March 2025 Release
Reflecting data through February 2025
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U.S. & Calif. Economic Update
- U.S. real GDP grew at a 2.3-percent seasonally adjusted annualized rate (SAAR) in the fourth quarter of 2024, following 3.1-percent growth in the third quarter. Annually, U.S. real GDP increased by 2.8 percent in 2024 following growth of 2.9 percent in 2023 and 2.5 percent in 2022. GDP growth in 2024 was driven by personal consumption (contributing 1.9 percentage points), private investment (0.7 percentage point) and government expenditures (0.6 percentage point), offset by the drag from net exports (-0.5 percentage point).
- California's personal income increased by 3.6 percent (SAAR) in the third quarter of 2024, lower than the 4.2-percent growth in the second quarter of 2024. Gains were driven by increases in wages and salaries and transfer receipts. California’s share of U.S. personal income was 13.7 percent, unchanged from the second quarter of 2024 and largely in line with its historic share.
- U.S. headline inflation ticked down 0.2 percentage point from January to 2.8 percent year-over-year in February 2025. Core inflation—which excludes food and energy—fell to 3.1 percent year-over-year while shelter inflation—which includes owners’ equivalent rent and residential rent—inched down from 4.4 percent in January to 4.2 percent in February.
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U.S. & Calif. Employment
- The U.S. unemployment rate increased by 0.1 percentage point from January to 4.1 percent in February as the decrease in household employment (-588,000 persons) surpassed the decrease in the labor force (-385,000 persons). The nation added 151,000 nonfarm payroll jobs in February with 9 of the 11 sectors gaining jobs: private education and health services (73,000 jobs), trade, transportation, and utilities (21,000 jobs), financial activities (21,000 jobs), construction (19,000 jobs), government (11,000 jobs), manufacturing (10,000 jobs), mining and logging (5,000 jobs), information (5,000 jobs), and other services (4,000 jobs). Two sectors shed jobs: leisure and hospitality (-16,000 jobs) and professional and business services (-2,000 jobs).
- California’s unemployment rate decreased by 0.1 percentage point from December to 5.4 percent in January 2025, as the increase in employment (17,600 persons) was larger than the labor force increase (11,300 persons). California nonfarm payroll employment had no net changes in January. Five sectors added jobs, led by private education and health services (18,500), followed by other services (1,900), manufacturing (1,600), government (1,600), and leisure and hospitality (1,000). The gains were offset by losses in trade, transportation, and utilities (-14,200), information (-3,900), financial activities (-2,800), professional and business services (-2,000), and construction (-1,700). Mining and logging employment was unchanged.
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Building Activities & Real Estate
- In January 2025, California permitted 96,600 housing units (SAAR), 3.3 percent lower than December 2024 and down 2.5 percent from January 2024. Total units permitted in January consisted of nearly 70,000 single-family units and 26,700 multi-family units, up 3.8 percent and down 16 percent from the previous year, respectively.
- The unadjusted statewide median sale price of existing single-family homes decreased to $838,850 in January 2025, down 2.6 percent from $861,020 in December 2024, but up 6.3 percent from $789,480 in January 2024. Sales of existing single-family homes in California were 254,110 (SAAR) in January 2025, down 10 percent from December 2024, and also down 1.9 percent from January 2024.
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Monthly Cash Report
Preliminary General Fund agency cash receipts were $2.3 billion, or 24.9 percent, above the Governor’s Budget forecast in February, and $4.6 billion, or 3.8 percent, above the fiscal year-to-date forecast. The fiscal year-to-date overage was the result of higher receipts from personal income tax (up $3.1 billion due to a $3.2 billion overage in withholding), other revenues (up $1.5 billion), and corporation tax (up $111 million), partially offset by lower-than-expected sales tax receipts (down $263 million). The Governor’s Budget forecast was finalized in late November and did not incorporate the delayed tax deadlines for Los Angeles County taxpayers. Notably, the fourth quarter personal income tax estimated payments deadline of January 15 was delayed to October 15 and fourth quarter sales tax payments for smaller businesses were delayed from January 31 to April 30 for Los Angeles County taxpayers.
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Revenue Charts and Data
- Personal income tax cash receipts were $1 billion, or 22.1 percent, above forecast in February and $3.1 billion, or 4.1 percent, above the fiscal year-to-date forecast. The fiscal year-to-date overage was due entirely to withholding being $3.2 billion above forecast. Refunds were $224 million lower than projected in February and $938 million, or 8.2 percent, below the fiscal year-to-date forecast. Estimated, final, and miscellaneous payments were $68 million below forecast in February, and $959 million below the fiscal year-to-date forecast. Some of the fiscal year-to-date shortfall is attributable to estimated payments shifting from January to October as a result of the delayed deadlines for Los Angeles County.
- Corporation tax cash receipts were $296 million, or 393.5 percent, above forecast in February, and $111 million, or 0.6 percent, above the fiscal year-to-date forecast. February is not a significant month for corporation tax. The overage in February was due to lower refunds of $330 million. Corporate refunds are volatile from month to month, so variance in a single month is generally not indicative of a trend.
- Preliminary sales and use tax receipts were $167 million, or 3.9 percent, below forecast in February and $263 million, or 1.1 percent, below the fiscal year-to-date forecast. February receipts included a portion of the final payment for calendar year 2024 fourth quarter taxable sales, which were due January 31 for taxpayers without a delayed deadline.
- Other revenues were $1 billion above forecast in February and are $1.5 billion, or 218.6 percent, above the fiscal year-to-date forecast, due primarily to higher federal cost recovery collections for disasters in prior years.
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