Hard to tell where it will go from here, and some are optimistic, some not so, but if the national barometer is any indication, the near future seems pretty good.
Dan Walters: California economy on plateau
By Dan Walters - Bee Columnist
Published 12:00 am PDT Monday, May 21, 2007
A red-hot housing market, fueled by loose credit and low interest rates, pulled California out of the brief economic slowdown after the collapse of the dot-com boom -- but now housing has flattened, casting a pall of uncertainty over the state's economic future.
Whether the post-housing plateau is equally brief or the harbinger of a longer-term slide will affect millions of workers and their families, but state and local government officials, whose budgets were fattened by the housing boom, are nervous as well.
Gov. Arnold Schwarzenegger adopted a modestly optimistic view as he released a new version of the 2007-8 budget, seeing "little evidence that the weakness in the housing sector has spread to other parts of the national and California economies."
"California's economy continues to be very sound," Schwarzenegger said. "We have created thousands of new jobs ... unemployment is as low as it has been in three decades, and growth in personal income remains very healthy." The administration forecasts that "slower growth in 2007 (will be) followed by improved growth in 2008 and 2009," citing relatively high employment data.
There's some finger-crossing implicit in those estimates. The state budget has been plagued by chronic deficits even during the years of record revenue growth, thanks to political and legal spending drivers, and Schwarzenegger needs continued expansion to have any hope of stanching the red ink.
