e-EDGE is now available as an RSS feed. [Click here to subscribe to it.]Figures released last week by the California Employment Development Department (EDD) showed California’s unemployment rate increased in January. The seasonally adjusted unemployment rate for January was 12.5 percent and the December revised rate was 12.3 percent. On a year-to-year basis, the unemployment rate has increased by +2.8 percentage points.
The U.S. unemployment rate actually fell from 10.0 percent in December to 9.7 percent in January. Thus, joblessness in California continued to be higher than the nation, the trend since September 2008. Four other states have higher unemployment rates than California: Michigan (14.3%), Nevada (13.0%), Rhode Island (12.7%) and South Carolina (12.7%). However, only California saw its unemployment rate rise in January.
Within the five-county Southern California area, all of the counties experienced increases in non-seasonally adjusted unemployment rates during January. In addition, all of the counties had double-digit unemployment rates in January. The San Bernardino County unemployment rate increased from 11.5 percent a year earlier to 14.8 percent. Riverside County’s unemployment rate also rose on a year-to-year basis, moving from 12.2 percent to 15.1 percent in January. Los Angeles County’s January rate moved upward from 10.6 percent a year ago to 13.2 percent. Ventura County’s January rate increased from 8.7 percent a year earlier to 11.6 percent.
In Orange County, the unadjusted unemployment rate moved upward from 7.5 percent in January 2009 to 10.1 percent in January 2010. San Diego County’s rate rose from 8.4 percent to 11.0 percent over the past year. (Ferdinando Guerra)
PR: http://www.edd.ca.gov/About_EDD/pdf/urate201003.pdf
We finally have the January employment numbers for California and the local metro areas. We also have the revised employment data for 2008 and 2009, and there are some interesting new stories.
For California in January, seasonally adjusted nonfarm employment declined by -701,700 jobs over the year or by -4.8%. Looking at the unadjusted detail, the largest losses came in construction (-118,400 jobs), manufacturing (-114,900 jobs), and retailing (-76,200 jobs). The revised data indicate that government is now taking a beating, with January seeing a loss over the year of -37,900 jobs. As usual, employment gains were recorded by (private) education (+9,000 jobs) and health services (+5,000 jobs).
Nonfarm employment (not seasonally adjusted) in Los Angeles County in January declined by -4.5% or by -176,500 jobs over the year. By industry, the largest losses came in manufacturing (-35,400 jobs), construction (-25,600 jobs), and professional, scientific & technical services (-18,100 jobs). However, retailing was right behind at -18,000 jobs. Increases came in health services (+5,200 jobs), (private) education (+5,000 jobs), and information (+2,300 jobs). The latter includes motion picture & sound recording which, while down from December, was up over the year by 6,400 jobs (more location production activity seems to be going on).
Orange County’s January nonfarm employment fell by -5.1% or by -72,100 jobs over the year. The largest losses came in manufacturing (-15,600 jobs), construction (-15,000 jobs), and retailing (-8,700 jobs). Increases came in leisure & hospitality (+1,900 jobs) and (private) education (+100 jobs).
The Riverside-San Bernardino area saw nonfarm employment fall by -6.3% or by -73,600 jobs over the year to January. The largest losses came in construction (-15,500 jobs), manufacturing (-10,800 jobs), and retailing (-9,700 jobs). The only increase over the year came in health services, which was up by 800 jobs.
San Diego County saw nonfarm employment decline by -4.0% or by -50,300 jobs over the year to January. The largest losses were in manufacturing (-9,500 jobs), construction (-8,500 jobs), and retailing (-6,300 jobs). Increases came in health services (+2,000 jobs), and (private) education (+300 jobs).
Nonfarm employment in Ventura County in January dropped by -4.8% or by -13,500 jobs over the year. The largest losses came in manufacturing (-3,400 jobs), construction (-2,400 jobs), and retailing (-2,000 jobs). Education & health services was the only sector adding jobs, with an increase of 200 jobs.
What did the revisions to the employment data show? We now know there were fewer jobs in 2009 than initially reported. The downward revisions to the 2009 annual data are as follows:
What did the job losses from recent peaks (usually 2007) to 2009 look like?
Not a pretty picture. It will be 2011 before the state and most local areas move back into a year-to-year employment growth mode. (Jack Kyser)
PR: http://www.labormarketinfo.edd.ca.gov/?pageid=1003
February turned out to be a pretty good month in some parts of the retail world though not all. Total U.S. retail and food service sales increased by +0.3% last month. Sales had previously edged up by +0.1% in January after slipping by -0.2% in December. Eleven sectors (out of 14) registered higher sales in February. The biggest increases over the month were reported by: electronics & appliance stores (rising by +3.7%); miscellaneous store retailers (+2.5%); followed by food & beverage stores (+1.3%); sporting goods, hobby, book & music stores (+1.2%); department stores (+1.1%); and other general merchandise stores (excluding department stores, +1.0%). [All figures in this paragraph are seasonally adjusted.]
