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Why stubborn inflation is especially painful for California consumers

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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.

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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%.

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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.

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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.

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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.”

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Want an AI-proof job? New research says you may be safer at companies embracing the technology

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Want an AI-proof job? New research says you may be safer at companies embracing the technology

While AI is often cited as one of the reasons for mass layoffs, particularly in the tech sector, for fast-growing companies it also seems to be creating new jobs in many companies, according to a study published Tuesday from financial services company Ramp and employment database Revelio Labs.

“Our early result is that it looks like firms are starting to look for more entry-level hires, likely people who are more AI native,” said Ara Kharazian, the lead economist at Ramp, a financial services company that found a rise in early-career hiring by companies in the period they started spending heavily on AI.

The study tracked AI spending and the workforce records of nearly 22,000 U.S. companies between January 2021 and February 2026.

It found that firms that spent more on AI ended up increasing their workforce headcount by an average of 10% over the two years after rolling out the technology. Companies that made the largest AI investment expanded entry-level job hiring by 12%.

“If you are a job seeker, or you are graduating from college, and you’re choosing between two different firms that are otherwise similar, I would choose the one that’s using AI,” Kharazian said. “Our paper shows that that firm is going to grow faster.”

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The early and intense AI adopters spent more than $100 per month per employee on AI and had their employees using advanced AI, such as coding subscriptions, as opposed to simple ChatGPT subscriptions.

The low-intensity, casual AI adopters didn’t see any hiring gains and reduced headcount.

The Ramp study showed a positive effect on employment from AI because it focused on firms adopting AI, many of them fast-growing, venture-backed companies hiring AI-native junior employees.

It reached a different conclusion than a November 2025 Stanford University study, which examined payroll data across the entire labor market and found that employment among young software developers had declined by nearly 20% from its late-2022 peak.

The two findings can both be true, Kharazian said, because the Stanford study was broader and didn’t focus just on the firms that use AI.

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“While there may be overall weak hiring for young people, what we found is that hiring is actually strong at the firms that use AI, and the firms that use AI intensely,” he said.

In another recent study on the impact of AI on jobs, the California AI-unemployment tracker examined the state across industries, education levels and region and highlighted some worrying trends.

It seemed to disprove the understanding that AI has been hurting mostly younger employees and those in entry-level jobs.

It found that unemployment insurance claims among college-educated workers in high-AI-exposed jobs, such as customer service and software development, increased after ChatGPT’s release in 2022 and remained elevated through May 2026.

Unemployment insurance claims among master’s and PhD holders in highly AI-exposed occupations have also risen, moving from a baseline average of 13,000 claims per month in November 2022 to between 16,000 and 22,000 claims per month since mid-2023, the study found.

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The study also categorized unemployment claims by age and found that a significant portion of claims were from those aged 36 to 65, signaling that AI’s effect doesn’t only affect early-career jobs.

It also found a higher rate of insurance claims in the San Francisco Bay Area compared with the rest of California, and that job loss claims were concentrated in the technology sector.

In 2026, tech companies have let go of more than 160,000 workers, according to trueup.io, a website tracking industry layoffs.

Many companies have said AI was one of the main reasons for layoffs. Meta, Oracle, Microsoft and other big tech companies have laid off tens of thousands of employees, while simultaneously investing billions in AI data centers.

Ramp’s findings that heavy AI adoption can lead to increased hiring suggests that some of the companies announcing large layoffs may be guilty of blaming regular cost cutting on AI, a practice dubbed “AI washing.”

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“When you hear CEOs talk about layoffs and they attribute it to AI, I would be skeptical,” Kharazian said.

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Commentary: It’s not just vaccines — from infancy to adolescence, Republicans are waging war on children’s health

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Commentary: It’s not just vaccines — from infancy to adolescence, Republicans are waging war on children’s health

The conservative assault on child health starts with the anti-vaccine campaign and proceeds to cutbacks in nutrition assistance and narrowed access to healthcare.

