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Santa Cruz County: Are we ready to have the current set of business limitations rescinded on June 15? In an early indication, Governor Gavin Newsom stated, “California has made incredible progress in the fight against COVID-19, with the lowest case rates in the entire country and millions more vaccines administered than any other state. But we aren’t stopping there, we’re doing everything it takes to get Californians vaccinated as we approach June 15 to help us safely reopen and bring the state roaring back.” At the June 4 press conference, the Governor selected the first 15 lucky Californians to be awarded $50,000 for doing their part in getting vaccinated against COVID-19. The $750,000 awarded on the June 4 randomized drawing is part of California’s new $116.5 million VAX for the Win program — the largest vaccine incentive program in the nation — which includes $50 incentive cards to newly vaccinated residents and cash prize drawings for all who have received at least one dose. Also on June 4, Governor Newsom stated he wants to maintain the emergency order and some capacity constraints on businesses even after June 15. We don’t know the specifics, yet. But let’s assume that on June 15 the blueprint regimen will be ditched and nearly all constraints on businesses will be lifted. Vaccinated people will no longer need to wear masks in most situations, aligning the state with CDC guidelines. We have more to report on that topic later. With the change from the Blueprint to Recovery to the new normal, we certainly saw more people out and about in Santa Cruz and Monterey Counties over the Memorial Day holiday. Let’s take a look at some interesting national economic trends: The United States’ Economy / May 2021 > Fiscal stimulus in March generated the largest increase in personal income on record; > Consumer spending soared in March, rising nearly 4 percent; > First Quarter GDP surged 6.4 percent; > April 2021 auto sales was the strongest April in the history of the U.S. auto industry; > The labor markets are roaring back, especially in the wide-open states — California has seen tremendous revenue increases that were unpredictable as recent as early March; > Manufacturing production and inventories have risen sharply this year; > The housing market has barely cooled, and selling values keep soaring — we know that well here along the Central Coast as finding a home or rental is nearly impossible; > The March 2021 median price was 17.2 percent higher than in March 2020; > Vaccination rates have ramped up as supply becomes more available. According to the California Forecast Report, consumer spending would have been higher if not limited by pandemic-obstructed spending on services. As more people are out and about — we should expect a surge in higher rates of spending which could translate into a meaningful boost to economic growth. UCLA’s forecast is somewhat more bullish than the economic projections underpinning the Biden administration’s budget proposal sent to Congress last week. The White House predicted inflation-adjusted GDP growth of 5.2% in 2021; 3.2% in 2022; and 2.0% in 2023. UCLA’s outlook is in line with those of other prominent economists. The median forecast of 71 economists surveyed by Bloomberg last month projected 6.6% GDP growth this year, 4.1% next year and 2.4% in 2023. “The U.S. and California pandemic recovery is expected to be as exceptional as the pandemic recession was dire,” said Scott Anderson, chief economist at Bank of the West in San Francisco. The UCLA Anderson School of Business forecast reports similar upside growth in our economy. California’s strong technology and white-collar business sectors, along with a relatively rapid boost in home building, will buoy California’s economy, offsetting a slower return of tourist-dependent leisure and hospitality jobs, according to the UCLA Anderson quarterly forecast. In the nation and in California, “We are about to have one of the best years of economic growth that we’ve had since World War II,” said Leo Feler, the UCLA Anderson Forecast’s senior economist. “We’re looking at a boom time for the U.S. economy.” Economic growth was impressive in the first quarter of 2021, but we can anticipate for a higher pace in 2nd and 3rd