Business
Why stubborn inflation is especially painful for California consumers
A small uptick in the nationwide inflation rate last month was an unwelcome glitch for many consumers and for Washington policymakers, but it may be a more serious development for most of California.
The December increase, at 3.4% over the price level a year earlier, could make it harder for the Federal Reserve to begin cutting interest rates in spring, as many analysts have predicted. It was also bad political news for President Biden, who has presided over a sharp drop in inflation but has yet to get credit for it among voters.
But even the small uptick in inflation will have more notable consequences in California because price levels for goods and services, including energy and housing, are already so much higher than almost anywhere else in the country.
Apart from Hawaii, many studies rank California as first or second among the states with the highest cost of living, between 35% and 45% above the national average.
What that means as a practical matter is that a household in Los Angeles with $100,000 income could maintain the same standard of living while earning $69,000 in Dallas and $65,000 in Las Vegas, according to Bankrate.com.
The high cost of living is a prime factor in the ongoing exodus of many Californians, and also may help explain the relatively lackluster mood of people in the state. Consumer confidence in the U.S. has picked up, but California remains below the national average and significantly trails other big states including Texas, Florida, New York and Pennsylvania, according to the Conference Board.
Excluding the 2020 pandemic year, Californians’ consumer sentiment hadn’t been so down for a December since 2014. The Conference Board surveys both people’s current condition and their expectations, and California consumers have a very low appraisal of what the next six months will bring, just as the country as a whole.
“They feel quite beaten up. Part of it is inflation,” said David Tinsley, a senior economist at the Bank of America Institute.
Thursday’s inflation report from the Bureau of Labor Statistics showed that the consumer price index in December increased 0.3% from November, higher than analysts had expected. The increase damped some investors’ hopes for an imminent interest rate cut, which would ease borrowing costs for businesses and households, potentially strengthening the overall economic outlook.
BLS data showed consumer prices in the Los Angeles area in December rose 3.5% from a year earlier, a bit higher than the national average for all urban consumers. The year-over-year inflation rate for the Bay Area in December was 2.6%.
Inflation in the U.S. had been coming down fairly quickly since peaking at 9.1% in June 2022 as key pandemic-induced effects that contributed to the price surge abated. Those included supply chain disruptions and a jump in stay-at-home-spending that outran inventory.
Inflation for staple goods such as groceries and clothing is now running below the Fed’s preferred overall inflation target of 2% — and some things including appliances and electronics are seeing outright declines in prices. Eggs, for example, cost 23% less than a year ago, but prices are still higher than in 2019 and could rise again.
A new bout of avian flu has hurt California poultry farms and is “just adding to the uncertainty about supply and therefore prices,” said Ricky Volpe, an agribusiness professor at Cal Poly San Luis Obispo.
In recent months airline fares and prices for hotel rooms and rental cars also have come down, signs that consumers may be pulling back after a flurry of catch-up travel and other spending as the economy reopened from COVID. Flagging demand may also have prompted some big companies to back off price hikes that originated with attempts to recoup profits lost during the pandemic.
Still, economists said services inflation may remain stubborn. The cost of shelter was up 6.2% in December from a year ago. Hospital services increased 5.5%. And transportation services rose 7.1%, thanks to soaring auto insurance premiums, which analysts say is due partly to more vehicles on the road and increased car thefts.
California consumers may be feeling relatively less relief because prices for housing, energy and services such as entertainment, dining out and personal care tend to be so much higher than in most other places.
Gasoline prices, for example, have fallen by about $2 a gallon on average across the country as well as in California since their peak in June 2022, according to the American Automobile Assn., but the disparity remains painfully obvious for consumers.
As of Thursday, regular gas cost $3.08 a gallon nationally but $4.62 in California.
High as gas prices are, the single biggest factor in the widening gap in cost of living between California and most other states is housing. Whereas consumers’ costs for food and health services in California are just slightly more than in most other states, housing costs were about double the national average, based on data from the Council for Community & Economic Research.
According to Zillow, the median rent for housing of all kinds in California was $2,750, about 38%, or $1,700, more than for the nation. The median sale price for an existing single-family house in the U.S. in November was $392,100, according to the National Assn. of Realtors. For California: $822,000.
Average rents and home purchase prices across the country have been trending slightly down in recent months, but the difference in what one can buy or rent in California versus elsewhere has been hard for many people to ignore.
Those feelings can also drive movement. Studies by the Census Bureau show that by far the No. 1 reason people move is related to housing, with many wanting a better or cheaper place, or their own home.
“They’re not buying those consumer goods where there is deflation. They’re seeing the increase in the cost of rents and that’s what they’re feeling,” said Joseph Brusuelas, chief economist at RSM US, the accounting firm.
