California’s economic recovery is lagging behind the rest of the U.S., with unemployment higher than the national rate of 9.7 percent, a tepid housing market and low manufacturing numbers.
Rick Wartzman, executive director of the Drucker Institute at Claremont Graduate University, says California saw some of the highest foreclosure rates and the greatest drop in housing prices during 2008 and 2009, and “then it just began to drag everything else down with it,” from tourism to retail. The state accounts for 13 percent of U.S. GDP, so if the state lags, everything else will lag, according to Wartzman.
Wartzman does note some positive signs for a comeback for the state: tech is rebounding both in spending and employment, median home prices have been up for the last six months or so, and trade is turning around after two dismal years. But California will also need to fix its budget situation, and many economists think unemployment will hover around 12 percent into 2011 despite the recovery.