Nonstore retailers reported no change in sales over the month. The two categories reporting lower sales in February were: motor vehicle & parts dealers (-2.0% over the month); and health & personal care stores (-0.7%).
Comparing January-February 2010 sales with the same months last year gives a somewhat more sober perspective. [All figures in this paragraph are not seasonally adjusted.] Total retail and food service sales were up by +3.4% compared with the first two months of 2009. The details by store type were more mixed than February’s month-over figures, as eight store types reported higher sales so far this year while six store types reported lower sales. Sectors that gained over the year were led by: gasoline stations (up by +26.4%, due to lower prices early in 2009); nonstore retailers (+11.7%); and other general merchandise stores (excluding department stores, +4.8%). Store types reporting lower sales included three tied to housing construction and home furnishings: building material & garden equipment & supplies dealers (-6.9% over the year so far); electronics & appliance stores (-3.3%); and furniture & home furnishings stores (also -3.3%).
This report was very encouraging, as February's results occurred despite a spate of bad weather back east. Smoothing out the recent month-to-month variations, total retail & food service sales were up by +1.7% in the December-February period compared with the previous three months (September-November). Eleven sectors registered sales gains in this comparison, while three reported lower sales. The laggards were each down by less than -1.0% over the three-month period, suggesting they too could turn up in the near future. Let's hope so! (Nancy D. Sidhu)
PR: http://www.census.gov/retail/marts/www/marts_current.pdf
Two-thirds of the way through the 2009/2010 fiscal year, California’s reported budget position continued to deteriorate in February. While greater than expected in January and February, total revenues still fell short of disbursements by -$10.4 billion. The State’s cash balance now stands at -$22.3 billion. The latest financial results released by the State Controller for the General Fund show that during the first eight months of FY 2009-2010, total receipts decreased by -2.9% to $54.0 billion (down by -$1.6 billion compared with the same period last year). Total disbursements also fell – dropping by -$8.9 billion to $64.4 billion (or by -12.1% on a year-over-year basis).
Looking at the “big three” revenue sources, corporate tax receipts declined by -1.7% to $4.3 billion (compared with February 2009 fiscal year-to-date) while revenues from retail sales and use taxes increased by +10.1% to $17.6 billion. Persistent statewide high unemployment (increasing again in January to 12.5%) continued to curb personal income tax receipts (the single largest contributor to state revenues). In February, personal income taxes fell by -11.8% to $27.0 billion compared to the same period last year. Overall, collections for the “big three” revenue sources were down by -4.1% during the first eight months of the fiscal year.
On the expenditure side, Local K-12 Education received $21.9 billion during July 2009 – February 2010, a decrease of -$3.2 billion (-12.6%) from the same period last year. Community Colleges received $2.9 billion, an increase of +$47.2 million (+1.6%) over the prior year. Contributions to CALSTRS (the teachers’ pension fund) were up for the year – rising by +13.3% to $793.3 million (note: no contributions were recorded for the month of February). Spending for the Department of Corrections fell again in February to $5.7 billion (-11.1%) compared with $6.4 billion last year. Spending on Health and Human Services contracted sharply, declining by -19.0% to $1.2 billion. Payments to Resources dropped by -21.3% to $857.2 million compared with last year, and spending on General Government dipped by -5.0% to $1.1 billion. Meanwhile, debt service payments increased by +15.5% to $3.2 billion.
As of the end of February, the State had $28.2 billion in borrowable resources against $22.3 billion in outstanding loans, which left just $5.9 billion in unused borrowable resources. The outstanding loan balance of $22.3 billion is comprised of $13.5 billion of internal borrowing and $8.8 billion of external borrowing (short-term revenue anticipation notes). Of the total, $11.9 billion was carried forward from the previous fiscal year, with the remaining $10.4 billion debt accumulated in the current fiscal year. (Kimberly Ritter)
PR: http://www.sco.ca.gov/eo_pressrel.html
California maintained its position as the second largest state exporter in January, with total exports valued at $10.3 billion. California’s exports declined by -11.2% from December to January. However, exports in January were up by +18.5% over the year, the third consecutive year-to-year increase and the largest so far.