Most economists expect inflation to head downward this year closer to 2.5%, albeit with bumps along the way. Whether people will feel commensurately better about the economy is another matter.
“Consumers tend to anchor their view on the economy around a select number of prices,” Brusuelas said, noting that in Southern California that’s gasoline and housing. “In an area where real estate development is badly constrained, you’re going to have a very different perception of the economy and relative standards of living.”
Business
Video: Why Your Paycheck Feels Smaller
new video loaded: Why Your Paycheck Feels Smaller
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April 18, 2026
Business
Civil case against Alec Baldwin, ‘Rust’ movie producers advances toward a trial
Nearly two years after actor Alec Baldwin was cleared of criminal charges in the “Rust” movie shooting death, a long simmering civil negligence case is inching toward a trial this fall.
On Friday, a Los Angeles Superior Court judge denied a summary judgment motion requested by the film producers Rust Movie Productions LLC, as well as actor-producer Baldwin and his firm El Dorado Pictures to dismiss the case.
During a hearing, Superior Court Judge Maurice Leiter set an Oct. 12 trial date.
The negligence suit was brought more than four years ago by Serge Svetnoy, who served as the chief lighting technician on the problem-plagued western film. Svetnoy was close friends with cinematographer Halyna Hutchins and held her in his arms as she lay dying on the floor of the New Mexico movie set. Baldwin’s firearm had discharged, launching a .45 caliber bullet, which struck and killed her.
The Bonanza Creek Ranch in Santa Fe, N.M. in 2021.
(Jae C. Hong / Associated Press)
Svetnoy was the first crew member of the ill-fated western to bring a lawsuit against the producers, alleging they were negligent in Hutchins’ October 2021 death. He maintains he has suffered trauma in the years since. In addition to negligence, his lawsuit also accuses the producers of intentional infliction of emotional distress.
Prosecutors dropped criminal charges against Baldwin, who has long maintained he was not responsible for Hutchins’ death.
“We are pleased with the Court’s decision denying the motions for summary judgment filed by Rust Movie Productions and Mr. Baldwin,” lawyers Gary Dordick and John Upton, who represent Svetnoy, said in a statement following the hearing. “He looks forward to finally having his day in court on this long-pending matter.”
The judge denied the defendants’ request to dismiss the negligence, emotional distress and punitive damages claims. One count directed at Baldwin, alleging assault, was dropped.
Svetnoy has said the bullet whizzed past his head and “narrowly missed him,” according to the gaffer’s suit.
Attorneys representing Baldwin and the producers were not immediately available for comment.
Svetnoy and Hutchins had been friends for more than five years and worked together on nine film productions. Both were immigrants from Ukraine, and they spent holidays together with their families.
On Oct. 21, 2021, he was helping prepare for an afternoon of filming in a wooden church on Bonanza Creek Ranch. Hutchins was conversing with Baldwin to set up a camera angle that Hutchins wanted to depict: a close-up image of the barrel of Baldwin’s revolver.
The day had been chaotic because Hutchins’ union camera crew had walked off the set to protest the lack of nearby housing and previous alleged safety violations with the firearms on the set.
Instead of postponing filming to resolve the labor dispute, producers pushed forward, crew members alleged.
New Mexico prosecutors prevailed in a criminal case against the armorer, Hannah Gutierrez, in March 2024. She served more than a year in a state women’s prison for her involuntary manslaughter conviction before being released last year.
Baldwin faced a similar charge, but the case against him unraveled spectacularly.
On the second day of his July 2024 trial, his criminal defense attorneys — Luke Nikas and Alex Spiro — presented evidence that prosecutors and sheriff’s deputies withheld evidence that may have helped his defense . The judge was furious, setting Baldwin free.
Variety first reported on Friday’s court action.
Business
California’s gas prices push Uber and Lyft drivers off the road
The highest gas prices in the country are making it tougher for some gig drivers to make a living.
Gas prices have shot up amid the war in the Middle East. On average, California gas prices are the most expensive in the United States, according to data from the American Automobile Assn. The average price of regular gas in California is almost $6. The national average is a little above $4.
While Uber and Lyft drivers have concocted clever ways to cut gas consumption, they say that without some relief they will be forced to leave the ride-hailing business.
John Mejia was already struggling to make money as a part-time Lyft driver when soaring gas prices made his side hustle even harder.
“Unfortunately, it’s the economics of paying less to drivers and gas prices,” he said. “It actually is pulling people out of the business.”
Guests at The Westin St. Francis hotel get into an Uber.
(Jess Lynn Goss / For The Times)
Gig work offers drivers the freedom to work for themselves and more flexibility, but being independent contractors also means they must shoulder unexpected costs.
Ride-sharing companies say they’re trying to help, but drivers say the gas relief comes with caveats. For now, drivers say they’re being pickier about what rides they accept, cutting hours and are looking at other ways to make money.
