Blog readers will know we keep an eye on new weekly California claims for unemployment insurance as an indicator of labor market and general economic trends. Since February, new claims data have been bouncing around at or near pre-pandemic levels. It's a noisy series and the latest data are subject to revision. So we'll keep watching. Other recent data, such as the official state unemployment rate, suggest that nothing is amiss at the moment. (Unemployment fell last month.)
The governor's May Revise budget is based on an economic projection in which nonfarm employment gets back to its pre-pandemic level towards the end of this calendar year.* That's roughly in line with the UCLA Anderson Forecast. But there are some evident risks out there (inflation leading the Fed to raise interest rates, war, etc.) that could upset that trend or cause a downturn sometime thereafter.
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*https://www.ebudget.ca.gov/2022-23/pdf/Revised/BudgetSummary/EconomicOutlook.pdf.
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As always, the latest new claims data are at https://www.dol.gov/ui/data.pdf.
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