CSUF Economic Forecast: SoCal Approaching Full Employment

Southern California SoCal ferris wheel Santa Monica (Ted Drake / Flickr / CC / Cropped)
Ted Drake / Flickr / CC / Cropped
Newport Beach, CA

The quarterly CSUF 2017 Economic Forecast predicts that Orange County may already be at full employment, while Los Angeles and San Bernardino Counties are approaching full employment.

The Woods Center for Economic Analysis and Forecasting reported that at the peak of the Great Recession in 2009, California unemployment was a near-national-high of 12.2 percent, versus a national peak of 10 percent in 2010. But over the last five years, the differential has narrowed dramatically, with California unemployment down to 5.2 percent versus the national level at 4.7 percent.

California still has pockets of rural depression-level unemployment, such as Colusa County at 22.8 percent in the north, and Imperial County at 18.4 in the south. The big, populous SoCal counties of Orange, Los Angeles and San Bernardino, however, have been expanding faster than the state and the nation.

The 2016 Orange County unemployment rate fell from 4.5 to 4 percent during the year, and shriveled to a decade-low 3.7 in February. The rate in neighboring Los Angeles County plunged last year from 6.7 percent to 5.2 percent, and unemployment in San Bernardino County fell from 6.6 to 5.9 percent.

The only California counties with lower unemployment than Orange County are Silicon Valley’s San Mateo, County at 2.8 percent; San Francisco and Marin counties at 3 percent; and Santa Clara County at 3.5 percent. Although tech leaders recently told Quartz that software automation will destroy middle class jobs, Breitbart News reported that it has been Silicon Valley’s tech jobs that have been cut over the last 24 months.

According to the Orange County Workforce Report, which is also produced by the Woods Center, the strongest employment growth since 2010 has occurred in the construction trades, which are up 51.9 percent after adding 35,300 jobs. The future continues to look bright with 12,000 building permits issued in 2016, up 1,000 over 2015 and the highest rate since 2000.

The Woods Center credits SoCal’s strong job growth to the strength of construction. Orange County’s housing market has sizzled, with the median housing prices up 5.1 percent to crack $720,000 in March, according to CoreLogic.

The Orange County Register just ran an article that suggested local employment growth is starting to slow due to this year’s heavy rainfall. But most local employers Breitbart contacted blamed any hiring slow-down on the pool of qualified workers drying up.

Local recruiter websites, such as Indeed, report entry-level positions are very difficult to fill with responsible candidates in Orange County. Similar positions are also taking extended periods to fill in Los Angeles, but are still easy to fill in the Inland Empire’s Riverside and San Bernardino counties.

Woods expects that with Orange County unemployment rates at levels consistent with full employment, job growth will shrink to 2.1 percent this year and 1.9 percent in 2018. They expect that Inland Empire job growth, which was a healthy 3.5 rate in 2016, will spike up to 4.4 percent in 2017 and 4.8 percent in 2018.

Woods Center conducts a quarterly survey of 700 Southern California business leaders to gauge growth expectations for local companies and trends for the overall economy.