California’s New Budget Projects a Slow Recovery

Some projections for California’s economy from Governor Schwarzenegger’s budget revise today:

The outlook for the California economy is also for negative growth in 2009 followed by weak growth in 2010, and better growth in 2011:

Personal income is projected to fall 1 percent in 2009; and grow 1.4 percent in 2010, and 3.9 percent in 2011, as compared to 2.5 percent in 2008. The projected decline in personal income is the first since 1938.

Nonfarm payroll employment is forecast to fall by 3.9 percent in 2009 and 0.9 percent in 2010 and grow 1.6 percent in 2011, as compared to a 1.2‑percent decline in 2008.


28 Responses to “California’s New Budget Projects a Slow Recovery”

  1. 1 Courtney G. May 14, 2009 at 8:20 PM

    At least there is a recovery in the future. A small/slow recovery is better than no recovery. The economy is in a very bad state and this is good news to us. I think that there has been such bad commentary and projection on the economy’s future in the past and I think that delays the improvement of it.

    2011 will be a good year for everyone. Until 2011, there might be some more unemployment and hard times, but we all need to work together to speed up the process. It is possible. I’m glad some good news was finally released.

  2. 2 Rene Martinez May 14, 2009 at 11:03 PM

    Wow! Thats awesome. Sounds like 2011 will be a good year for everyone. Which means more traveling, and fun things to do with family, friends etc. Now all we got to do is make sure it doesn’t fall. Seeing how common our economy fluctuates from being good to being really bad, we got to guarantee that are economy gets better.

  3. 3 Michelle V May 15, 2009 at 7:05 AM

    It is good to hear that 2011 will be a good year for the society. It is nice to see that there will be an end to all of these hard economic times in the future. We need to continue working hard to make sure that our economy stays headed in the right direction because if we aren’t careful it can slip back to where it has been. It is nice to see that there is a projected light at the end of the tunnel.

  4. 4 Tim Honeycutt May 15, 2009 at 10:05 AM

    What really got me was the fact that this year will be the first decline in personal income since 1938. It seems absurd that this would happen with the knowledge that we as americans have know. Can we not learn from our mistakes? I sure hope those projections come true because when i get out of college the economy should be good. Let’s just hope the Governator and the next governer can do a good job and atleast keep the debt to a minimum

  5. 5 Jerry Ellison May 16, 2009 at 1:32 PM

    I’m not really all that concerned about this since i’m not from California, but i do find it pretty interesting. Its also crazy that this is the first time since 1938 that personal income has been forecast to drop. Not only is it wild that it has been 50 years that California’s personal income has continued to grow, but nothing has affected this trend since the Great Depression.

  6. 6 Jordon Lovett May 16, 2009 at 3:39 PM

    This information shows that California’s economy will get worse before it gets better. It is promising that California does show some projected growth, but with a state that is currently in debt may cause some major issues for the state in the near future. It will be interesting to see what the states policy-makers decide to do. Even if people start making more money, the state will either need to tax more or cut jobs in order to equalize the budget

  7. 7 annmarie minite May 16, 2009 at 3:44 PM

    I think its great that there is a light at the end of the tunnel. I knew it would take a few years but atleast there is hope. I am shocked that California’s personal income has continued to grow since 1938 and that this recession is changing it. I do believe things will get a bit worse, but everything will eventually turn around.

  8. 8 Robert LaVoy May 16, 2009 at 4:19 PM

    It’s good to see that California’s economy is about to start turning around. The current recession seems to be turing around recently with a steady climb in the NYSE, but to see how California is going to deal with its debt issue is another story. Will they increase taxes or cut spending?

  9. 9 SMCecon May 16, 2009 at 4:28 PM

    I would be interested to see these figures placed next to some unemployment projections. If unemployment reduces severely for the rest of 2009 then the decrease in income might not carry so much weight. It may be a case of a drop in income in order to spare further incline in unemployment. I am curious as to how these statistics are calculated and what other factors contribute because its hard to take a statistic for what it is due to hidden variables and manipulation.

  10. 10 nancy moussa May 17, 2009 at 8:02 AM

    I hope this article is true. We need our economey to turn around. We also need to learn from this downfall and watch our spendings. Even though the economey will be turning around, we will still all have to work to pay off our huge debt, which will be another major problem.

  11. 11 Cole Scharton May 17, 2009 at 9:21 AM

    This is a very interesting projection. I am curious where the forecast projections came from, especially the 2010 and 2011 projections. I think are great numbers, but how accurate can they be? I’m not sure what the projections were for this year two years ago, but I am pretty sure they did not project this recession. This is the trouble with estimations and forecasts, it is impossible to predict with so many variable. Although if these numbers are true, then we don’t seem to be in that bad of shape. 🙂

  12. 12 jenna s May 17, 2009 at 9:34 AM

    The future growth is some great news! While this growth is slow, I do think that it is important for California to work on stabilizing and strengthening its economy. State officials need to concentrate on making the the budget feasible and beneficial. If the state cannot find some budget reconciliation, California will only fall into more budget deficits in the long-run. The state needs to find the best balanced budget that will promote long-run growth.

  13. 13 Jay Surface May 17, 2009 at 5:49 PM

    A slow recovery is better than no recovery and constant decline. It is sad to think that things are going to get really bad before they get good. Unfortunately it is always darkest before the dawn. Hopefully California voters will wake up and use their votes wisely from now on and not choose policymakers who are going to screw the state instead of help it.