In the old days, before accepted medical protocols came under partisan assault, infants typically received a vitamin K shot to enhance blood-clotting capability and a few drops of an antibiotic to stave off eye infections before leaving the hospital, followed by a thorough round of vaccines against life-threatening diseases.

Americans assumed that “whatever a family could afford, the country had already decided this child was worth protecting,” Robert B. Shpiner, a critical care expert at UCLA medical school, wrote recently. “I have seen children harmed by disease, poverty, by bad luck. I had not, until now, seen them harmed so methodically by their own government.”

Shpiner’s targets were the changes in healthcare policies instituted by the Trump administration generally and Health and Human Services Secretary Robert F. Kennedy Jr., as well as the mistrust in medical authority that Kennedy and his followers have helped to foment.

We’re going to be paying this bill for years to come, because the lack of proper nutrition has profound effects on learning and disability.

— Robert B. Shpiner, UCLA

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As Shpiner wrote in the Guardian, the administration’s assault on child health begins with its anti-vaccination policies. In January, Kennedy’s agency reduced the list of recommended childhood immunizations to 11 from 17, removing shots for COVID-19, hepatitis and meningitis, among other diseases. The agency made the changes without the customary professional consultations, KFF has reported.

But that’s only the tip of the iceberg. “It’s just one thing after another,” Shpiner told me.

What triggered him into writing his Guardian essay, he says, was learning that congressional Republicans had advanced an agriculture appropriations bill that would cut the fruit and vegetable benefit for children in WIC, the supplemental nutritional program for women, infants and children to $10 a month from $26.

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“That got me to looking at this as a sequence,” he says, starting with the reduction of child immunizations, followed by the proposed cuts in WIC and the cuts in food stamps enacted as part of the Republican budget bill that Trump signed one year ago Saturday (i.e., the Fourth of July, 2025).

“The image of us taking food away from kids and not giving them enough money to buy some apples and berries—the short-term response is outrage,” he says, “but the medium- and long-term effect is that we’re going to be paying this bill for years to come, because the lack of proper nutrition has profound effects on learning, and disability and anemia. A number of measures of health and success match with nutrition.”

At almost every stage of childhood development, he notes, programs aimed at preserving or enhancing children’s health have gone on the chopping block.

“A vaccine rule one week, a food program the next,” he wrote. “Each change arrives wrapped in a reasonable rationale: fiscal discipline, local control, parental choice. But arrange them in the order a child actually grows, and the rationales stop mattering.”

Judging from their rhetoric, one would think that Republicans would move heaven and earth to foster child immunizations, nutritional assistance and access to medical care.

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In “Communion,” his recent book about his conversion to Catholicism, for example, Vice President JD Vance writes: “We want more children in our society because children are profoundly good — the greatest value add we can create.”

Yet the programmatic cutbacks advocated for and implemented by the Republican Congress and Trump give the lie to that sentiment. Let’s examine chapter and verse.

Measles is the canary in the coal mine for vaccination and public health, and at this moment, the canary is singing a doleful tune. The Centers for Disease Control and Prevention count 2,134 cases in the U.S. as of June 25. That’s poised to exceed the 2,288 cases in all of 2025, which was the worst outbreak since 1991.

There’s no question why this is happening. It’s because of a decline in measles vaccinations below the 95% generally considered to provide “herd immunity,” in which the disease is so rare that even unvaccinated individuals are protected from exposure.

Kennedy may not deserve all the blame for the immunization decline, but as pseudoscience debunker Steven Novella has pointed out, as secretary he has “done everything possible to undermine vaccine science and confidence in health institutions.”

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Kennedy has paid lip service to the value of the MMR vaccine, which combines immunizations for measles, mumps and rubella. But he has claimed without evidence that the vaccine causes deaths “every year” and that the vaccine hasn’t been safety-tested, which isn’t so. He has asserted that it shouldn’t be subject to a government mandate. He also has promoted treatments for measles that aren’t known to be effective.

