Heinz Blasnik- Views You Can Use Message Board

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Strategies & Market Trends : Heinz Blasnik- Views You Can Use

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To: Box-By-The-Riviera™ who wrote (3095)	7/22/2003 4:26:34 AM
From: maceng2	Read Replies (1) of 4904

Some recovery to the tech sector anticipated, while California economy stays in the doldrums asia.reuters.com Budget Woes Seen Hurting Calif. Economy Into 2004 Mon July 21, 2003 02:31 PM ET SAN FRANCISCO (Reuters) - California's giant budget shortfall, the effort to recall Gov. Gray Davis and rising workers' compensation costs will crimp the economy of the nation's most populous state into 2004, according to a forecast issued on Monday. The report from the Los Angeles County Development Corp. said that while the national economy will pick up steam in the second half of 2003, California will lag behind with potentially little or no job growth. "California's economy will struggle to get traction over the balance of 2003 and into 2004," the report said. The main problem for what is one of the world's largest economies is a $38 billion state budget shortfall that lawmakers have so far been unable to bridge due to partisan differences over proposed tax increases and spending cuts. The difficulty in approving a new budget for the fiscal year that began on July 1 has also been compounded by the Republican-led recall effort to oust the Democratic governor, the report said. The huge costs of workers compensation insurance -- already the highest in the nation -- will also hurt the state's economy by spurring businesses to hold back on hiring or even let workers go, according to the report. The survey forecast California's unemployment rate would hover above the national average at 6.7 percent through the end of the year before easing to 6.2 percent in 2004. The current U.S. jobless rate stands at 6.4 percent. Yet the report saw a few bright spots. The technology sector looks set for a modest recovery in 2003 that will gain momentum in the following year while international trade should also improve, the report said.

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