California’s economy now 6th in world

California’s economy now 6th in world

June 14, 2016

California’s economy is now the sixth largest in the world, according to a new federal report.

The state’s economy, led by the finance and insurance industries, grew at the second fastest rate in the nation last year. Only Oregon’s economy grew faster.

The federal Bureau of Economic Analysis says California’s economy expanded by 5.7 percent in 2015 with an economic output of $2.46 trillion.

California’s economy is sixth in the world after the United States, China, Japan, Germany and the United Kingdom.

http://cvbj.biz/2016/06/14/californi...now-6th-world/

Eight State Economies
Shrank in 4th Quarter

More than half of states saw GDP growth decline at end of 2015

http://s3.freebeacon.com/up/2016/06/...-in-Alaska.jpg

A helicopter lands near a test drilling site for the

BY: Ali Meyer
June 14, 2016 2:00 pm

Eight states had negative GDP growth in the fourth quarter of 2015, and Alaska had negative growth for two consecutive quarters putting it in a recession, according to data released Tuesday by the Bureau of Economic Analysis.

Real gross domestic product is the bureau’s most comprehensive measure of U.S. economic activity and is an inflation-adjusted measure of each state’s prices for the goods and services produced for all industries within that state.

There were only three states—including Alaska, North Dakota, and West Virginia—that had negative GDP growth in the third quarter of 2015, which includes data from July, August, and September.

By the fourth quarter of 2015, which includes data from October, November and December, that number grew to eight states: Alaska, Iowa, Kansas, Nebraska, New Mexico, Oklahoma, Montana, and Wyoming.

Four of these states, Alaska, Wyoming, Oklahoma, and New Mexico, had significant declines in their mining sector, which includes oil and gas production. The other four, Kansas, Iowa, Montana, and Nebraska, had significant declines in agricultural output.

“It looks like some of the negative Q4 growth can be explained by the relatively volatile energy and farm sectors,” explained Mark Perry, a scholar at the American Enterprise Institute. “The low prices for oil and natural gas last year could have impacted both energy production (which has been declining for oil) and the market price of the energy production as it is calculated for state GDP.”

“The farming sector is very cyclical and has been declining in states like Iowa,” he added. “In fact, farm income nationally is expected to fall. The USDA released a new forecast this week predicting that U.S. farm income will fall to about $55 billion this year, which would be the lowest level since 2002.”

In both quarters, Alaska had negative GDP growth, putting its economy into a recession.

More than half of states in the United States saw their GDP growth decline from the third quarter of 2015 to the fourth quarter.

The states that saw the largest declines from the previous quarter were Oklahoma, Wyoming, New Mexico, and Montana.

“Today’s weak GDP numbers out of the states are yet another sign of a persistently sluggish economy that is leaving many Americans behind,” said Alfredo Ortiz, president and CEO of the Job Creators Network.

http://freebeacon.com/issues/eight-s...k-4th-quarter/

Texas economy still struggling

Report from Dallas Fed finds Houston economy still hurting

Houston, TX

By ALEX WUKMAN (Patch Staff) -
June 9, 2016 7:00 am ET

A recent report from the Federal Reserve Bank of Dallas found that Texas service sector activity continued to reflect expansion in May.

The report surveyed business executives throughout the state and found that the revenue index, a measure of service sector conditions, dropped from 10.6 in April to 5.8 in May.

Labor market indicators were mixed in May. Although the employment index remained positive, it edged down from 6.3 to 4.5, indicating slower employment growth. The hours worked index fell almost 4 points into negative territory to a reading of -1.3, suggesting shorter workweeks.

Part of the reason for shorter weeks comes from employer anxiety about recent U.S. Department of Labor changes to the federal Fair Labor Standards Act's (FLSA) overtime exemptions. On May 18, the Department of Labor updated regulations to more than double the salary threshold for claiming exemption from overtime, from $23,366 annually to $47,476.

Multiple executives across various fields told the banks that the new overtime regulations will "have a siginificant negative impact" on business.

A professional, scientific and technical services executive described the new regulations as "not a positive at all."

Perceptions of broader economic conditions worsened in May. The general business activity index was negative for a fifth consecutive month, declining from -3.7 in April to -7.1 in May. The company outlook index retreated 10 points into negative territory to a reading of -2.9, with 13 percent of respondents reporting that their outlook improved from last month and 16 percent noting that it worsened.

