Nail salons are one of the many businesses affected by new closure orders that are expected to slow California’s economic recovery. Screenshot: Reuters video/Produced by Yahaira Jacquez

The economic recovery that had begun has sputtered in light of a new wave of public health measures prompted by the coronavirus resurgence across the country, according to a report by UC Riverside.

Unemployment has fallen since the initial days of the pandemic-related business closures in March and April, but researchers do not expect California to regain all its lost jobs until the end of 2021.

The substantial impacts will hit business owners and workers alike.

Three-quarters of the workers in the state who have already been laid off expected to return to their jobs when business reopened, according to the researchers. That process, though, will now be drawn out longer with the new spike in cases.

According to the analysis, the recovery that appeared to be underway in May already was occurring more slowly in California than in the nation as a whole. They attributed that to other states reopening faster than California.

While disposable personal income fell nationally by 4.9% in May, consumption increased 8.2%, largely due to stimulus checks and unemployment benefits.

But with federal stimulus measures set to expire at the end of the month, the economy could see an even bigger contraction.

Already, some industries have experienced devastating effects. Among the hardest hit has been the leisure and hospitality sector, which lost 6.3 million jobs across the country since March, accounting for roughly 37% of all jobs lost, researchers said.

They also noted that any recent gains made when the stay-at-home orders were relaxed may be lost or significantly reduced with protective measures and closure orders in place again.

“We always knew that controlling the virus was central to the economic recovery, so it’s truly gut-wrenching to watch a new wave of cases trigger this step back in the reopening of businesses and other public places,” said Taner Osman, research manager at the university’s Center for Economic Forecasting, and one of the report’s authors.

Already, 2.2 million workers joined the state’s unemployment ranks from May 2019 to May 2020, according to the report.

The analysis found that employment in the Inland Empire was already down 12% as of May. Even so, the region performed slightly better than San Diego and Orange County, which was down 15%; Los Angeles County, down 13%; and the state as a whole, down 13%.

And more people might soon be out of a job. The researchers forecast that the strain on public budgets from revenue losses will lead to job losses in the government sector.

One bright spot has been logistics, the only major sector to have expanded in the region on a year-over-year basis, adding 2,600 jobs in the Inland Empire since stay-at-home orders began, researchers said.

It’s unclear, with stimulus measures set to end and more job losses predicted, if the spending that led to demand for those jobs can be sustained.

– City News Service

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