Background on California's Economic Situation - Black Enterprise

Background on California’s Economic Situation

As the President travels to California, the Council of Economic Advisors has compiled some facts that illustrate the impact of the economic crisis on workers and their families in California.

Key Facts

· California’s unemployment rate was 10.1% in January (most recent data available). This is a 4.2 percentage point increase since December 2007 and the fourth highest unemployment rate in the country.

· The state has lost 169,000 (or about 1 in 5) of its construction jobs since December 2007. Although construction was hardest hit, there was also notable job loss in retail sales.

· California’s housing prices have declined 27.4% from their peak in 2006, the highest in the nation. Housing prices have declined 20% in the past year.

· California ranks third highest in mortgages that are seriously delinquent. Only Nevada and Florida have more mortgages 90 days overdue or in the process of foreclosure.

· The Los Angeles metropolitan area had an unemployment rate of 10.5% in January, its highest level since 1983. Orange County, which includes Costa Mesa, has been less affected. Nevertheless, Orange County’s unemployment rate jumped from 4.3% (December 2007) to 6.5% (December 2008).

Labor Market Details

· California lost 541,200 jobs (seasonally adjusted) between December 2007 and January 2009. This is a 3.6% decline, exceeding the national decline of 2.7%.

· ARRA is forecasted to save or create over 396,000 jobs for Californians.

· The Los Angeles metropolitan division alone, which includes Long Beach and Glendale, lost 149,300 jobs (seasonally adjusted). This is a 3.6% decline in employment.

· Construction was hit particularly hard in California. The state lost 1 in 5 of its construction jobs.

· Retail trade lost over 12% of its jobs statewide and 11% in Los Angeles, compared with 8% nationwide.

Housing Market

· The FHFA house price index for California has fallen 20.5% over the past year compared with a 4.5% rate of decline nationally. This is second only to Nevada. Prices have fallen from their 2006 peak by over 27%, the largest such decline in the nation.

· Foreclosures in California exceed the national average. The state ranks 3rd highest for mortgages that are seriously delinquent. Only Nevada and Florida are worse.

Other Facts

· Among the state’s non-elderly population, 20.4% lack health insurance according to 2006-2007 data. This is the 9th worst percentage in the country. California also fails to insure 1 in 8 of its children, which places it 17th worst in that category.

(Source: White House)