California will see steady gains in employment and personal income through 2017, as the overall U.S. economy remains an island in a troubled world, UCLA economists said Thursday.
“The increase in U.S. growth rates from construction, automobiles, and business investment, as well as higher consumer demand, will continue to fuel our local economy,” said Senior Economist Jerry Nickelsburg, author of the California report for the widely-followed UCLA Anderson Forecast.
Nickelsburg said the unemployment rate will hover around 6.5 percent through the rest of 2015, fall to 5.5 percent in 2016 and drop further to 5.1 percent in 2017. The rate in San Diego is already lower, at 5.8 percent in January.
“California’s employment, even after adjusting for the impact of the slowdown/shutdown at the ports, should continue to grow faster than the U.S.,” he said.
Real personal income growth in California is estimated to be 4.2 percent in 2015, 4.6 percent in 2016 and 3.7 percent in 2017.
The economists were cautious about the outlook for housing, saying recent data suggests a possible lowering of demand that might portend a downturn in the market. On the other hand, increasing requests for permits for new construction suggests otherwise.
Nickelsburg said the recent work slowdown at West Coast ports had a “relatively small” impact, but there are longer term concerns about shippers moving to East Coast ports.
UCLA economists said the United States “looks like an island of stability in a very volatile world.” They said the country is on track for 3 percent GDP growth for the next two years, despite slow growth and currency devaluations throughout much of the rest of the developed world.