CA jobless rate drops to 8.6 percent

June 24, 2013

By John Seiler

The good news: California’s unemployment rate dropped to 8.6 percent in May. That’s the lowest since the 2008 Great Recession struck.

The bad news: It’s still twice as high as it was in 2006, before creaks began showing on the fake “boom” of the mid-2000s.

In any decent recovery, the unemployment by now would be back down below 5 percent. Not this time.

This is the new reality: The immense new taxes imposed on us by the state and federal governments, along with preposterous new regulations, have prevented faster growth. Which means that the next recession will hit with the economy not as high as it ought to be; which in turns mean the recession likely will be harder.

It’s like when you only partly recover from a cold, then the flu hits you. It’s harder because you’re not fully recovered from the previous bout with illness.

And the rest of the economic news is not great. The Federal Reserve Board has been increasing interest rates. It had to do so eventually — and indeed more needs to be done — because interest rates were at zero percent. And zero percent means the middle class can’t save, invest and create new businesses and jobs.

But higher interest rates will dampen the stock and housing markets. Already, we’re seeing this. Today stocks continued their recent slide, with the S&P down almost 2 percent.

And China’s economy, now the second largest in the world, continues to stall.

All the happy talk by Gov. Jerry Brown and others about how “California is back!” and the state budget will be balanced into the foreseeable future was just fiction.