Faced with rising inflation and the ongoing effects of the COVID-19 pandemic, many are expressing uncertainty about California’s economic future and pessimism about their own financial situation. According to the February PPIC Statewide Survey, 12% of Californians mentioned jobs, the economy, and inflation as the top issue for Governor Newsom and the legislature to work on in the next year—similar to a year ago.
About half of California adults (54%) say the United States will have bad times financially over the next 12 months (38% good times)—a share that peaked at 70% in May 2020, a few months after the start of the pandemic, and decreased until last September, when it started to trend upward once more.
Opinions on the economic outlook of the United States vary across racial/ethnic groups, with majorities of African Americans, Asian Americans, and whites saying there will be bad times ahead, compared to fewer Latinos. Half or more across regions in the state expressed a pessimistic outlook.
How are Californians seeing the effects of the pandemic play out in their personal finances? When asked to rate their personal financial situation, 52% of Californians say they are in only fair (36%) or poor (16%) shape, while a slightly smaller share say they would rate their financial situations positively (8% excellent, 39% good).
Today, three in ten African Americans and two in ten Latinos say they are in poor shape, compared to fewer whites and Asian Americans. Across the state, residents in the Inland Empire and lower-income residents are the most likely to say they are in poor financial shape. These ratings have remained relatively stable since May 2020.
Americans saw a 7% increase in prices over the last year—the largest increase since June 1982—partly due to economic supply chain and labor issues triggered by the pandemic. How are rising prices affecting Californians? A solid majority say recent price increases caused their household financial hardship, including 20% saying they have experienced severe financial hardship.
Adults making less than $20,000, Latinos, and residents of the Inland Empire and Central Valley are the most likely to say they have faced severe financial hardship due to recent price increases. In contrast, Asian Americans and adults making $80,000 or more are the most likely to say they are not facing any hardship due to price increases.
As California and the country continue to grapple with the pandemic and rising prices, PPIC will continue to track Californians’ outlook on the economy and their personal financial situations to understand how residents are being affected.