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Jobs Post Above Average Growth for the Year: Nonfarm jobs rose 23,400 in December, bringing the preliminary job gains for all of 2023 to 311,600 (seasonally adjusted) and coming in 26% better than the average monthly jobs gain of 20,500 in pre-pandemic 2019. The total placed California in 2nd place, behind Texas with a gain of 369,600.
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But for the State Budget, It’s Not the Number of Jobs that Count—It’s the Type: The health of the state budget—magnified by the current spending trajectory—has become overly dependent on job outcomes in the Bay Area and more specifically from that region’s Tech Industry. California High Tech employment showed little change over the year, dropping 25,500 and with most of the loss in the manufacturing components.
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California Moved into 1st Place for the Highest Unemployment Rate Among the States and DC: Employment dropped for the 6th month in a row, down 32,800 in December. The total number of unemployed also increased by 29,200, with the combined result increasing the state unemployment rate to 5.1%.
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According to the LAO, the State’s UI Trust Fund is Now "Structurally Insolvent": As a result of the state’s failure to use the federal funds provided specifically to deal with the problem, California’s federal debt now stands at $20.1 billion. Total debt is expected to grow to $20.8 billion by the end of 2024, and $21.0 billion by the end of 2025. This deficit—stemming from the expansion of benefits without changes in funding—has led LAO to conclude that the fund is now “structurally insolvent.”
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