(The Department of Health and Human Services didn’t respond to my request for comment on the vaccine initiatives.)

As children grow, the crisis of malnutrition kicks in. The House GOP’s cuts to WIC are still only on the drawing board. But the Republican budget bill incorporated cuts to food stamps — the Supplemental Nutrition Assistance Program, or SNAP — that have driven some 4 million people off the program. In 13 states that have published data, according to the Center on Budget and Policy Priorities, child enrollment fell by more than 800,000, or 16%, between July 2025 and May of this year.

“This is where the nutrition cuts become a medical, not merely a moral, story,” Shpiner says. “Iron-deficiency anemia in infancy is associated with poorer cognitive, motor, and behavioral outcomes that persist more than 10 years after the deficiency itself has been corrected — the deficit does not fully reverse even with later treatment. Withdrawing produce and protein from WIC and SNAP at the peak window of brain growth is not a budget line that resets the following year; it is a developmental exposure with a long tail.”

The combination of reduced immunization and poor nutrition build on each other. “Unvaccinated kids are going to get sicker,” he told me. “If they’re malnourished, they’re going to get sicker. If their parents don’t get affordable care, they’re going to be strapped. It becomes a synergistic and multiplicative cascade.”

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Indeed, the administration’s assault on Medicaid and the Affordable Care Act intensifies the damage. Enrollment in Medicaid and the Children’s Health Insurance Program, which is part of Medicaid, fell by 4.8 million people, or 6%, from March 2025 through March 2026, according to government data. The enrollment decline for children alone came to more than 1.9 million, or 5%.

White House spokesperson Kush Desai challenged the latter figure when I asked for comment. But it came from KFF, which sourced it to the government’s Centers for Medicare and Medicaid Services, or CMS.

“Nothing has been done to alter insurance or Medicaid coverage of any vaccination,” Desai told me by email, “and parents are encouraged to seek out the counsel of their pediatrician to make the best decisions for their children.”

The prospects are for further declines. That’s because new work requirements for enrollees in Medicaid expansion under the Affordable Care Act are almost certain to drive enrollment down, due to obstacles including paperwork burdens and administrative snafus, resulting in even some eligible enrollees losing their coverage.

(These problems became so pronounced in Arkansas, which implemented work requirements during the first Trump term, that a federal judge axed the program.)

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The work rules enacted last year as part of the Republican budget bill aren’t scheduled to start until Jan. 1, but three states are starting early — Nebraska (May 1), Montana (Wednesday) and Iowa (Dec. 1). The impact on enrollment isn’t yet clear.

Whatever the effect of these changes, the public is going to know less about them than before. The reason is that the administration has shrunk the requirements for reports of immunization from states, changing the reports from mandated to voluntary. The affected data include childhood immunization rates against diphtheria, tetanus, pertussis, polio, measles, mumps and rubella, hepatitis, chicken pox and flu; and rates for 13 year olds and expectant mothers.

“While seemingly a small, technical change, the removal of vaccine reporting in Medicaid and CHIP may make it more difficult to monitor and understand vaccination trends for a large share of children in the U.S.,” KFF noted.

I asked the Department of Health and Human Services to explain the rationale for these changes, and specifically whether they were aimed at obscuring the effect of the narrowing of vaccine recommendations, but didn’t hear back.

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How the FIFA World Cup is providing a boost for L.A. businesses

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How the FIFA World Cup is providing a boost for L.A. businesses

Johnny Beig may have played in a semi professional cricket league in Australia, but this summer he’s a big fan of soccer in the United States.

It’s not just because he’s rooting for the World Cup team, though.

FIFA emblems are featured on jerseys that were created by the Dioz Group and distributed for all employees at the 16 FIFA World Cup venues this summer.