Mejia, who started driving for Lyft more than a decade ago, said in his early days, he would sometimes make $400 in three hours. Now it takes 12 hours to rake in $200.
The San Francisco Bay Area consultant is an active member of the California Gig Workers Union, so he knows he isn’t alone. California has more than 800,000 gig rideshare drivers, according to the group, which is affiliated with the Service Employees International Union.
On social media sites such as Reddit and Facebook, gig workers have posted about how the higher gas prices are eating into their earnings. Among the tricks they are suggesting: reducing the number of times the ignition is turned on or off, avoiding traffic, working in specific neighborhoods and at times with high demand and switching to electric vehicles.
Gig drivers usually have only seconds to decide whether to accept a ride on the app, but they have become more strategic about which rides and deliveries they accept.
That means they are more likely to sit back in their cars and wait for higher fares for quick pick-up and drop-off.
“I highly recommend the ‘decline and recline’ strategy, rejecting unprofitable rides until a better one appears,” wrote Sergio Avedian, a driver, in the popular blog the Rideshare Guy.
Pedestrians cross the street in front of a Lyft and Uber driver on Wednesday. High gas prices have made it hard for gig drivers to make a living, cutting into their profits.
(Jess Lynn Goss / For The Times)
Uber, Lyft and other companies have unveiled several ways to help drivers save on gas.
Uber said drivers can get up to 15% cash back through May 26 with the Uber Pro card, a business debit Mastercard for drivers and couriers. Based on a worker’s tier, they can get up to $1 off per gallon of gas through Upside — an app that offers cash rewards — and up to 21 cents off per gallon of gas with Shell Fuel Rewards. The company also offers incentives for drivers who want to switch to electric vehicles.
“We know the price of gas is top of mind for many rideshare and delivery drivers across the country right now,” Uber said in a blog post about its gas savings efforts.
Lyft also said it’s expanding gas relief through May 26 because the company knows that the extra cost “hits hardest for drivers who depend on driving for their income.”
The company is offering more cash back, depending on the driver’s tier, for drivers who use a Lyft Direct business debit card to pay for gas at eligible gas stations. They can get an additional 14 cents per gallon off through Upside.
Drivers say the fine print on the offers dictates which card they use and where they fill up gas, making it difficult for them to save money.
“If I do the math, it’s ridiculous,” Mejia said. “They’re offering us nothing.”
Uber declined to comment, but pointed to its blog post about the gas relief efforts. Lyft also referenced the blog post and said “the gas savings were structured through rewards to maximize stackable opportunities.”
Guests at The Westin St. Francis hotel get into an Uber.
(Jess Lynn Goss / For The Times)
Gig workers have struggled with rising gas prices in the past.
In 2022, Lyft and Uber temporarily added a surcharge to their fares amid record-high gas prices following Russia’s invasion of Ukraine. This year, Uber is adding a fuel charge to its fares in Australia for roughly two months to offset the high cost of gas for drivers. Lyft said it hasn’t added a fuel charge in the U.S. or elsewhere.
Margarita Penalosa, who drives full time for Uber and Lyft in Los Angeles, started as a rideshare driver in 2017. Back then, gas was cheaper. She would easily hit her goal of making $300 in eight hours. Now she’s making just $250 after working as much as 14 hours.
Gas prices, she said, used to be less than $3 per gallon. Now some gas stations are charging more than $8 per gallon.
“Take out the gas. Take out the mileage from my car and maintenance. How much [do] I really make? Probably I get $11 for an hour,” she said.
Jonathan Tipton Meyers wants to spend fewer hours as a rideshare driver.
He already juggles multiple gigs even while driving for Uber and Lyft in Los Angeles. He’s a mobile notary and loan signing agent, a writer and performer.
Driving is “a very challenging, full-time job,” he said. “It’s very taxing and, of course, wages were just continually decreasing.”
John Mejia, a longtime Lyft and Uber driver, poses for a portrait before attending a meeting about unionizing gig drivers.
(Jess Lynn Goss / For The Times)
Even if oil continues to flow through the Strait of Hormuz, which Iran reopened Friday, it could take a while for gas prices to come down to earth, said Mark Zandi, the chief economist at Moody’s Analytics.
“There’s an old adage that prices rise like a rocket and fall like a feather,” he said. “I think that’ll apply.”
In the meantime, it will be survival of the fittest drivers. If enough of them decide to leave the apps, the ride-hailing companies could be forced to raise fares further to attract some back.
“Those who approach rideshare driving strategically, tracking expenses, choosing trips carefully, and optimizing efficiency are far more likely to weather periods of high gas prices,” wrote Avedian in the Rideshare Guy blog. “For everyone else, a spike at the pump can quickly turn rideshare driving from a side hustle into a money-losing venture.”
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