A pessimistic outlook was particularly present in Houston industuries related to housing and the provision of home services. COntinual declines in oil prices, West Texas Intermediate closed at $50.36 on Wednesday, has plunged Houston's economy into a regional recession.

The Houston metro area has a 4.8 percent unemployment rate, according to the Texas Workforce Commission. Halliburton and Schlumberger, two large scale employers, have shed 33,000 and 40,000 jobs respectively.

The loss of jobs has led to a decline in real estate sales, with Miami-based Lennar Corp., the biggest builder in Houston, reporting a 3.5 percent decline in new home orders for the first quarter of 2016.

One rental company reported to the Dallas Fed that their returns dropped from a year-to-year net gain of 7.5 percent for the first quarter to a net loss of 2 percent year to date in April.
"That is what is going on out here in the real world, dang little! We are a 56-year-old family-owned company," the rental executive said. "This economy is in and headed deeper into the tank faster than all the talking heads can spin their silly data and metrics to portray the story most beneficial to whatever lines their pockets best today."

For telecommunication providers, which rely on customer density to offset the cost of infrastructure installation, the housing decline has become a threat to their business model.

"Home, apartment and business vacancies are rising, while the cost to provide services continues to increase," one telecommunications executive told the Dallas bank. "The FCC [Federal Communciations Commission] continues to ignore the rising cost to provide customers programming/video."

Price and wage pressures eased this month. The selling prices index fell slightly from 6.5 to 4.4. The wages and benefits index dipped from 16.9 to 14.7, although the majority of firms continued to note no change in compensation costs.

Respondents’ expectations regarding future business conditions reflected less optimism in May. The index of future general business activity inched down from 2.3 to 1.3. The index of future company outlook fell from 14.6 to 6.3. Indexes of future service sector activity, such as future revenue and employment, also reflected less optimism this month.

http://patch.com/texas/houston/texas...ill-struggling

California Senate approves another minimum wage hike


6/1/15

California Overtakes France to Become Sixth-Largest Economy

Alison Vekshin alisonvekshin
June 14, 2016 — 3:43 PM PDT

https://assets.bwbx.io/images/users/.../v0/488x-1.jpg
Buildings stand in the skyline of downtown in this aerial photograph taken above San Francisco on Oct. 5, 2015.

Photographer: David Paul Morris/Bloomberg

• Golden State buoyed by technology, agriculture, manufacturing
• Healthy economy and exchange-rate movement fueled growth

California has overtaken France as the world’s sixth-largest economy, fueled by strong growth and the U.S. dollar’s gains against foreign currencies, state data released Tuesday show.

The most-populous U.S. state, with a gross domestic product of $2.5 trillion, has also eclipsed recession-plagued Brazil.

“This is the result of both good growth in California and exchange-rate movements of the U.S. dollar versus other currencies,” said Irena Asmundson, chief economist in the California Department of Finance.

Governor Jerry Brown, 78, is running the state during an economic turnaround driven by technology companies including Facebook Inc. and Apple Inc., along with agricultural and manufacturing industries that lead the U.S. Since taking office in 2011, Brown steered the state away from fiscal turmoil and persistent deficits to budget surpluses.

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California grew by 4.1 percent in 2015, compared with a 2.4 percent increase for the U.S. and 1.1 percent for France, Asmundson said.

Last year, California created the most jobs of any state, more than the second- and third-most-populous states Florida and Texas combined. Four of the world’s 10 largest companies are based in California, including Alphabet Inc. and Facebook.

http://www.bloomberg.com/politics/ar...argest-economy

Fine...they are a "sanctuary" State and ALL Federal Funding should be cut off immediately. That goes for the ENTIRE State that has any sanctuary cities...aiding and abetting illegal Criminal Trespassers! Your State is NOT above the Law. Cut off the $$$$.

No papers...no entry...no rights!

"Operation Return to Sender"

California Legislature approves $171 billion state budget

http://www.trbimg.com/img-5761f116/t...to/550/550x309Senate leader Kevin de León (D-Los Angeles), left, congratulates Sen. Mark Leno (D-San Francisco), chairman of the Senate budget committee after lawmakers approved the 2016-2017 state budget. (Rich Pedroncelli / Associated Press)

Chris Megerian

With concerns about the potential for another recession casting a shadow over this year’s budget negotiations, California lawmakers approved a new $170.9-billion spending plan on Wednesday that increases some funding for social services but stashes more away in a rainy-day fund.