The top California export markets in January were Mexico, China, Canada, Japan, and South Korea. Exports to Mexico, California’s largest market, increased by +8.9% over the year. California’s second largest market, China, actually witnessed the highest annual increase, a stunning +59.5% rise over the year to January. The state’s fifth largest market, South Korea, experienced the second largest year-to-year increase, with a +15.8% rise in January. Exports to Canada and Japan strengthened by +12.9% and +2.8%, respectively. From an industry standpoint, the top three product exports (ranked by dollar value) remained computer & electronic products, transportation equipment and machinery.
The newly available state import figures reveal that California held the top position as the largest state importer in January, with total imports valued at $23.0 billion. Texas held the second spot as it imported $19.0 billion in January. New Jersey, New York and Illinois rounded out the top five. California accounted for nearly 17% of total U.S. imports in January, while Texas made up 14% followed by NJ (6%), NY (6%) and Illinois (5.5%). The top five states combined comprised nearly 50% of total U.S. imports in the month of January. (Ferdinando Guerra)
The U.S. Commerce Department reported that the U.S. trade deficit narrowed to $37.3 billion in the month of January, from a revised $39.9 billion in December. The deficit declined by -6.6% over the month after increasing for three straight months. The most significant developments in January were that U.S. imports of oil and autos fell sharply. Refineries imported the smallest amount of crude oil in ten years. Meanwhile, exports fell for the first time since April 2009.
Imports dropped by -1.7% in January to $180.0 billion. The $3.1 billion monthly decline in imports provided a note of caution about the strength of the U.S. recovery, as demand fell for autos and auto parts, capital goods and consumer goods.
U.S. exports fell by -0.3% to $142.6 billion in January due to a reduction in foreign demand for U.S. made capital goods, autos & auto parts, and food & beverages. This was the first drop in monthly exports in nine months. Most major categories of exports experienced declines with the exception of industrial supplies & materials and consumer goods. The slight weakening in exports likely does not presage an end to export growth as the Asian economies continue to recover strongly (although Europe poses some concern).
The U.S bilateral trade deficit with China widened by +1.1% in January to $18.3 billion from $18.1 billion in December and continued to be the largest trade deficit with any country. However, the monthly trade deficit with China has fallen significantly from its record level of $28 billion in October 2008. Imports from China were $25.2 billion in January, while exports were $6.9 billion. U.S. trade deficits with Mexico, Japan and the European Union all declined in January, while the deficit with Canada widened. (Ferdinando Guerra)
PR: http://www.bea.gov/newsreleases/international/trade/2010/pdf/trad0110.pdf
China: China’s exports surged by +45.7% in February from a year earlier, the third consecutive month of annual gains. Most observers had expected a significant increase in Chinese exports as exports experienced their largest decline of the financial crisis in February 2009. China’s imports also expanded by a very large percentage, rising by +44.7% compared to year earlier. Both figures suggest that the Chinese economy continues to perform very strongly.
However, rising inflation continues to be a major concern. Consumer inflation climbed to a sixteen month high in February, as prices rose by +2.7% compared to a year earlier. This marked the third consecutive month of increases after nine months of deflation. (Ferdinando Guerra)
Tuesday, March 23, 2010: Town Hall Los Angeles: Have Any Questions About the Economy? - Janet L. Yellen, PhD, President and Chief Executive Officer, Federal Reserve Bank of San Francisco
12:00 PM Luncheon Address with Q&A. Millennium Biltmore Hotel (506 South Grand Avenue), Los Angeles. Parking: $20 Valet and $9.35 Self-Parking at Pershing Square; both require validation.
Yellen took office on June 14, 2004, as president and chief executive officer of the Twelfth District Federal Reserve Bank, at San Francisco. Yellen is a member of both the Council on Foreign Relations and the American Academy of Arts and Sciences and a research associate of the National Bureau of Economic Research. She also serves on the board of directors of the Pacific Council on International Policy, and in the recent past, she served as president of the Western Economic Association, vice president of the American Economic Association and was a Fellow of the Yale Corporation.
April 19-20, 2010: USC Marshall School of Business: Asia/Pacific Business Outlook 2010
USC - Davidson Conference Center (on Campus), 3415 S. Figueroa St., Los Angeles, CA
As the world economies slowly rebound from the financial crisis in 2010, Asian economic growth leads the globe. Learn how your firm can benefit from Asia’s surge. Now in its 23rd year, APBO is North America’s premier event for business leaders who want to expand their trade and investment in Asia/Pacific. APBO features 60 concurrent sessions on 15 Asia/Pacific economies. Build your international business network through APBO’s unprecedented access to 60 business experts with on-the-ground knowledge and experience.
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