The California Legislature adjourned for the year on September 21, 2015. The EDC tracked 49 bills through the session, of which 23% passed to the Governor, 10% died while the remainder will be considered again when the legislature reconvenes on January 4, 2016. Our video update can be viewed here (Download slides) You can also download the full Legislative Update Report.
Financial Market Drama No Indicator of U.S. or California Economies
The dramatic machinations occurring in U.S. financial markets have little connection to what is happening in the economy as a whole. The Fall edition of Beaconomics says dark pools, high speed trading, and a proliferation of electronic exchanges have caused the markets to grow increasingly out of sync with the real world.
“The markets are looking more and more like a group of hyperactive first graders drinking espresso and playing full contact musical chairs,” said Beacon Economics’ Founding Partner Christopher Thornberg, one of the forecast’s authors.
Given positive data on U.S. employment growth, consumer spending, business investment, industrial production, and construction, the new forecast has the nation’s economy growing by 3% this year, the best showing since the recovery began. Indeed, the U.S. Bureau of Economic Analysis recently revised its 2nd quarter growth estimate upwards, to 3.7%, substantially higher than its initial reading.
Thornberg does warn that the unexplained volatility in the markets (“The markets turned highly volatile for almost no reason,” he writes) is cause for concern and that these episodes may become increasingly frequent given today’s trading environment. “Volatility may benefit traders but it hurts investors,” he said.
California’s economy looks even better with the state outpacing the nation in job growth for 40 consecutive months. Over the past year California has been the 5th fastest growing state in the nation and the single largest source of new U.S. jobs.
Moreover, wages are finally beginning to move. “Despite an improving economy, there has been a distinct lack of growth in workers’ wages for some time – especially among lower wage workers,” said Beacon Economics Director of Economic Research Jordan Levine, one of the forecast’s authors. “Today, the economic expansion has finally given way to a more broad-based improvement in wages, something that should be very welcomed due to the damaging effects growing income inequality can have on the health of the overall economy."
Widening inequality is one of the negative trends that both authors say is occurring in California and in the United States as a whole. Read all the positive and negative news at the full forecast report.
View Fall Edition of Beaconomics
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