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Economic Slowdown and Budget Concerns: The Department of Finance forecasts slow employment growth throughout 2024, projecting levels well below those seen before the pandemic. Despite efforts to sustain current expenditure levels, the state is facing challenges due to this slower economic growth.
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JOLTS Data Tracking Economic Slowdown: California job openings show a slowing in employer hiring plans, consistent with the slower growth seen in the Department of Finance projections. The results for the rest of the US, in contrast, indicate continuing labor shortage conditions.
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Tourism Spending and Job Recovery: While tourism spending in 2023 surpassed pre-pandemic levels in nominal dollars, when adjusted for inflation, spending remains lower. This key industry has grown, but California costs of living and costs of doing business have grown faster. Employment in this industry at 98% of the 2019 levels is just short of recovery, with Accommodation showing some of the largest gaps.
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California's Unemployment Insurance Claims: The state continues to grapple with high levels of unemployment, reflected in its significant share of national unemployment insurance claims. Even though the Department of Finance projections indicate unemployment will remain over 1 million through at least the second quarter of 2026, California—unlike every other state except New York—failed to use the federal pandemic assistance funds to bring the state unemployment insurance fund out of its current conditions as structurally insolvent.
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