Sacramento – In the first quarter of 2011, taxable sales in California rose 9.0 percent compared to the previous year, signaling economic growth, said Jerome E. Horton, Chairman of the California State Board of Equalization (BOE).
The growth rate of 9.0 percent was nearly twice as fast as two years ago in 2010 when the average growth was 4.6 percent.
An estimate of this year’s first quarter projects taxable sales of 9.3 percent, a pace similar to that of 2011. The 2012 figures are being compared to a similar period in 2011. The 2012 figures are an estimate subject to revisions, while the 2011 figures have been confirmed by BOE data.
“Taxable sales fuel the engine of economic growth and job creation that moves California forward,” said Chairman Horton. “Moving forward, we will continue to help our small businesses and will seek out new ways to help our companies grow by leveling the playing field and forging strong working relationships between government and private enterprise.”
Soaring gasoline prices, which rose 20.0 percent in the first quarter of 2011, required consumers to pay more at the pump and likely prompted many households to begin replacing aging vehicles. As a result, taxable sales made by gasoline stations increased 22.4 percent and those made by motor vehicle dealers increased 17.4 percent.
Statewide taxable sales by type of business for retail and food services rose 8.8 percent compared to all other nonretail businesses such as business equipment, construction materials, utilities, transportation, finance, insurance, real estate, entertainment, recreation, accommodation, and other services, which rose 9.5 percent, consistent with the national trend in the first quarter of 2011.
In related report thr state reported late last month for the first time in a year, gasoline consumption rose—2.1 percent—despite a hefty 12.6 percent increase in California gasoline prices, according to a report released today by Chairman Jerome E. Horton of the California State Board of Equalization (BOE). Gasoline prices jumped 12.6% to an average of $4.03 a gallon in February 2012, while consumption increased 2.1% compared to a year ago.
“Californians used more gasoline,” said Horton. “This could be a sign that economic activity is picking up and California’s economy is improving. In fact, in addition to the gasoline indicators, non-agricultural and manufacturing employment has increased over the same period last year and the unemployment rate is decreasing, as well as the average number of weeks of claimed unemployment benefits.
California Taxable Sales increased at a growth rate 2.3 percent faster than California Personal Income in the first quarter of 2011, the largest positive gap since 2005 (see chart)