Although lawmakers are finishing their work on this year’s budget, some of the most consequential decisions for the state’s financial future may not be made until the November election. Voters will likely be asked whether to extend higher taxes on the wealthy, increase the levy on cigarettes or borrow billions of dollars to build and renovate schools.

It’s a classic example of California’s dual-track system for managing its finances, with some decisions made in the Capitol and others at the ballot box.

“It’s ultimately up to the people of California to make their own decision,” said Senate leader Kevin de León (D-Los Angeles).
http://www.trbimg.com/img-574e4688/t...01/300/300x169Updates on California politics: Legislature passes $170.9 billion state budget at swift pace

The budget passed swiftly Wednesday on a nearly party-line vote. State Sen.Anthony Cannella of Ceres in Stanislaus County was the only Republican to vote in favor of the plan.

This year’s budget negotiations followed a similar pattern as the last few annual debates over spending in the Capitol, with Gov. Jerry Brown trying to tamp down calls for more spending while Democratic lawmakers sought new funding for government services.

But Brown issued increasingly stark warnings about the possibility of another economic downturn, and he slashed his projections when releasing his budget proposal last month.

Although California has enjoyed years of financial progress as the economy improved, “the surging tide of revenue is beginning to turn,” Brown said in May.

The governor successfully convinced lawmakers to stash an extra $2 billion into the rainy-day fund, bringing the total to an estimated $6.7 billion by next summer.

The budget includes another $1.75-billion cushion in case revenue runs lower or spending is higher than expected.

Brown, lawmakers strike budget deal that includes more money for housing, child care »

The reserves help ensure “that no matter what happens, we’ll be in a good place,” said Assembly Speaker Anthony Rendon (D-Lakewood).

In turn, Brown agreed to increase spending on child care and allow families to receive additional welfare benefits.

“We pushed hard to make sure we make investments in the most vulnerable communities in California,” de León said before the Legislature voted on the bills on Wednesday.

Brown tweeted his approval Wednesday evening: “Good work from the state legislature: we're building reserves and investing in CA.”

The budget ramps up payments to state-subsidized child care providers to help them keep pace with California’s higher minimum wage, which is slated to hit $15 by 2022.

The spending plan also ends a policy known as the “maximum family grant,” which prevented families from receiving extra welfare assistance if they had a new child while already receiving benefits.

"It has only driven women and their children into deeper poverty," said Sen. Holly Mitchell (D-Los Angeles), who fought to end the policy.

Removing the restriction would help an estimated 130,000 children in 95,000 families with an extra $136 per child, per month.

Republicans were critical of new spending on government programs, echoing Brown’s concerns about the possibility of another recession.

"It doesn’t take more than basic arithmetic to show that level of increase is unsustainable,” said Assemblyman Jay Obernolte (R-Big Bear Lake), the vice chairman of the Assembly budget committee.

While lawmakers were working on this year’s budget, advocates have been circulating petitions to place tax-hike measures on the ballot in November.

One measure, supported by the California Teachers Assn., would extend higher taxes on the wealthy, producing an estimated $5 billion to $11 billion per year. The money would go to public schools, community colleges and government health programs.

The taxes were originally raised by a ballot initiative Brown championed in 2012, which was supposed to be temporary.

Another measure would increase the tax on cigarettes by $2 per pack, raising an estimated $1.1 billion to $1.6 billion in revenue annually. It’s supported by labor unions and Tom Steyer, a deep-pocketed Democratic donor and environmentalist, and it’s intended to boost funding for health care and anti-smoking efforts.

A third budget-related measure already has qualified for the ballot: a proposal to authorize $9 billion in bonds to build and renovate schools and community colleges. The state would incur an estimated $8.6 billion in interest costs over 35 years, and annual payments were estimated at $500 million.

http://www.latimes.com/politics/la-p...nap-story.html

• Businesses from these three countries employ thousands across Southern California
  
  
  
• The interesting thing that happened when Kansas cut taxes and California hiked them

JUNE 17, 2016 9:26 AM

Unemployment falls to 9-year lows in California, Sacramento

State recovery continues amid fears of U.S. slowdown

Sacramento job growth lags statewide average

Housing market less of a factor this time

http://www.sacbee.com/news/business/...ent%20Benefits

A woman passes a “we’re hiring” sign while entering a Boston clothing store in May.

Recent unemployment figures suggested California’s economic recovery is continuing to move forward despite signs of a slowdown on the national level.

Charles Krupa The Associated Press

BY DALE KASLER
dkasler@sacbee.com

The last time California’s unemployment rates were this low, George W. Bush was president and the recession hadn’t begun.

