Is there light at the end of the dark tunnel that has been California in recent years or is it merely another train wreck in the making?
The state’s long economic malaise appears to be ending, two sets of economists said last week, while a new postelection survey of Californians finds them more optimistic than they have been for many years.
The flip side is that the state’s recovery from the worst recession since the Great Depression remains slow and fragile and could be derailed by downturns in the national and international economies.
And while Californians’ dispositions have become sunnier of late, they’re still wary and uninterested in another tax increase on top of Proposition 30, which won voter approval last month.
UCLA’s Anderson Forecast issued one of the mildly optimistic analyses of the state’s economy, seeing continued growth in payrolls and personal income and a slow decline in its unemployment rate, finally dipping below 10 percent in 2013.
Beacon Economics, a private firm that does economic forecasting for a number of local communities, issued one for the Riverside area last week and included a somewhat more upbeat state version than Anderson, calling California “a driving force behind the national economic recovery” with nearly 300,000 jobs added in the past year.
However, all economic forecasts contain caveats, such as the uncertainty over slowdowns in Europe and Asia that could ripple into the United States and California, which is more connected to the global economy than most states.
Not all forecasters are as optimistic as Anderson and Beacon. Bill Watkins, who runs the California Lutheran University forecasting unit, has been consistently less sanguine. He and Beacon’s top economist, Chris Thornberg, have often sniped at each other.
The Anderson and Beacon forecasts imply that when Gov. Jerry Brown finalizes his proposed 2013-14 budget this month he, too, will adopt a mildly optimistic economic outlook that will translate into higher state revenue. Credit rating firms are already looking more kindly on California’s fiscal situation.
Californians who are not economists, and who tend to look at the state more viscerally than arithmetically, have brightened their outlooks in recent months, the postelection poll by the Public Policy Institute of California, also released last week, found. But they’re not completely sold.
The percentage of adults saying California is now headed in the “right direction” rose to 44 percent, the highest level in five years, but 50 percent still opt for the “wrong direction.” Significantly, younger Californians are more optimistic while older ones remain more pessimistic, and white Californians are much less positive than Latino or Asian Californians.