California’s 3.2-percent increase in the number of nonfarm payroll jobs in the past 12 months placed it in the upper tier for job growth, ranking 5th among all states. Western states posted four of the five strongest annual job growth rates, with Utah leading the way at 4.0 percent, followed by Florida at 3.8 percent, and Oregon and Washington, both at 3.4 percent.
Industry Sector Job Growth
According to Employment Development Department (EDD) data, service-providing sectors are driving job growth in these leading states. California’s annual absolute job change was the largest by far in the nation at more than 500,000. And thirty-eight percent of net new jobs nationwide were added in California, Texas, and Florida. California has also seen the largest gains in employment levels above the pre-recession peak.
Steady Unemployment Decline Expected
According to the new UCLA-Anderson economic forecast, a steady decrease in the unemployment rate is expected in California during the next 18 months due to the increase in U.S. growth rates from construction, automobiles, and business investment.
“We expect California’s unemployment rate to be insignificantly different from the U.S. rate at 4.9 percent during the forecast period and employment growth to then be constrained by the growth in the U.S., immigration, and natural growth in the working age population.” -Senior Economist Jerry Nickelsburg
The forecast estimates total employment growth at 2.5 percent in 2015, 2.1 percent in 2016 and 1.3 percent in 2017. Real personal income growth is estimated to be 4.5 percent in 2015 and forecast to be 4.4 percent and 3.5 percent in 2016 and 2017, respectively. At the same time, the unemployment rate should hover around 6.2 percent through the balance of 2015. Unemployment will fall throughout the next year and will average 5.2 percent — a slight downward revision from the March forecast. In 2017 the UCLA Anderson Forecast expects the unemployment rate to be approximately 5.0 percent, same as in the U.S.
In terms of GDP growth, the U.S. is expected to return to a 3 percent growth rate by the third quarter and that pace should hold through the end of 2016.
“At that rate of growth, the economy will likely be generating jobs at a 250,000 per month clip and the unemployment rate will close out 2015 at just below 5 percent,” the report says.
Job Growth Across California Metros
Annual job growth in March 2015 was strongest in 3 northern nonmetropolitan area counties on the Nevada border, led by Alpine County at 21 percent and Sierra County at 10 percent. Although both found in the upper-middle tier for rate of growth, three-quarters of the state’s absolute annual net job gain came from the San Francisco and Los Angeles Metropolitan Areas, with more than half coming from the Los Angeles Metropolitan Area alone.
This quarterly economic report was released by Economics & Planning Systems and the California Academy for Economic Development. Please view the economic snapshot to learn more about where California ranks in the nation regarding job growth, which regions of our state are growing, and which industries are the ones to watch.