California’s recovery from the coronavirus will take ‘longer than people think,’ Gov. Gavin Newsom says

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Gavin Newsom, governor of California, speaks during a news conference in Sacramento, California, on Tuesday, April 14, 2020.

Rich Pedroncelli | AP | Bloomberg via Getty Images

California’s economic rebound from the coronavirus may take longer than people may think as the state struggles with record “Depression-era” unemployment numbers, Gov. Gavin Newsom said on Wednesday. 

“It’s going to take longer than I think a lot of people think. It’s going to take a lot longer than people are saying. This is serious, we’ve never experienced anything like this in our lifetime,” Newsom said in response to a question regarding how long it will take for California to rebound from Covid-19.

Newsom said that in January, California had record low unemployment and reserves in its budget. However, the state’s upcoming budget is now facing holes that will fall “tens of billions of dollars” short of where it needs to be. 

He said that his economic advisors, including Former Federal Reserve Chair Janet Yellenhave warned him that the state will likely not see a “V-shaped” recovery, or a quick rise, after the Covid-19 crisis ends and its economy reopens. 

More than 3.7 million people have filed for unemployment since the beginning of March, according to U.S. Department of Labor. For weeks the state has led the nation in the number of workers filing for unemployment benefits.

California issued the first statewide stay-at-home order on March 19, closing all dine-in restaurants, bars and clubs, gyms and fitness studios. 

“The next few years we’re going to have to work through these challenges, but we’ll work through them and we’ll get out the other side,” Newsom said. “But we have our work cut out for us as does the rest of the country.”

On Monday, California became the first state to borrow money from the federal government so it can continue paying out rising claims for unemployment benefits, as first reported by The Wall Street Journal. The state borrowed $348 million in federal funds after receiving approval to tap up to $10 billion through the end of July, a Treasury Department spokesman told the Journal. 

“This is depression-era numbers in terms of the unemployment you’ll see across this country, not just in the state of California,” he said. “These numbers are jaw-dropping and it is alarming”

The state will begin moving into “phase two” of its economic recovery by the end of this week after Newsom announced on Monday that some retail businesses could begin reopening with modifications by the end of this week if certain criteria are met.

He said retailers of such items as clothing, books, music, toys and sporting goods, as well as florists, would be allowed to offer curbside pickup services if they institute guidelines. The state plans to issue further guidance Thursday on the state’s next phase of reopening, which will include specific guidelines that low-risk businesses must meet in order to reopen. 

Newsom said the state would also allow some counties to begin easing social distancing restrictions even further if they can prove they have the ability to institute proper sanitation practices, ensure adequate testing and tracing and provide security to those who are most vulnerable, including the homeless community, older citizens and the incarcerated.

On Wednesday, Newsom said the state has increased coronavirus testing from 2,000 tests a day to 25,000 to 30,000 a day in the past month. The state launched a new website on Wednesday that residents can use to identify testing sites across the state. 

The coronavirus has now infected more than 58,800 people in the state. There were more than 2,600 confirmed cases of Covid-19 on Tuesday, a 4.6% increase. 

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