California’s job growth to outpace U.S., says study

THOUSAND OAKS

December 17, 2015

•  But margin of outperformance is likely to decrease

•  “We do believe that the probability of a recession in the U.S. is increasing, and it may be high”

Businesses in California are expected to continue to outperform the United States in job growth, but that the margin of outperformance is likely to decrease, according to a new report from the California Lutheran University Center for Economic Research and Forecasting in Thousand Oaks.

But California’s economic and job growth will to continue to be more volatile than that of the United States, the report says.

“While California’s tech sector dominates popular discussion of California’s job growth, the state’s most vibrant sectors are mostly old-tech and low-wage,” it says.

In general, the Bay Area, the Central Coast and the South Coast will see faster growth than the rest of the state. Los Angeles will lag the rest of the coast. Inland areas, such as the Central Valley, will see less robust growth although some inland areas may see improved growth.

“Our model predicts continued economic growth in the United States. We expect GDP to grow at annual rates under 3 percent throughout the forecast horizon of two years. We expect job growth to remain modest,” the report says.

Other highlights from the report include:

• “We also expect investment to remain low in the U.S. This alone almost guarantees that economic growth cannot achieve pre-recession levels within the next two years.

• “We do believe that the probability of a recession in the U.S. is increasing, and it may be high.

• “After the excesses of the real estate boom, the home ownership rate fell to typical levels. Then, it kept falling. There is no indication in the data that the rate of decline is likely to slow in the near future, much less reverse itself.”

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