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The Golden State Has a Case of the Blues : Californians Are in a Much Gloomier Mood Than Rest of the U.S.


There is no surprise that Californians--hit by a jobs hemorrhage, fiscal crisis, defense cuts and a real estate slump--feel gloomier about the economy than do Americans overall.

What's noteworthy is how much gloomier. A recent Los Angeles Times Poll found that 60% of Californians believe their state is still mired in serious recession--more than twice the level of gloom found in recent nationwide surveys.

Asked about the jobs picture, 35% of Californians predicted that it would get even worse in the next three months. Just 16% of Americans expressed that bleak view in a Times Poll conducted nationwide in February.

Psychologists can debate whether the state is having a collective nervous breakdown, but the poll, along with other recent evidence, at least hints of widespread depression: By their buying plans, expectations for jobs and the economic outlook, Californians remain much more pessimistic than other Americans.

Only 11% of California residents said there was no recession right now--or if there was, the slump was mild. By contrast, 45% of Americans took the benign view a few weeks earlier.

The Times Poll of 1,294 California adults was conducted from March 20 to March 22, a week after the Pentagon proposed shutting down eight major military installations in California and a range of other cutbacks in the state. The nationwide poll of 1,273 Americans was taken Feb. 18 and 19.

Both surveys, which were supervised by Times Poll Director John Brennan, had a sampling error of plus or minus three percentage points.

A note of perspective: The mood outside California is hardly euphoric. A recent survey by the Conference Board found that consumer confidence nationwide has diminished for three straight months. Despite the U.S. recovery, confidence is much closer to its recessionary lows than to the soaring heights of 1989, the business research group found.

But if economic anxiety is widespread nationally, it appears epidemic in the Golden State. U.S. consumer confidence registered at a level of 62.6 in a recent poll by the Conference Board; the Pacific region, largely reflecting California, lagged at 49.1.

What's more, the national index has fallen by 15 points since the beginning of the year; the West Coast level has fallen by 25 points.

"It's been in a slide since December," Jason D. Bram, an economist at the Conference Board, said of California. He added: "A year ago, the Pacific region was about average, maybe even a little above for the country. Now it's the lowest."

Economists pay close attention to consumer confidence because household spending supports two-thirds of the U.S. economy. Experts view the mood of consumers as a weather vane indicating future economic conditions. In The Times Poll, just 36% of Californians said it was a good time to plunk down money for big expenses such as automobiles, appliances or vacations.

By contrast, the February poll of Americans nationwide found that 44% considered it a favorable time to spend money on big-ticket items.

Californians' downcast descriptions of current economic conditions were about as bleak as they were several months ago, the new Times survey found, but their expectations for the future have diminished.

Asked if the state's economy would rally in the next few months, only 16% had a favorable reply. Last October, 23% responded positively. Similarly, 31% of Californians predicted that the state economy would deteriorate in the near future; last October, just 21% had such a gloomy assessment.

California is home to fewer optimists these days than the country overall: Only 20% expected the jobs outlook to improve in the next few months; nationwide, 30% were more hopeful.

The California malaise is perfectly rational, however. UCLA economists predicted earlier this week that the recession will last through 1993, with continued cuts in aerospace and defense, state and local government layoffs and real estate weakness.

Key ingredients needed for the state's recovery--such as a sustained upturn in housing starts and increased demand for goods and services inside California--have yet to appear, according to the UCLA report.

"As we approach the third anniversary of California's historic recession, the recovery is still just a twinkle in the eye of an anxious public," said David G. Hensley, director of the UCLA Business Forecasting Project.

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