SDSU Predicts Jobless Rate of 6.6% in ’91

San Diego State University’s Center for Public Economics is predicting that the county’s unemployment rate will average 6.6% during 1991, a full percentage point higher than a recent estimate made by the Greater San Diego Chamber of Commerce.

The county’s unemployment rate jumped to 5.4% in November, the highest level locally since January, 1987, when the unemployment rate hit 5.5%.

The SDSU prediction and a chamber forecast issued late last month both predict that consumer prices will rise by 5.3% during 1991. But the SDSU forecast is generally darker than the chamber’s.

For example, the chamber predicted that 16,700 housing starts will be authorized during 1991, while SDSU’s report suggests that just 15,000 residential building permits will be issued. And, while the chamber estimates that 38,000 new jobs will be created in the county during 1991, the SDSU report suggests that just 10,000 will be.

The SDSU report says that the 6.6% unemployment rate, a dramatic increase over the 4.7% rate reported this past October, will be caused by a sharp drop-off in job creation. An estimated 31,000 jobs were created in 1990.

In addition to stalling the creation of new jobs, the nationwide recession will slow population growth in the county, according to the report issued by Raford Boddy, an SDSU economics professor, and Joe Drew, a research analyst at SDSU.

The SDSU report suggests that 1,600 manufacturing jobs will be lost in the county during 1991. And, while population will increase by 2.7%, declining real per-capita sales will limit retail trade jobs growth to 1%, according to the SDSU report.

While the SDSU report is gloomier than the chamber forecast, “we’re both saying that San Diego is not recession-proof,” said Max Schetter, the chamber’s senior vice president. “We do think, though, that San Diego is recession-resistant.”

Schetter said the SDSU report is generally in line with the chamber’s determination that “eight years of economic vigor has turned around.”

The chamber believes that San Diego’s economy probably entered a recession during the last quarter of 1990. The chamber expects the economy to remain in recession for the first half of 1991, but rebound during the latter half of the year “if we don’t go to war” in the Middle East, Schetter said.