quarters as mass vaccinations continue and business restrictions are reduced or eliminated. Real GDP will reach its 2019 peak by the end of this quarter (2021 Q2) and be back to its prior (2019) trend by 2022 Q1. However, through April 2021, the recovery is geographically uneven across California, with inland counties reinstating their workforces faster than coastal counties or the Bay Area. Some of these inland counties will recover all of their pandemic losses by year’s end. Take a look at this graph provided by the California Forecast Report. Counties benefitting largely from tourism – Santa Cruz, Monterey, Orange, Los Angeles, San Francisco, Sonoma, and Napa are dead last in March 2021 job growth, year over year, among all counties in California. Regarding the labor market recovery from the pandemic job loss, the inland counties are clearly dominating the coastal economies. One of the reasons cited was the abundance of warehouses of big online retailers — think Amazon — where during the pandemic online consumer purchasing power was at an all-time high. Now, back to the mask-wearing issues. What to expect this summer: Beyond the Blueprint On June 15, all industry and business sectors listed in the current Blueprint Activities and business Tiers Chart may return to usual operations with no capacity limits or physical distancing requirements*, with limited exceptions for mega events. Exceptions include schools, healthcare settings and some other public settings Mega Events (sporting events, concerts, etc.): > Indoor events will be limited to 5,000 individuals and will require proof of vaccination or negative COVID-19 status to attend. > Outdoor events will be limited to 10,000 individuals and are strongly encouraged to follow the same regulations as indoor events. > All Californians will continue to follow state masking guidelines as well as state and CDC travel guidelines. https://www.cdph.ca.gov/Programs/OPA/Pages/Communications-Toolkits/California-After-June-15.aspx Revised Cal/OSHA Emergency Temporary Standards Awaiting approval by state Office of Administrative Law. In effect by June 15. Prevention program: > Employers are still required to maintain a written COVID-19 Prevention Program but there are some key changes to requirements: > Employers must review the California Department of Public Health. > COVID-19 Prevention training must now include information on how the vaccine is effective at preventing COVID-19 and protecting against both transmission and serious illness or death. >https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/Interim-Guidance-for-Ventilation-Filtration-and-Air-Quality-in-Indoor-Environments.aspx Face coverings > Indoors: > Fully vaccinated workers without COVID-19 symptoms do not need to wear face coverings in a room where everyone else is fully vaccinated and not showing symptoms. > Where there is a mixture of vaccinated and unvaccinated persons in a room, all workers will continue to be required to wear a face covering. > Outdoors: > Fully vaccinated workers without symptoms do not need to wear face coverings. > Outdoor workers who are not fully vaccinated must continue to wear a face covering when they are less than six feet away from another person. Physical Distancing - after June 15 > Employers can eliminate physical distancing and partitions/barriers for employees working indoors and at outdoor mega events if they provide respirators, such as N95s, to unvaccinated employees for voluntary use. Physical Distancing - after July 31 > Physical distancing and barriers are no longer required (except during outbreaks), but employers must provide all unvaccinated employees with N95s for voluntary use. > Exclusion from the workplace: Fully vaccinated workers who do not have COVID-19 symptoms no longer need to be excluded from the workplace after a close contact. As we move into the peak summer months and try to comply with the above “Beyond the Blueprint” guidelines, we hopefully will see an economic uptick in the coastal tourist-based economic regions of the state. The challenge for Santa Cruz and Monterey County restaurants, retail stores and the hospitality sector: Can they find employees? Some restaurant owners have set up incentive bonus pay options to encourage potential hires to join their organization.
