California’s Economy Showing Signs of Life

Positive news for the one of the states hardest hit by the recession

The recession hit few states as hard as California, but all economic signs are pointing to the state rebounding after years of suffering from a lagging economy.

A tour around the state’s major cities show abandoned homes and vacant business buildings. This is due in large part to the states high unemployment rate, the third highest in the nation. In October 2011 the unemployment rate in the state was 11.5 percent, but it has since dropped to 10.1 percent last month, its lowest level since February 2009.

California really suffered after the housing bubble burst. In October, home sales rose 25 percent and are sitting on the market for a much shorter time than they have been. New home construction is also on the rise.

Most notably, the state’s deficit has fallen dramatically. The California Legislative Analyst’s Office projects that that the deficit will be $1.9 billion, down from a staggering $25 billion at one point.

While most Californian’s still feel that the state is in a bleak position, those that feel the state is heading in the right direction are increasing in number. In fact, according to a poll by the University of Southern California/Los Angeles Times, said that 38 percent of state residents feel that the state is making progress, that’s double from more than a year ago.

Analysts say that California is a harbinger of things to come across the country.

“I think the state is turning a corner,” said Enrico Moretti, a professor of economics at the University of California, Berkeley to the New York Times. “We are going to see a more and more polarized state.”

State lawmakers say that elected officials could learn a thing or two about the way California residents responded to tax raises — a similar response may help the country avert the fiscal crisis.

For more on California’s turnaround, head to the Times.

ACROSS THE WEB