California unemployment rate holds amid inflation worries – Press Telegram
By Adam Beam | The Associated Press
California’s unemployment rate remained steady in January as the nation’s most populous state added 53,600 jobs as a sign that the economy is slowly returning to pre-pandemic levels.
But rising inflation over the past year, combined with rising gas prices caused by uncertainty over the Russian invasion of Ukraine, could quickly dampen state growth because people are likely to spend less as prices rise.
The latest figures released on Friday show that California outperformed the rest of the nation in employment growth last year, up 7.4% from the national average of 4.6%. California has now regained 82% of the approximately 2.7 million jobs the state lost in March and April 2020, when Gov. Gavin Newsom issued the first state-of-the-art stay-at-home order that forced many businesses to close because of the pandemic.
“Our focus has been to follow science as we support those most affected by the pandemic, and not only has it saved tens of thousands of lives, but it has made our state work faster and better than the rest of the country,” Newsom said. Friday. in a press release.
California still has a shortage of workers. The state’s workforce, defined as people who work or are actively seeking work, is still 452,000 below what it was at this time last year. Fewer workers have made some companies raise wages, especially in the trucking industry, as companies struggle to keep up with demand.
Truckers had the highest job gains in California in January, responsible for most of the 26,600 new jobs in the trade, transportation and utilities sector, according to the California Department of Employment Development. In all, eight of the state’s 11 industries added jobs in January, a strong month as the omicron variant of coronavirus was still spreading at the time.
“We’ve recovered almost every job we lost during the pandemic, but there are these two big changes. One is that the structure of remote work has come to stay, and two, we still have people on the sidelines,” said Michael Bernick, former director. of the California Department of Employment Development who is now Duane Morris’ attorney.
But those higher wages of workers were offset by rising prices. Nationwide, consumer prices have risen 7.9 percent over the past year, the largest increase since 1982. The average price of gasoline in California on Friday was a record $ 5.72 a gallon, according to the AAA Automotive Group. .
Sung Won Sohn said California’s growth in its gross domestic product must remain at 2.5% or more to keep the unemployment rate stable. He expects the state to be entering a period of slow economic growth, around 2% or less, while prices continue to rise, a phenomenon known as “stagflation”.
“I don’t want to use the term‘ recession ’, but we shouldn’t rule out the possibility that the economy will get much worse, especially if the price of oil exceeds $ 150 a barrel and stays there,” Sohn said.
Economic uncertainty has so far not affected California’s tax revenue. The latest forecast from the non-partisan Office of Legislative Analysts says there is a “very good chance” that tax collection will be much higher than expected this year, with between $ 6 billion and $ 23 billion in extra money.
During its annual State of the Union address on Monday, Newsom proposed giving taxpayers a discount to help offset the high cost of fuel. Democratic leaders in the state legislature have also said they are considering some sort of tax cut this year given California’s projected large surplus.
California unemployment rate holds amid inflation worries – Press Telegram Source link California unemployment rate holds amid inflation worries – Press Telegram
