California’s economy is growing jobs faster than previously projected and will maintain solid 3% growth in real gross state product according to the latest projection from the Center for Business and Policy Research at the University of the Pacific. The latest forecast boosts its projection of 2015 job growth in California to 3%, up from 2.3% in the January forecast, and marking the third straight year of 3% or better job growth. With the State’s unemployment rate projected to drop below 6% by the end of the year, more moderate 2.1% job growth is anticipated in 2016.
While the drought is having substantial impacts on the environment and lifestyles, its statewide economic impacts remain small, about 0.1% of gross state product even as conditions have worsened in 2015. In fact, the value of agricultural production in the Central Valley set an all-time record. The results show that “market conditions are more powerful than the weather for the agricultural economy” according to CBPR Director Dr. Jeff Michael. Many Central Valley metro areas are experiencing single-digit unemployment in 2015, including Fresno, an area that has only seen an unemployment rate below 10% in 3 of the past 25 years. Growth in transportation, government, and a recovering housing market are also helping the Valley.
The Bay Area continues to have the hottest economy in the State. The tech-driven San Jose and San Francisco areas are on pace for a 4th consecutive year of job growth exceeding 4%, nearly 5% in 2015. We project tightening labor markets and extreme real estate costs are constraints that could cut the pace of Bay area growth in half in 2016, while still being strong and vibrant enough to lead the State’s economy. The Sacramento area continues to make steady progress, and will finally recover its pre-recession employment level in the final quarter of 2015, the last of California’s ten largest metro areas to achieve this benchmark.
Bay Area Metro Forecast Summary
|Metro Area||Nonfarm Payroll Employment (% change)||Unemployment Rate (%)|
San Francisco MSA includes San Francisco and San Mateo counties. Oakland MSA includes Contra Costa and Alameda counties. San Jose MSA includes Santa Clara and San Benito counties.
Read more: University of the Pacific, Eberhardt School of Business California job growth will continue, new forecast predicts