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Walters: Newsom Paints Rosy, but Flawed, Economic Picture
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By Dan Walters, CalMatters Commentary
Published 3 years ago on
June 7, 2021

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There is a seamless connection between what Gavin Newsom is saying and doing as governor and his campaign to survive a recall, encapsulated in the slogan “California Comeback.”

Newsom’s much-revised state budget, unveiled this month, is centered on a “$100 Billion California Comeback Plan” that would, he says, put the COVID-19 pandemic and its economic fallout in the rearview mirror.

Last week, when new employment data were released by the federal Bureau of Labor Statistics, Newsom immediately hailed them as proof that under his leadership, the state is booming again.

“California is continuing to lead the nation’s economic recovery, adding 101,800 jobs in April — 38% of all the jobs created throughout the entire country,” Newsom crowed. “Over the past three months, California has created 390,300 jobs. But we’re not letting up; the California Comeback Plan is the biggest economic recovery package in the state’s history and will provide historic investments in small businesses and workers to bring California roaring back.”

Dan Walters

Opinion

Newsom ‘Cherrypicking’ Favorable Employment Numbers

A closer examination of the latest employment numbers, however, indicates that — as politicians are wont to do — Newsom is cherrypicking the most favorable economic indicator while ignoring others that are less positive.

One of the latter is the state’s unemployment rate of 8.3% in April, unchanged from the March level despite the supposed surge in new jobs. It’s still markedly higher than the national jobless rate of 6.1% and is the nation’s second highest behind Hawaii’s 8.5%.

California’s unemployment rate had been the nation’s third highest in March, but New York improved enough to displace California in April. Four states were tied for having the nation’s lowest jobless rates of 2.8% in April. Arch-rival Texas was slightly higher than the national rate at 6.7%,

The data point cited by Newsom, that California added 101,800 jobs in April, 38% of the nation’s job gains, is also somewhat iffy.

The California Center for Jobs & the Economy, a business-supported research organization, points out that the jobs number is a “seasonally adjusted” estimate, rather than a hard count, noting that the federal agency “so far has revised their adjustment formula three times in an effort to overlay seasonal factors to data that is overwhelmingly driven instead by the pandemic.”

“The underlying unadjusted numbers instead show California gaining a stronger 151,500 nonfarm jobs, and the U.S. doing far better with a gain of 1,089,000,” the center’s analysis continued. “Using the adjusted data, California had 38% of the national jobs gain. Using the more relevant unadjusted, California had 14%. As of the April numbers, California has regained 48% of the nonfarm jobs lost to the state shutdowns. The U.S. in total has regained 63%.”

‘California Comeback’ Still Has a Long Way to Go

Newsom’s Employment Development Department (EDD) simultaneously released its version of the federal jobs report, which demonstrated just how much ground California must regain to return to pre-pandemic levels.

EDD said that just 38,600 more Californians were employed in April than in March while 1.6 million remained unemployed — and that doesn’t count those who have dropped out of the state’s workforce.

The employment situation is especially daunting in Southern California. The Los Angeles region had the highest unemployment rate of any major U.S. metropolitan area in April at 11.7%, dragging down the state as a whole.

So, it would seem, California is recovering, bit by bit, the more than three million jobs lost when Newsom, under emergency decrees, closed large segments of the state’s economy a year ago to battle the pandemic. However, we still have a very long way to go before he can legitimately claim a California Comeback.

CalMatters is a public interest journalism venture committed to explaining how California’s state Capitol works and why it matters. For more stories by Dan Walters, go to calmatters.org/commentary.
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