Santa Cruz County: Are we ready to have the current set of business limitations rescinded on June 15? In an early indication, Governor Gavin Newsom stated, “California has made incredible progress in the fight against COVID-19, with the lowest case rates in the entire country and millions more vaccines administered than any other state. But we aren’t stopping there, we’re doing everything it takes to get Californians vaccinated as we approach June 15 to help us safely reopen and bring the state roaring back.” At the June 4 press conference, the Governor selected the first 15 lucky Californians to be awarded $50,000 for doing their part in getting vaccinated against COVID-19. The $750,000 awarded on the June 4 randomized drawing is part of California’s new $116.5 million VAX for the Win program — the largest vaccine incentive program in the nation — which includes $50 incentive cards to newly vaccinated residents and cash prize drawings for all who have received at least one dose. Also on June 4, Governor Newsom stated he wants to maintain the emergency order and some capacity constraints on businesses even after June 15. We don’t know the specifics, yet. But let’s assume that on June 15 the blueprint regimen will be ditched and nearly all constraints on businesses will be lifted. Vaccinated people will no longer need to wear masks in most situations, aligning the state with CDC guidelines. We have more to report on that topic later. With the change from the Blueprint to Recovery to the new normal, we certainly saw more people out and about in Santa Cruz and Monterey Counties over the Memorial Day holiday. Let’s take a look at some interesting national economic trends: The United States’ Economy / May 2021
According to the California Forecast Report, consumer spending would have been higher if not limited by pandemic-obstructed spending on services. As more people are out and about — we should expect a surge in higher rates of spending which could translate into a meaningful boost to economic growth. UCLA’s forecast is somewhat more bullish than the economic projections underpinning the Biden administration’s budget proposal sent to Congress last week. The White House predicted inflation-adjusted GDP growth of 5.2% in 2021; 3.2% in 2022; and 2.0% in 2023. UCLA’s outlook is in line with those of other prominent economists. The median forecast of 71 economists surveyed by Bloomberg last month projected 6.6% GDP growth this year, 4.1% next year and 2.4% in 2023. “The U.S. and California pandemic recovery is expected to be as exceptional as the pandemic recession was dire,” said Scott Anderson, chief economist at Bank of the West in San Francisco. The UCLA Anderson School of Business forecast reports similar upside growth in our economy. California’s strong technology and white-collar business sectors, along with a relatively rapid boost in home building, will buoy California’s economy, offsetting a slower return of tourist-dependent leisure and hospitality jobs, according to the UCLA Anderson quarterly forecast. In the nation and in California, “We are about to have one of the best years of economic growth that we’ve had since World War II,” said Leo Feler, the UCLA Anderson Forecast’s senior economist. “We’re looking at a boom time for the U.S. economy.” Economic growth was impressive in the first quarter of 2021, but we can anticipate for a higher pace in 2nd and 3rd quarters as mass vaccinations continue and business restrictions are reduced or eliminated. Real GDP will reach its 2019 peak by the end of this quarter (2021 Q2) and be back to its prior (2019) trend by 2022 Q1. However, through April 2021, the recovery is geographically uneven across California, with inland counties reinstating their workforces faster than coastal counties or the Bay Area. Some of these inland counties will recover all of their pandemic losses by year’s end. Take a look at this graph provided by the California Forecast Report.
Counties benefitting largely from tourism – Santa Cruz, Monterey, Orange, Los Angeles, San Francisco, Sonoma, and Napa are dead last in March 2021 job growth, year over year, among all counties in California. Regarding the labor market recovery from the pandemic job loss, the inland counties are clearly dominating the coastal economies. One of the reasons cited was the abundance of warehouses of big online retailers — think Amazon — where during the pandemic online consumer purchasing power was at an all-time high. Now, back to the mask-wearing issues. What to expect this summer: Beyond the Blueprint On June 15, all industry and business sectors listed in the current Blueprint Activities and business Tiers Chart may return to usual operations with no capacity limits or physical distancing requirements*, with limited exceptions for mega events. Exceptions include schools, healthcare settings and some other public settings Mega Events (sporting events, concerts, etc.):
https://www.cdph.ca.gov/Programs/OPA/Pages/Communications-Toolkits/California-After-June-15.aspx Revised Cal/OSHA Emergency Temporary Standards Awaiting approval by state Office of Administrative Law. In effect by June 15.
As we move into the peak summer months and try to comply with the above “Beyond the Blueprint” guidelines, we hopefully will see an economic uptick in the coastal tourist-based economic regions of the state. The challenge for Santa Cruz and Monterey County restaurants, retail stores and the hospitality sector: Can they find employees? Some restaurant owners have set up incentive bonus pay options to encourage potential hires to join their organization.