California’s setbacks in reopening could burden the U.S. economy.


At Bank of the West in San Francisco, Scott Anderson, the chief economist, is watching the jobless claims data for clues about the direction of California’s economy.

New claims for state unemployment benefits fell by more 40,000 last week, not accounting for seasonal adjustments, but Mr. Anderson said, “I’d be careful about reading too much into that decline.” The number of Californians collecting unemployment has been rising, he noted, “and I think we could definitely see an increase in the weeks ahead, given the closures across the state.”

California is not only the nation’s most populous state, Mr. Anderson noted, but also accounts for about 14 percent of the country’s economic output.

Like many states, it has been pulled in opposite directions. A resurgence in coronavirus cases forced many businesses that had reopened to close for a second time in early July. Bars, gyms, indoor dining and family entertainment centers were affected in many parts of California, a move that came as a surprise to proprietors who had high hopes when they reopened their establishments.

“There is a lot of angst among small-business owners because they spent a lot of money trying to reopen and then they had to close again,” Mr. Anderson said. “There is a question of whether these businesses are going to reopen at all.”

Even a second round of federal loans under the Paycheck Protection Program, as is being discussed in Washington, may be too little, too late, Mr. Anderson said. “I think there are definitely some dark clouds on the horizon,” he said.



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