California is an economic engine. Why do its residents suffer the most from high interest rates?
Good morning. It’s Monday, July 15. Here’s what you need to know to start your day. I’m Shelby Grad, deputy managing editor for news.
- Californians say high interest rates are hurting their ability to plan for the future.
- New videos and accounts of the Trump assassination attempt raise questions.
- Michelin has added six L.A. restaurants to its California guide.
- And here’s today’s e-newspaper.
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Californians experiencing severe sticker shock
California’s economic engine continues to amaze, with state officials hailing its status as the world’s fifth-largest economy. Still, there have been some rough spots:
- California has one of the nation’s higher unemployment rates, though the latest numbers show the job picture rapidly brightening.
- One of the state’s most storied industries — entertainment — is experiencing a major downturn that could result in more consolidations and job losses.
- Revenues to state coffers have dropped enough to require $16 billion in spending cuts as well as some temporary tax hikes.
- Inflation has squeezed pocketbooks everywhere. But Californians have been particularly hard hit because prices for such things as energy, housing and some services are already higher.
But one pain point has gotten less attention: high interest rates. Times reporters Andrea Chang and Don Lee talked to people across the state about how interest rates are hurting their pocketbooks, business plans and, in some cases, forcing them to delay planned purchases and expansions.
Like with so many other things, Chang and Lee reported, California’s lack of affordability makes things worse.
“The cost of borrowing, whether for mortgages, credit cards or car loans, is the highest in more than two decades. And that is weighing especially hard on people in California, where housing, gas and many other things are more expensive than in most other states,†they wrote.
“California’s economy also relies more on interest-rate-sensitive sectors such as real estate and high tech, which helps explain why the state has been lagging in job growth and its unemployment rate is the highest in the nation.â€
By many measures, the California economy remains the envy of the world. But for most consumers, the Golden State sticker shock is getting harder to bear.
And it’s hardest for lower-wage Californians, according to a study by the Policy Institute of California:
In 2018–19, basic household necessities cost California’s low-income households about $26,000, on average. In 2024, these households would need to spend more than $32,000 on the same goods and services. By comparison, the top income group spent on average $82,000 on these basics in 2018–19, which would now cost nearly $100,000 in 2024.
These issues are already hurting President Biden in the polls. But two Californians often listed as possible replacements should Biden halt his reelection bid will have to address them too.
Today’s top stories
Trump assassination attempt
- Conspiracy theories have flooded the internet, creating a dangerous ‘spiral.’
- The shooting points to the growing threats of political violence.
- The 20-year-old who almost killed Trump was a bright student, had a job and belonged to a gun club
- Trump called for national unity as he recovered.
- New videos and accounts of the assassination attempt raised questions about security and preparations.
Election 2024
- Republican convention kicks off amid heightened security.
- It doesn’t matter which conservative playbook you consult. A second Trump term would mean federal war on California ideas.
- The members of Congress pushing Biden to step aside are nearly all white. Here are some reasons for a racial divide.
Celebrity deaths
- Shannen Doherty, the “Beverly Hills, 90210†bad girl who battled cancer for years, has died at 53.
- Fitness guru Richard Simmons has died at 76.
- Ruth Westheimer, known for frank and funny advice on sexual topics including orgasms as well as menage a trois, has died at age 96.
Wildfires & extreme heat
- Heavy gear, unforgiving terrain and backbreaking work. Now firefighters are contending with extreme heat, too.
- The Lake fire in Santa Barbara County has grown, but the threat to Santa Ynez and Los Olivos weakened.
- As inmates swelter, California prisons remain unprepared for extreme heat.
- Can the A’s play in Sacramento’s oppressive heat?
- Despite cooler temperatures, thunderstorms are increasing the fire risk to parts of Southern California.
- Heat waves are growing hotter and more prolonged. What’s driving extreme temperatures?
More big stories
- Hamas says there’s been no pause in cease-fire talks, and a military chief survived an Israeli strike.
- Carlos Alcaraz swept past Novak Djokovic to repeat as Wimbledon champion.
- “Despicable Me 4†and “Longlegs†led the box office to another strong weekend.
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Commentary and opinions
- Jackie Calmes: How to save the Republican Party.
- Robin Abcarian: The once-secretive right-wing ideology emerging as an overt threat to American democracy.
- Opinion: Some in blue-collar jobs are just one injury away from homelessness.
- Dylan Hernández: How Kei Kamara escaped Sierra Leone to star for LAFC.
Today’s great reads
Unprecedented numbers of gray whales are visiting San Francisco Bay, and nobody quite knows why. Experts only have educated guesses about the prevalence of porpoises, dolphins and humpback whales, too.
Other great reads
- Behind the spectacular collapse of the Alec Baldwin “Rust†shooting prosecution.
- A dry cleaner struggles to survive in an empty downtown L.A. skyscraper. Welcome to the zombie economy.
- Pricey camps. Family favors. Early dashes from work. How do parents survive summer?
How can we make this newsletter more useful? Send comments to [email protected].
For your downtime
Going out
- ðŸ½ï¸ Michelin added six L.A. restaurants to its California guide. Look for the coveted stars next month.
- 🨠Need a hotel near the Hollywood Bowl? Here are nine cool, Angeleno-approved picks.
- 🎢 And we have ranked every Southern California theme park ride.
Staying in
- 📚 Here are last week’s best-selling books.
- 🧑â€ðŸ³ Here’s a recipe for coconut-habanero fish ceviche with poached shrimp.
- âœï¸ Get our free daily crossword puzzle, sudoku, word search and arcade games.
And finally ... a great photo
Show us your favorite place in California! We’re running low on submissions. Send us photos that scream California and we may feature them in an edition of Essential California.
Today’s great photo is from Associated Press photographer Alberto Pezzali, who captured the moment Spanish tennis player Carlos Alcaraz defeated Serbian tennis superstar Novak Djokovic, seen in the background. Alcaraz halted Djokovic’s quest for his historic 25th major victory.
Have a great day, from the Essential California team
Christian Orozco, assistant editor
Shelby Grad, deputy managing editor for news
Karim Doumar, head of newsletters
Amy Hubbard, deputy editor on the Fast Break Desk
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