(Genaro Molina / Los Angeles Times)

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Last year, Beig’s Beverly Hills-based company, Dioz Group, won a $2.5 million contract with On Location, FIFA’s hospitality partner, to design, manufacture and distribute uniforms for all employees working at FIFA World Cup venues this summer.

These include the people welcoming attendees into stadiums, VIP lounge chefs, waiters and the flagbearers during the opening ceremony.

After a multi-step application process, including presentations of its planning and strategy, Dioz says it produced more than 50,000 clothing garments including suits, jackets, shirts and hats and delivered them to the 16 World Cup venues around the U.S., Canada and Mexico in June.

Thanks in part to the World Cup contract, the company’s revenue has reached $15 million so far this year, compared with $20 million last year, Beig said. He declined to disclose the company’s net income but said the business was profitable.

“We are working with larger names that we would have never imagined we would,” he said. “The FIFA World Cup is the pinnacle. Working with the largest sporting event in the world is what we’re very proud of. I don’t think it gets any bigger than that.”

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Volunteers line up to prepare to display the Canadian Flag before a World Cup game.

Volunteers line up to prepare to display the Canadian flag before a World Cup round of 32 knock-out match between Canada and South Africa at SoFi Stadium on Sunday.

(Kelvin Kuo / Los Angeles Times)

Dioz is among the many small businesses across Los Angeles that are getting a boost from the global sporting event, said Kevin Klowden, a senior fellow at the Milken Institute.

The influx of hundreds of thousands of fans into the city has been a boon to hotels, transportation services and restaurants, in addition to those in the special events and logistics economy, Klowden said, calling the event the “equivalent of multiple Super Bowls.”

“The number of contracts that are there, it’s a big deal,” he said. “Given the fact that L.A.’s filming is only slowly recovering, having something like the World Cup is definitely a boost.”

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Dioz was co-founded by Johnny, 44, and his brother Tony in 2006. The brothers were born in India and raised in Australia, where Johnny enjoyed a brief career as a semi professional cricket player.

He realized his future wasn’t as a professional athlete, but he wanted to stay connected to the sports world, so he began making uniforms for his cricket team in 2006.

He then got a referral to make uniforms for multiple teams in the area before starting an apparel company.

“I wanted to stick with something I was passionate about, which is sports,” he said.

Volunteers unravel the center field display.

Volunteers unravel the center field display before a World Cup round of 32 knock-out match between Canada and South Africa at SoFi Stadium on Sunday.

(Ronaldo Bolanos / Los Angeles Times)

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In 2012, Beig moved to Los Angeles and established Dioz‘s Los Angeles headquarters to tap into the U.S. market. During the pandemic, the company started supplying medical apparel to hospitals and schools, and the business took off, with revenue doubling in 2020, Beig said.

Dioz now has over 150 employees, including 15 in L.A., and manufactures its apparel at factories in China, India, Bangladesh, Turkey and the Philippines. Tony runs an office in Dubai.

Before the World Cup, Dioz provided employee uniforms for events including Super Bowl LIX and Copa America, which may have given it a leg up on the FIFA contact.

Now, with a World Cup contract on their resume, Beig said he’s setting his sights on even bigger events.

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“This gives us an edge over the next FIFA events worldwide as well, where we can showcase our skills and we can handle it,” Beig said. “So it gives us a good opportunity to work with sporting events like the UEFA Championship and Premier League.”

As companies get new business from the World Cup, Klowden said it’s important that they leverage their new position to continue that growth.

Companies that benefited from the World Cup might be in a position to bid on even bigger contracts, especially with the Olympics coming up in 2028, Klowden said.

“The really important part in any of these deals is that if a company ran something like this, then they are able to build off of that success,” Klowden said. “Let’s say you’re a company that did a big uniform order or a big food order, and the World Cup goes, and you invested in new manufacturing capacity, or you invested in new clothing machines, or whatever you do; suddenly you don’t have that market anymore, then you’ve just wasted all that money ramping up.”

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