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Reviewing Sacramento’s economy: first quarter

I-5, Downtown Sacramento

Sacramento’s struggling economy survived the first quarter of 2013, despite continued high unemployment and rising cost of living. SacTV.com is currently exploring data on the local economy to make comparisons with the national picture. As it stands, it appears that the local region is still hurting, although the worst of times seem to be behind us.

Unemployment in Sacramento County, which rose slightly in January, still hovers around ten percent, marking a huge improvement compared to 2010 when it was soaring at 13 percent. But the situation is still worse than the national figure, which is a hair below eight percent. Part of Sacramento’s unemployment crisis has been that the Capital City has a huge government workforce that keeps shrinking due to state and local budget cuts. On a county by county basis, Yolo County has the highest unemployment at 12.7 percent, while El Dorado County is at 10 percent. Placer County has the lowest unemployment in the region at 8.9 percent. 

On April 1, local gas prices range from $3.57 to $4.39 per gallon, depending on which gas station you visit. Arco, Sam’s Club and Costco currently have the lowest gas prices in the region.The lowest prices can be found in the Arden Fair, Carmichael, Broadway, south area and north of the Sacramento River between I-5 and I-80. Other areas have a wider mix of prices, as shown on SacTV’s info page featuring a map of gas prices powered by GasBuddy.com. Sacramento’s average gas price is $3.89 per gallon, compared with the state average of $4.03 and the national average of $3.62.

High gas prices, which are partly a result of Wall Street speculators running up oil prices, drive up many other market prices due to distribution costs. That partly explains high food prices, which are also affected by the Midwest and California drought. January and February turned out to be California’s driest months ever, although Sacramento was lucky to experience rain over the weekend. 

The housing market is somewhat stagnant after bottoming out in 2011. Even though foreclosures are down significantly the past year, home sales are slightly down. Then again, inventory is down as well, meaning supply is down, which in a free market would normally create higher demand. But keep in mind, the only reason inventory is down is because big banks are keeping many foreclosures off the market. That’s just how the game works, as banks have maintained control of the housing market, even though it hasn’t really created any boom in sales. You would think that investors all over the world would be scrambling to buy all kinds of cheap property in Sacramento, but it’s not happening. Perhaps prices are still too high for buyers, as asking prices have increased the past year.

So how about the indie revolution? It would help if Sacramento were a bigger part of it since nationally it’s been small to medium businesses accounting for most of the job gains the past few years. Corporations are still talking about layoffs, despite overall record corporate profits and record low taxes as unions continue to gradually diminish, which has been the trend decade after decade since the 1950s.

Sacramento definitely needs a boost in small business help. Although some small businesses have expanded through the recession, it is not yet evident that there is a boom recovery going on with independent owners. Part of what may help small businesses may not be physical location. It may have more to do with online opportunities. More and more people are leaving the corporate world to become online entrepreneurs. It will be interesting to see if and when Sacramento catches on to this growing trend.

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