State Is Continuing Its Rebound, UCLA Says

California continues its strong rebound and, despite a slight decline in the job growth expected this year, the statewide unemployment rate will drop to within a fraction of the national figure within three years, closing a gap that has persisted since the beginning of the decade, according to a UCLA report to be released today.

“By any measure of employment, California is now showing a strong and broadly based expansion,” the latest quarterly report by the UCLA-Anderson Business Forecasting Project says.

In 1999, the report predicts, the statewide unemployment rate will drop to 5.5%, almost as low as the 5.4% rate predicted for the nation as a whole. In their December report, the UCLA economists had expected the state rate to remain relatively high at 5.8%.

The economists ratcheted their prediction downward slightly for job growth in California this year, forecasting a 2.7% increase, compared with the 3.1% growth they had predicted in their December report. The revision came partly because of changes announced last month by the state in its previously released employment data, as well as moderating national economic growth.

The state’s job growth, though, will continue to outpace the nation, which will post a 2% increase this year, said Tom Lieser, associate director for the forecasting group. The three-year forecast has California adding 926,000 jobs by the end of 1999, a downward revision of only 24,000 jobs from the December report.

“For the state as a whole, it’s a fairly positive report,” Lieser said.

Los Angeles, however, managed only 1.5% job growth in 1996, according to the revised, annual monthly average for the year released by the Employment Development Department, Lieser’s group said. The EDD previously reported a 2.3% growth in jobs for 1996. Orange County’s growth, by comparison, was revised upward to 2.8% from 2.4%, and Riverside-San Bernardino was changed to 3.5% from 2.7%. Ventura County was revised down to 1.1% from 1.6%

“It’s not that anything disastrous happened in Los Angeles, it’s just that job growth was more moderate than previously believed,” Lieser said. “It’s going to take us some time to get back to the old job levels.”

Southern California as a whole is recording healthy job gains and steady reductions in unemployment, he said.

Most surprising among the EDD revisions was the upward change in manufacturing employment for Los Angeles County last year, Lieser said. Manufacturing added 10,300 generally high-paying jobs in a variety of mostly durable-goods industries such as instruments, electronic components and transportation equipment.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Scaling Back The UCLA economic forecast trimmed its California projections for 1997 in several key areas. Figures from the December 1996 and March 1997 forecasts: *--*

December forecast Personal income 5.7% Taxable sales 5.5 Consumer prices 2.7 Employment 3.1 Unemployment 6.5 Residential building permits (thousands of units) 122

March forecast Personal income 5.1% Taxable sales 5.0 Consumer prices 2.3 Employment 2.7 Unemployment 6.4 Residential building permits (thousands of units) 105

*--*

Source: UCLA Anderson Forecast