California鈥檚 economic recovery from the devastations of the pandemic was stronger than previously estimated 鈥� but skyrocketing inflation could rob the state of its hard-earned gains.
Those were the main takeaways from from the state Employment Development Department, which pinpointed California鈥檚 January unemployment rate at 5.8% 鈥� the same as its December rate, which was due to updated figures showing sizable job gains that month. Other key takeaways:
- California saw a 7.4% increase in job gains from January 2021 to January 2022, compared to 4.6% nationally.
- The state has regained approximately 82% of the nearly 2.8 million jobs lost in the first two months of the pandemic 鈥� more than previously projected.
Gov. Gavin Newsom, who lauded California鈥檚 economic prowess in , said the report was evidence that the state鈥檚 COVID-19 restrictions worked.
- : 鈥淥ur approach has been to follow the science while supporting those hardest hit by the pandemic, and it not only saved tens of thousands of lives 鈥� it got our state back to work faster and better than the rest of the country.鈥�
But there鈥檚 still a long way to go: California tied with Nevada for , the last month for which federal statistics are available. The Golden State鈥檚 civilian labor force is still down by 452,000 workers compared to pre-pandemic levels, according to Michael Bernick, a former EDD director and attorney at Duane Morris. And inflation rose 7.9% nationwide in the yearlong period that ended in February, 鈥� the highest rate in 40 years.
- Bernick: 鈥淚nflation has already cut into wage gains in California, particularly the wage gains of lower income workers, and threatens to significantly slow growth.鈥�
- Soaring inflation, plus Russia鈥檚 war on Ukraine, have contributed to eye-popping gas prices: The average price in California for a regular gallon was $5.74 on Sunday, compared to $5.29 a week ago, .
Today, Republican state lawmakers are expected to force a vote on to eliminate California鈥檚 51-cent gas excise tax for six months 鈥� to help people hurting at the pump. (, introduced Friday by Democratic state Sen. Ben Allen of Santa Monica, would require oil refiners to disclose their profit margins on each barrel of gasoline sold.)
- But tinkering with the gas tax appears to be for California鈥檚 supermajority-Democratic Legislature. 鈥淲e need to just leave the gas tax alone and focus on other forms of tax rebates or other supports for working families,鈥� state Sen. Scott Wiener, a San Francisco Democrat, .
- Still, some question whether rebates 鈥� potentially similar to sent last year to millions of Californians 鈥� could worsen runaway inflation. 鈥淲e have an overheated economy,鈥� Republican political consultant Rob Stutzman . 鈥淒oes it really make sense to dump money back in?鈥�
is a nonprofit, nonpartisan media venture explaining California policies and politics.