California vs. the U.S. Economy

November 26, 2007

At the recent BIS trade show in Long Beach, the (unfunny) joke was complimenting those people working for builders, lenders and suppliers who still had jobs. Not surprisingly, now it seems that the California economy -- as during the recession of the early 1990s -- is in greater peril that that of the overall U.S., as discussed in The Economist and quoting economists Jack Kyser and John Husing.

According to the article, "In the past year California's unemployment rate—a simple measure of economic health—has jumped from 4.8% to 5.6% (see chart). The national rate has risen, too, but not nearly so steeply. And that mild increase has been largely driven by just one state. Out of every three additions to the ranks of the unemployed in the past year, one was Californian."

According to Inland Empire expert John Husing in the article, "...some official statistics are too upbeat. In California, about one worker in 11 is illegal, and thus unable to claim unemployment benefit. In some of the industries that have suffered the greatest job losses, the proportion is considerably higher."