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Sunday, January 1, 2023

Still Waiting for a Sign


Faithful blog readers will know that each week we look at the latest data on new weekly claims for unemployment insurance in California for signs of an economic recession or slowdown. But despite some false signs, the numbers remain at pre-pandemic, boom levels. Despite all the reports of layoffs in the tech sector, the overall numbers don't show a sign of a clear trend as our chart shows:


As we noted in our coverage of the UCLA Anderson Forecast Project's recent prognostications for the new year, the economists at the Forecast provided two scenarios. Either the Federal Reserve will crack down too hard on inflation and an actual recession will result, or it won't and we will have a "soft landing."*

All of this economic uncertainty sets the stage for the governor's state budget proposal which is due out soon. There is already indication that the governor will strike a cautious tone in the proposed budget despite the large reserves that the state has accumulated. UC may be disappointed with the result, although the practice is to thank the governor effusively for whatever the proposed allocation is (and then go to the legislature to see if more can be obtained).

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