Report: Calif. Businesses Booming, Unemployment to Drop

By ALEXANDER NGUYEN (Patch Staff)

Powered by a rebounding job market, the state and national economy are on an upward trend that should see increased consumer spending and a drop in unemployment in the coming year, according to a Los Angeles County Economic Development Corporation forecast released Wednesday.

“By several measures, California’s economy is thriving,” according to the forecast. “Following a 3 percent increase in 2014, non-farm jobs are expected to grow by 2.9 percent in 2015, and then slow slightly to 2.4 percent in 2016. The unemployment rate stood at 6.3 percent in July and is expected to decline to 5.8 percent in 2016.

“With further improvements anticipated for the labor market, personal income and total taxable sales should increase by 4.9 percent and 4.5 percent respectively this year, with similar or better gains in 2016.”

Economists noted that most areas of the state have recovered the jobs that were lost during the recession, leading to a demand for more skilled workers.

“Expanding the benefits of the state’s economic growth to a larger share of the population is the next big step,” according to the report. “Meeting this challenge will require attracting skilled workers to the state, increasing college enrollment and completion rates, upgrading the state’s physical infrastructure and careful management of the state’s finances and water resources.

“Contributing to the strength of the economies of California and Southern California are strong and well-developed technology, manufacturing, entertainment and tourism sectors,” according to the report. “Also underlying their success is openness to international trade, particularly in Southern California, which, in addition to being one of the nation’s largest consumer markets, serves as the primary conduit for trade and travel between the U.S. and Asia.”

The report noted that the nation’s economy is being bolstered by the so-called Millennials, who now outnumber Baby Boomers and are reaching their late-20s and early 30s, “the prime period for forming new households and becoming first-time homeowners.”

“Those ‘life cycle’ events were delayed by the Great Recession but have the potential to drive economic growth for the next several years, just as occurred with the Boomers in the 1970s and 1980s,” according to the report. “As Millennials form households and occupy dwellings as renters or owners, they are likely to buy a wide range of consumer durable goods as well as non- durable goods, unleashing a significant ripple effect through the economy.”

--City News Service, photo via Shuttertock