July 23, 2020
Bottom Line: After a dramatic decline in March and April, economic activity in California started to recover slowly in May and June. Nonetheless, the state’s economy has a long way to go to reach pre-pandemic levels. On top of that, the recovery appears to be extremely fragile and could reverse quickly with the recent increase in COVID-19 cases.
The COVID-19 pandemic has reshaped the California economy. Over the last several months, the state has experienced abrupt and dramatic swings in economic activity. While a variety of data is available to track developments in the state economy, drawing clear conclusions from these disparate data points can be difficult. To help make sense of this varied data, this post pulls together and synthesizes ten key data points on the state economy. Our goal is to provide a quick, simple snapshot of recent trends in this data. The graphic below provides this snapshot.
We display each variable as a standardized index that shows how the current level of each variable compares to historic norms. At the top of the graphic, we aggregate the ten variables into a single measure that attempts to capture what changes in the individual variables can tell us about the overall trend in the state’s economy. As this measure shows, California’s economy experienced a precipitous drop in March and April. Beginning in May, however, economic activity began to recover slowly. This recovery continued in June. Despite this, California’s economy remains severely depressed. The state has a long way to go to return to its pre-pandemic economy. On top of that, the recovery appears to be extremely fragile and could reverse quickly with the recent increase in COVID-19 cases.