There are, however, two sides to the economic coin – one steeped in the numbers economists love and the other the admittedly unscientific concerns of ordinary citizens.

A recent Public Policy Institute of California poll found that Californians overwhelmingly believe that bad economic times lie ahead, based in part on experiences with inflation in housing, food, fuel and other living expenses.

Weakness of California Economy

Those sour expectations may be more than just emotion. While the nation as a whole seems to be doing fairly well, as President Joe Biden reminds us almost daily in anticipation of a re-election campaign next year, California’s economy is just so-so.

California’s unemployment rate in June was 4.6%, which doesn’t sound bad – certainly much lower than it was when the state’s economy shut down during the COVID-19 pandemic, pushing the jobless rate to over 16%.

However, it was higher than it had been a year earlier and – this is rather sobering – was the second-highest of any state to Nevada’s 5.4%, and more than twice as high as New Hampshire’s nation-lowest 1.8%.

California’s other economic indices are similarly weak.

The Federal Bureau of Economic Analysis reported in June that California’s gross domestic product – the total of goods and services – in the first quarter was one of the nation’s slowest growing at 1.2%, roughly a third of the growth seen in rival states Texas (3%) and Florida (3.5%). Other states ranged to as high 12.4% in North Dakota.

The BEA’s quarterly report on personal income growth was similarly mediocre. Nationally, it grew by 5.1%, but in California it was scarcely a blip at .7%, very near the bottom. Texas saw 6.7% personal income growth and Florida 7.9%.

Anemic personal income growth has a real-world impact when it attempts to cope with inflation that’s still plaguing California’s families and it also is one of the underlying reasons the state is experiencing declines in personal income taxes and the resultant multibillion-dollar budget deficits.

Citing a “particularly muddy” economic outlook, the Legislature’s budget analyst, Gabe Petek, believes that the state faces bigger budget deficits than Gov. Gavin Newsom and legislative leaders have baked into their new budget.

It’s just as muddy for the family budgets of nearly 40 million Californians.

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