | 1,022 1,034 12 1.2%
| Pooled Money Interest 44 44 0 0.0% | 675 722 47 7.0%
| Alcoholic Beverages 24 27 3 12.5% | 264 265 1 0.4%
| Tobacco 10 10 0 0.0% | 116 117 1 0.9%
| Other 26 60 34 130.8% | 1,021 1,055 34 3.3%
| Total $4,440 $4,406 -$34 -0.8% | $70,855 $70,896 $41 0.1%
| This is an agency cash report and the data may differ from the Controller's report to the extent that cash received by agencies
| has not yet been reported to the Controller. Except for "other" revenues, revenues are ranked in descending order of fiscal year magnitude.
| Totals may not add due to rounding. The forecast is from the 2001 May Revision.