In October, California average natural gas rates (12-month moving average) continued to rise relative to the averages 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 November trade data in general shows activities easing from the prior month as shippers shifted from holiday stocking, but remained well above trade levels a year ago in November 2023 as a focus remains on building inventories in anticipation of tariff increases in 2025. Total trade through the state’s ports remains on track to set new records this year in both nominal and real terms.
The November numbers once again showed mixed results. Combined with an upward revision to the October numbers, nonfarm jobs showed moderate growth with a gain of 20,200 over the two months. Employment in contrast showed a total loss of 24,200 in this period, and a combined loss of 101,100 since the near-term high in May 2023.
California’s surging electricity prices flipped the state’s relative position in September. Based on a 12-month moving average, California’s average monthly residential electricity bill was the 9th lowest among the contiguous states and DC in 2010 prior to the start of the state’s current climate change and energy policies. In September, California became the 8th highest.
In October, total trade through California’s ports reached its highest monthly level since at least 2003 in both nominal and real values as trade flows were diverted due to port disruptions in Canada and in the East and Gulf coast ports and as cargo owners sought to remain ahead of potential tariff increases in 2025. In nominal terms, total trade was up 33.1% compared to pre-pandemic October 2019, and up 17.6% compared to October 2023. Origin exports rose 5.4% compared to a year ago, while destination imports into the state were up 23.7%.
The state’s recent implementation of the $20 an hour minimum wage for fast food chains has produced the standard wave of claims over its effect on jobs, with proponents generally claiming that there has been no effect and even in some cases that the effect has produced an increase in jobs.
These claims to date, however, have been based on estimates using various data sources including the monthly job numbers published by Employment Development Department from the Current Employment Statistics (CES). The core caveat to date is that these are all estimates. The CES numbers reported for the industry containing the affected fast food establishments—Limited Service Restaurants—as with all the CES industries are based on monthly surveys and modeling results.
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