Unemployment last month dropped to its lowest point in nine years, both statewide and in greater Sacramento, state officials said Friday. The figures suggested California’s recovery is continuing to move forward despite signs of a slowdown on the national level.

California’s jobless rate dropped a tenth of a percentage point in May, to 5.2 percent, the Employment Development Department reported. In the four-county Sacramento region, the rate fell four-tenths of a point, to 4.7 percent.

Both rates are the lowest since May 2007, seven months before the recession officially started.

The news wasn’t all rosy, however. Employers added just 15,200 payroll jobs across the state last month, considerably fewer than the 70,000 jobs created in April.

The statistics are reflective of a story that’s been familiar to Californians for several years: The state is in the midst of a steady but unspectacular economic recovery that hasn’t fully made up the losses suffered during the recession.

“It’s an expansion, it’s not a boom,” said economist Jeff Michael of the University of the Pacific. “There’s still a ways to go in terms of incomes and getting back to where things were.”

That’s particularly true in Sacramento, he said, where wage increases and growth in high-paying jobs have only recently begun to take hold. Sacramento was the last major metro area in California to recover all of the jobs lost in the recession.

Yet the economy’s less-than-stellar performance, both in Sacramento and across the state, has been a blessing in some respects even though it’s been frustrating to job seekers. Michael said the recovery “feels a little more sustainable” than the rapid run-up of a decade ago, which was fueled primarily by a housing market that crashed spectacularly.

4.7 percent Unemployment rate in Sacramento region in May

How long the recovery will last is unclear.

Some warnings popped up in the latest unemployment numbers, particularly the drop-off in new payroll jobs created. Most analysts say the payroll statistics are more reliable than the unemployment rates, which are calculated from a smaller survey.

“California employment gains have begun to decelerate,” said Sung Won Sohn, economist at California State University, Channel Islands.

Jason Sisney, chief deputy at the state Legislative Analyst’s Office, said job growth in California averaged 40,250 a month last year. So far this year, the monthly average has fallen to 26,600.

While the payroll figures tend to jump around from month to month, and are subject to revision, the May numbers dovetail with cautionary signs emerging nationally and internationally. California’s exports have faltered in the past few months because of economic slowdowns in Asia and other key markets. State tax revenue has fallen short of expectations lately, although the shortfall could be more a result of stock market instability than fundamental weaknesses in the California economy.

“Things don’t last forever,” Gov. Jerry Brown told lawmakers last month, urging caution in crafting the new state budget.

Michael said the drop-off in state tax revenue could be especially worrisome in Sacramento.

“We’re still a government town, and the state’s got a volatile revenue structure,” said Michael, director of UOP’s Center for Business and Policy Research. One out of every four Sacramentans works in the public sector.

Nonetheless, Michael said he doesn’t forecast a downturn in the Sacramento area anytime soon. One positive sign: Although much of May’s job growth was concentrated in the construction industry, the region by and large has enjoyed a long stretch of economic growth despite a relatively paltry contribution from real estate and related industries.

“You can see room for further expansion,” Michael said.

May 2007 Last time state and local jobless rates were this low

He said he’s encouraged by reports that Sacramento or Tracy could land a major electric vehicle assembly plant. Even if the project doesn’t materialize, the mere possibility shows the economy is still strengthening.

“You are seeing more reports like that,” he said. “There’s activity out there, there are more prospects.”

In the past year, the region has added 18,100 jobs, a gain of 2 percent. That’s ahead of the U.S. average but substantially behind the state’s job growth rate of 2.8 percent. Since May 2015, the state has added 440,300 jobs.

Strong job growth has been recorded in practically all corners of the state: Fresno County and the Stockton area have each added 9,600 jobs in the past year, San Diego County has added 33,800 jobs, and Orange County has added 53,500, according to figures compiled by Palo Alto economic consultant Stephen Levy.

For all of that, the key region to watch is the Bay Area, whose high-tech sector has accounted for an outsized share of California’s job gains since the recovery began. Economic troubles in China and Europe have prompted some experts to say the latest tech boom could falter in the foreseeable future.

For now, the job creation machine appears to be in good shape: Unemployment fell to 3.4 percent in Silicon Valley and a microscopic 2.8 percent in San Francisco last month.
“We’re not seeing a bursting of any bubble, yet,” Sisney said.

http://www.sacbee.com/news/business/...e84378342.html

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