California economic outlook brightens a bit
The economic outlook for California has perked up and the state should escape double-digit jobless levels more quickly than previously thought, researchers said Wednesday.
“Things look slightly better,” said Jerry Nickelsburg, a senior economist with the UCLA Anderson Forecast, which released its quarterly outlook.
California is expected to suffer a 10.8 percent average jobless rate this year, but that should improve to an average of 9.8 percent next year.
That outlook is brighter than the group’s previous view. In December, the Anderson Forecast predicted a 10.5 percent unemployment rate for 2013.
“We are seeing improvement in the labor markets,” Nickelsburg said.
What’s more, job growth should steadily improve in the coming years, the researchers predicted.
The number of payroll jobs in California increased 1.2 percent last year, according to the Employment Development Department.
The Anderson Forecast said that pattern of job growth should continue, with statewide payroll increases of 1.3 percent this year, 1.9 percent next year and 2.5 percent in 2014, the economists said.
“Things do look like they are going to be a little better in California, given the recent sharp drop in the state’s unemployment rate,” said Jeffrey Michael, director of the Stockton-based Business Forecasting Center at University of the Pacific.
The nationwide job market is also on the upswing. But growth in the United States
still doesn’t look that great, according to a report for the Anderson Forecast that was prepared by senior economist David Shulman.
“We are growing, but curb your enthusiasm,” Shulman said.
The economy added an average of 250,000 jobs in the first two months of this year. That would work out to a rate of 3 million jobs a year. But Shulman said he doesn’t think that kind of growth can be sustained.
Instead, the nation is more likely to add 160,000 to 200,000 jobs a month on average, he said. That would equate to an annual pace of 1.2 million to 2.4 million jobs.
The strong job growth in January and February was boosted by mild weather around the country, Shulman said.
“There was more construction, more outdoor work, people went to restaurants and the mall,” he added.
The rebound in California is being led by industries that are strong in the Bay Area.
“Tech industries, professional, scientific and technical services, health care, computers and electronics — those are all doing very well,” Nickelsburg said.
More recently, improvements have begun to surface in some industries that have lagged. Retail, along with leisure and hospitality, are rebounding, Nickelsburg said.
The Bay Area is likely to remain in the vanguard of the recovery for California, analysts said.
“The Bay Area has definitely been leading the rebound for the last six months or so,” said Michael, the UOP economist. “We think the Bay Area will continue to outpace the rest of the state in job gains.”
During the one-year period that ended in February, job totals in the Bay Area grew 1.9 percent, more than double the pace of statewide job growth of 0.9 percent.
“The rebound started in Silicon Valley and now the improvement is spreading throughout the Bay Area,” Michael said.