All Signs Point to Continued Job Growth in California
Fueled by the state’s economic growth, California’s unemployment rate is expected to steadily decline to 4.9% by the end of 2017, according to a December forecast by UCLA economists at the Anderson School of Management.
In preparing the forecast, senior economist Jerry Nickelsburg analyzed the state’s recent economic data, including trade through California’s ports, international arrivals at LAX and SFO, state government finances, residential construction and employment.
He noted that port activity in September was at a historic high and international passenger arrivals at LAX and SFO reached record numbers over the past year. Sales tax also ticked up slightly, but is still below pre-recession levels, Jerry said. Meanwhile, residential construction is still on the upswing, and California job gains are impressive, according to LA Biz.
According to the California Employment Development Department, the state gained 463,000 jobs October 2014 to October 2015—up 2.9%. The UCLA report forecasts a total of 2.6% job growth in 2015, then a tapering to 2.1% in 2016 and 1.4% in 2017.
Anderson School economist David Shulman also predicted the Fed will begin normalizing interest rates this month, ending its “zero interest policy,” because there is near full employment and the financial crisis is long over. “Nevertheless,” Shulman wrote, “employment remains healthy, with the economy generating jobs at a 200,000-a-month clip that will bring with it further declines in the unemployment rate to 4.6%.”
Ongoing job growth and expected wage increases will drive consumer spending in 2016, leading to the first 3% growth in GDP since 2005 and pushing inflation above 2%. However, housing and commercial construction, along with a boom in the automobile industry, will be sources of economic strength. [BIZ]