California's unemployment rate close to 5%, second highest in US (Columbia: casinos, wage)

[18Montclair]

When Trump left office, the unemployment rate was 6.3% so thank you Joe and Gavin for rescuing us.

https://www.factcheck.org/2021/10/trumps-final-numbers/

[18Montclair]

Originally Posted by TheseGoTo11

LA has the highest unemployment rate of any top 30 metro in the country. This is a serious issue with the state also having one of the worst per capita budget deficits in the country. Combined with lower capital gains receipts, total personal income tax receipts have been falling.


https://www.bls.gov/web/metro/laummtrk.htm
https://calmatters.org/economy/2023/...-deficit-2023/

Las Vegas has a higher jobless rate than LA

https://www.bls.gov/web/metro/laulrgma.htm

[JGC97]

Originally Posted by 18Montclair

When Trump left office, the unemployment rate was 6.3% so thank you Joe and Gavin for rescuing us.

I'm no fan of the man but he didn't cause the high unemployment rate around then. That was the pandemic that did that. Even the U.S. Bureau of Labor Statistics stated as much. https://www.bls.gov/opub/mlr/2021/ar...9-pandemic.htm

[BGS91762]

And yet businesses can’t get enough people to stay open regular hours. Something’s wrong with this picture.

[blameyourself]

Originally Posted by BGS91762

And yet businesses can’t get enough people to stay open regular hours. Something’s wrong with this picture.

Nothing wrong with the picture at all. The state is at full employment (as was stated early on in this thread).

[18Montclair]

Originally Posted by blameyourself

Nothing wrong with the picture at all. The state is at full employment (as was stated early on in this thread).

Exactly, the solution is increased immigration

[stone26]

Full employment means anything below the NAIRU. If unemployment drops below that, that means jobs go unfilled, employers have to raise wages to fill jobs, which means inflation will also rise, etc., which is something economists want to avoid. The current NAIRU (now called NROU) is about 4.41.

https://fred.stlouisfed.org/series/NROU

[EDS_]

Originally Posted by blameyourself

That's Awesome! Thanks for posting such great news.

https://www.investopedia.com/terms/f...5%20or%20above.

What Rate Is Considered Full Employment?

Many economists consider an unemployment rate of 5% or lower to be maximum employment, or as close to full employment as is possible in the real world. This means that the rate of full employment is 95% or above.

What's even more amazing is if CA at near 5% is the second highest in the U.S., that means the country is kicking A!

Let's go Joe!

1. Can you name some of the economists who consider 5% U3 full employment? In my experience when an economist tells someone FE is 3.7% or 5% or whatever they are brushing someone off as incapable of understanding that FE is complex, variable across places and very much depends on optimal utilization.

1.1. I know dozens of economists - professors, working pros, a good friend ran the Dallas Fed's research department for almost 20 years. Not one of them would term CA current 4.9% U3 full employment for the state. Not one.

1.2. CA has below average working age LFPR numbers ergo it can't meet any of the more robust definitions of FE as relatively low LFPR demonstrates inefficiency and very obviously there has been a strong uptick in cyclical unemployment recently. If you'd like to argue CA's recent growth in U3 has instead been structural go ahead but know that is worse not better.


2. Here's the BLS Definition of FE.

BLS defines full employment as an economy in which the unemployment rate equals the nonaccelerating inflation rate of unemployment (NAIRU), no cyclical unemployment exists, and GDP is at its potential. The full-employment assumption links BLS projections to an economy running at full capacity and utilizing all of its resources.


3. Also, of course CA is not a country. However, if it were it would be in SAHM Recession Indicator territory.
U3 growing from 4.1% to 4.9% U3 over the trailing year is in no universe good or cause for celebration and if those numbers were national we'd be at risk of NBER calling a recession.

[Astral_Weeks]

There is a lot of noise in the numbers...we should know more in March 2024 when revisions/updates to the 2023 numbers are provided.

In the meantime, the Legislative Analysts Office says California entered a "downturn" starting in late 2022 and early 2023. Part of that analysis uses the SAHM rule along with other data.

Quoting directly from their report:
"While recessions are not formally defined for state economies, economic data for the fourth quarter of 2022 and first quarter of 2023 appear consistent with California experiencing a mild recession."

https://lao.ca.gov/LAOEconTax/Article/Detail/785

https://www.lao.ca.gov/Publications?productid=5

Yet other very reputable forecasters say California did not enter a recession in 2023 and they do not anticipate we will enter one in 2024, though they do call for slower growth.

From the UCLA Anderson Forecast:
"In California, the forecast narrative is much the same. Throughout 2023, the state’s economy stood at a fork in the road similar to that of the nation, and the possibility of a short-term recession loomed. But the state’s economy keeps chugging along, thanks in part to consumers who want to spend and stimulative fiscal policy. As in the national forecast, the current UCLA Anderson Forecast for California sees no recession in the near term."

https://www.anderson.ucla.edu/news-a...ssion%20loomed.

From Beacon Economics:
"These economic and budget headwinds have occurred despite the economy not falling into a recession. While Beacon Economics does not expect an economic calamity to materialize in California, we expect slower growth in 2024."

https://beaconecon.com/publications/...th%20in%202024.

[EDS_]

Originally Posted by Astral_Weeks

There is a lot of noise in the numbers...we should know more in March 2024 when revisions/updates to the 2023 numbers are provided.

In the meantime, the Legislative Analysts Office says California entered a "downturn" starting in late 2022 and early 2023. Part of that analysis uses the SAHM rule along with other data.

Quoting directly from their report:
"While recessions are not formally defined for state economies, economic data for the fourth quarter of 2022 and first quarter of 2023 appear consistent with California experiencing a mild recession."

https://lao.ca.gov/LAOEconTax/Article/Detail/785

https://www.lao.ca.gov/Publications?productid=5

Yet other very reputable forecasters say California did not enter a recession in 2023 and they do not anticipate we will enter one in 2024, though they do call for slower growth.

From the UCLA Anderson Forecast:
"In California, the forecast narrative is much the same. Throughout 2023, the state’s economy stood at a fork in the road similar to that of the nation, and the possibility of a short-term recession loomed. But the state’s economy keeps chugging along, thanks in part to consumers who want to spend and stimulative fiscal policy. As in the national forecast, the current UCLA Anderson Forecast for California sees no recession in the near term."

https://www.anderson.ucla.edu/news-a...ssion%20loomed.

From Beacon Economics:
"These economic and budget headwinds have occurred despite the economy not falling into a recession. While Beacon Economics does not expect an economic calamity to materialize in California, we expect slower growth in 2024."

https://beaconecon.com/publications/...th%20in%202024.

Excellent post.