Back in mid-December, Political Calculations asked if California was in recession. Data released by the Philadelphia Fed suggests the answer is no.
Figure 1: Coincident index for California (blue), and implied index value for June 2018 using leading index (light blue arrow, blue dot) against log scale. NBER defined national recession dates shaded gray. Red arrow at date of Political Calculations post. Source: Philadelphia Fed [1], [2], and author’s calculations.
The release of labor market indicators suggests not, contra some recent commentary.
Figure 1: California civilian employment over age 16 from household survey (black), nonfarm payroll employment (dark blue), private nonfarm payroll employment (pink) from establishment survey, all in thousands, seasonally adjusted, on log scale. NBER defined recession dates shaded gray. Source: BLS and NBER.
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I doubt it, but it’s more likely than an ongoing recession in California. Wisconsin year-on-year GDP growth lags, personal income and wages/salaries growth are both bouncing around zero.
That’s what Ironman asks at Political Calculations, and he answers his question thusly:
Going by these [household survey based labor market] measures, it would appear that recession has arrived in California, which is partially borne out by state level GDP data from the U.S. Bureau of Economic Analysis.
Some analysts continue to infer short term trends solely based on household labor market series compiled at the state level. Here are two pictures showing why focusing on the household over establishment could be misguided.
Here are various vintages of the November release for California household/civilian employment series.
Figure 1: Civilian employment from household survey in California, from November 2013 release (blue), November 2014 release (red), November 2015 release (green), November 2016 (black), and November 2017 (teal), all seasonally adjusted. Source: BLS via ALFRED and FRED.
On reading my recent post on Kansas economic performance in the reign of Brownback, which included this graph:
Figure 1: Private nonfarm payroll employment in Kansas (red), in US (blue), in logs normalized to 2011M01=0. Dashed line at 2011M01, Brownback term begins. Source: BLS, author’s calculations.
A&M Professor/Extension Economist Levi Russell writes “Your analysis is highly flawed”.
The unfunded liabilities of the San Diego County Employees Retirement Association have increased every year for the last five years, reaching $2.45 billion last year, more than quintuple the level in 2008. The calculation of how big the shortfall is assumes that the fund is going to be able to earn a 7.75% return on its investment after subtracting administrative costs. If it earns less than 7.75%, the shortfall will be even bigger. A 10-year Treasury bond currently pays 2.4%, and a typical stock has a dividend yield under 2%. So what do you do if you’re in charge of the system’s $10 billion in assets?
Though the record gasoline prices paid by Californians last week received national attention, it was from the beginning strictly a California problem.
Californians who bought gasoline on Friday experienced an unpleasant shock.
Some quick remarks on the unevenness of the U.S. economic recovery.