Things aren't getting any brighter quickly on the state's economic outlook front, as we are now looking at a staggering 11.6 percent unemployment rate, and a credit rating downturn that could mark the state as a junk investment.
On the unemployment front, the L.A. Times delivers the bad news:
California's unemployment rate inched up in June, reaching 11.6%, up 4.5 percentage points from a year earlier. It was one of 38 states reporting higher unemployment rates in June, the Bureau of Labor Statistics reported today. The state lost 66,500 jobs last month, and has shed 766,300 jobs in the last year.
The national unemployment rate, at 9.5%, wavered little from May, still a significant increase from the 5.6% unemployment rate of June 2008.
This gives us the sixth-highest unemployment rate of any state in the U.S. This data chart of California unemployment rates goes back to 1976, and in that range it has never been so high.
And that's not all....the state government is also facing a potentially devastating (as if we can handle more economic devastation from Sacramento...) credit rating downturn. Again, the Times gives us the bitter truth:
State Treasurer Bill Lockyer warned today that state leaders' failure to reach a budget deal has put California at risk of a credit downgrade that would cut off access to funds needed for building schools, roads and other public works projects.
"With every passing day, the state's credit rating moves closer and closer to the junk pile," Lockyer said in a prepared statement. "If our credit rating sinks to junk status, the state will find the door to the infrastructure bond market locked shut."
National economics blogger for the Atlantic, Megan McArdle, predicts bankruptcy for our state.
The photo associated with this post was taken by Flickr user yuan2003. It was used under user Creative Commons license.
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KCET Maxwell says :
The timing of the California has a bit of a 'perfect storm' feel to it, does it not? Incredible that this economic downturn has coincided with the climaxing crisis of the California state budget. The question is: how connected is the larger global downturn to the current budget crisis in California? My inclination would say 'very connected', but I am not sure I can see the exact reasons why.