  14. 14 Tom Jones May 17, 2009 at 6:32 PM

    According to Schwarzenegger our economy will slowly push its self back to stability and then hopefully to expansion. By 2011 our economic growth will have risen and from there it should continue to stability. Since personal income will grow from 1.4 in 2010 to 3.9 in 2011 shows that these people will be able to sepnd more money fueling the economy and helping other states out with poor economys.

  15. 15 Simon Kudus May 17, 2009 at 7:16 PM

    Taxes are high enough now. We need to do real cuts across the board and learn to live within our means. That is what every hard working American is starting to do. Our legislators need to grip reality and tell people the government is not immune and needs to do the same thing to responsibly spend our money. People have the ability to handle the truth but politicians think they need to tell us something else. They treat us like children because they think we cannot handle bad news, and many special interests validate that view by whining at every potential cut. We have lost our way, and if we as Californians don’t have the will to change our behavior we deserve the catastrophic consequences.

  16. 16 wallacej May 17, 2009 at 8:00 PM

    It’s great to here we are moving in the right direction. People just arn’t spending money like they used to in order to boost our economy. Our personal income growth has increased which will lead to more spending in the future. We are looking to exspand our economy. Can’t wait till 2011.

  17. 17 Dennis K May 17, 2009 at 9:10 PM

    ANY recovery is better than a decline in recovery. It’s great to see everything picking up in the economy. Hopefully this will bring people’s confidence up and get them through this recession. It is a bit slow, but hey something to look forward to in the next few years. No where to go but up

  18. 18 Michael DeBoer St. Mary's May 17, 2009 at 10:44 PM

    As long as unemployment doesnt keep getting worse, this prediction will be a very good thing in the future. If unemployment does get worse, it is likely wages will be cut back in order to try to prevent unemployment. As soon as everyone starts to receive jobs again, that is when we can expect an increase in income.

  19. 19 Leonardo Sanchez Econ 101 May 18, 2009 at 11:55 AM

    Yes! 2010 seems to be agood year for all of us. Employment may rise finally, The economy itself may have a brighter future.

    This means great news to aome and ok news for others. This means since everyone is going to have money (We hope) thne house are

    going to be on the rise. Like everyone knows the house are crazy cheap and now is the time to buy! We are really going to regret

    it when the economy is at its best and house are out of our reach. But of course in a longer view everyone willl spend to

    get what they need by buying more products. 🙂

  20. 20 Claudio M Ramirez May 18, 2009 at 4:12 PM

    Although slow, a recovery is envitable in the near future just like the state of out US economy. It was pretty obvious that it wasnt going to happen over night and a year and a half projection is not unrealistic and about the time length that I had in mind but during a recession there is only one way to go and thats UP..I just hope its alot sooner then later

  21. 21 Leticia Martinez May 18, 2009 at 5:30 PM

    The announcement of economic growth can be very discouraging, making people increase their savings which is nothing new of how things are going st the moment anyway. The only problem is that what the state needs is for people to start going out and spending money so that it can circulate and create some output. People need to realize that they just need to fight it out because there is a light at the end of the tunnel and we’re almost there.

  22. 22 Santi Orona May 18, 2009 at 9:51 PM

    These numbers are encouraging. Although income will decrease next year, at least it will improve the in 2010 and 2011. Considering I will be graduating college in 2012, this gives me encouragement that the economy will be somewhat stable. I am worried that jobs will be scarce, but this gives me some hope I won’t be in too hard of a situation after college. It is also encouraging to see personal income will increase as well

  23. 23 Rachel Sturm May 19, 2009 at 5:09 PM

    I understand that the regrowth of the economy will be slow, but I did not expect the income to decrease such as they predict it will. I expected a 0% increase, but a negitive 1% is a bit of an eye opener. I am assuming that this decrease will come with inflation factored into the equation….

  24. 24 Alysaa McKinney May 20, 2009 at 10:24 AM

    I think these sort of predictions are much more realistic than the articles I see every day of people predicting “green shoots” at every opportunity. More often than not these were the people who ignored or simply did not see the housing bubble problem until it was far too late. A healthy dose of realism is good for everyone.

  25. 25 Javier Ochoa May 20, 2009 at 1:32 PM

    Any growth is better then no growth. I think its normal for thing like this to take time, because its something that it not fixed that easily, so the suffering is something normal. In order for things to improve, they might have to suffer, so this is normal. As we can see from the information, the suffering now will definitely pay off later in time. Its something that people should keep in mind when complaining about this.

  26. 26 Debbie May 20, 2009 at 2:31 PM

    It is very encouraging to see that in a couple of years we should be in a better position that we see ourselves in today. The most important thing is for those of us out there struggling to make sure that we keep our ends meeting, we maintain the courage and hope to see this come to pass. 2-3 years may not seem like a long time to some, however, it can be a lifetime to others. Like everything else, there are opportunity costs that we are paying now, to see the effects in the long run.

  27. 27 wordtown May 25, 2009 at 12:52 PM

    Things will not change over night, but at least we are headed towards a positive instead of a negative. It’s upsetting and sad to see that things will not change much in this year of 2009, but we have to keep on fighting. It will be a slow process, but eventually things will start turning around for us and our economy. We have to keep on fighting for our future to be better.

  28. 28 Andrew Curry May 25, 2009 at 7:01 PM

    Well at least things are being projected to improve and not decline. it shows somewhat of a chance for hope in our economy in the coming years. to bad 2009 will be a decrease in everything. oh well, take the good with the bad i assume

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