California employment has reached record levels and jobs will likely continue to grow over the next two years, according to a UCLA economic forecast released Wednesday.
UCLA Anderson Forecast senior economist Jerry Nickelsburg wrote that the number of payroll jobs in the state has reached 16.5 million, up 6.7 percent from its previous peak. Factoring in farm labor and self-employment, the number of people working is at a record 18.2 million, up 7 percent from its previous high, according to Nickelsburg.
“How long can this go on?” Nickelsburg asked. “In less than two months, there will be a presidential election and on Jan. 20, 2017, less than four months away, a new president will be inaugurated. Who that president will be is unknown, but to be sure, whomever it might be will impact the forecast for California.”
Also looming large on the state’s economic horizon are two measures on the November ballot — Proposition 55‘s proposed sales tax extension and Proposition 64‘s proposed legalization of recreational marijuana use.
“Also, we hear of the threat of war — a trade war, that is,” Nickelsburg wrote in his essay, an allusion to Donald Trump’s statements on U.S.-China relations. “The impact of a trade war on the logistics industry, a vital industry for California, requires further investigation as it bears directly on the risk to the California forecast.”
But Nickelsburg concluded that despite the changes ahead, “economic policy, taxes and grass (marijuana) will not be significant players of the next 2 1/2 years.”
“The current forecast is for continued steady gains in employment through 2018,” Nickelsburg wrote. “What this means is a steady decrease in the unemployment rate in California over the next two years. We expect California’s unemployment rate to be insignificantly different from the U.S. rate at 5.4 percent by the end of the forecast period.”
Nickelburg predicted total employment growth of 2 percent this year, then 1.7 percent and 1.1 percent in the next two years.
On the national front, UCLA Anderson senior economist David Shulman predicted growth of gross domestic product of 2 percent to 2.5 percent in 2017 and 2018, with employment growth slowing from 200,000 jobs per month to 150,000 per month in 2017 and 125,000 in 2018.
“Remember the closer an economy is to full employment the more the demographics of the work force takes hold,” Shulman wrote. “The unemployment rate is forecast to be in a very tight 4.8 percent to 5 percent range for most of the forecast period as the labor force participation rate rises modestly.”
— City News Service