Employment will continue to grow in California at a glacial pace this year and in 2013, but the jobless rate should drop in 2014 to 8.5 percent, which is much closer to the national rate than now, UCLA economists said in a quarterly forecast released this week.
However, even the gains arising from slow job growth could be threatened — by any substantial slowing of China's economy and by a worsening of the Eurozone crisis, according to the UCLA Anderson Forecast, which called those two possibilities "not out of the question."
Senior economist Jerry Nickelsburg noted in the forecast that California, though saddled with the nation's third-highest unemployment rate, has been outperforming the nation in job creation since January 2010, with only Nebraska faring better. As of July, seven California counties had unemployment rates lower than the U.S. rate, which remains above 8 percent, though many still had jobless rates above 13 percent.
Arcadia's unemployment rate is around 6.4 percent, lower than county, state, and national average.
Both the tech-heavy and lower-skilled sectors have been gaining jobs in California, while the government and logistics sectors saw job losses, according to Nickelsburg.
"All of this adds up to a California that is on the mend and growing consistent with our forecast for the past year," he wrote. "Although the unemployment rate has stayed persistently high and there exist structural problems, unless there is a further slowing of the U.S. economy, the state's unemployment rate should be converging on the nation's unemployment rate over the next two years."
Nickelsburg predicted employment growth in California of 1.8 percent this year, 1.6 percent in 2013 and 2.4 percent in 2014.
"The unemployment rate will hover around 10.7 percent through 2012," he wrote. "Unemployment will fall through 2013 and will average approximately 9.8 percent. ... In 2014 we expect the unemployment rate to drop to 8.5 percent, just shy of a percent higher than our U.S. forecast."
On the national front, UCLA senior economist David Shulman predicted that growth in U.S. Gross Domestic Product would be a sluggish 1.3 percent during the third quarter of the year and 1.5 percent in the fourth. That is expected to jump to 2 percent next year and possibly above 3 percent by 2014.
"The economy continues to muddle through in a 1 to 3 percent growth environment that will keep the unemployment rate painfully high," Shulman wrote.
"Although not contracting, consumer spending, exports and business investment will remain sluggish. In addition, federal purchases weighed down by a high debt load are contracting.
"The one bright spot is the beginning of the long-awaited rebound in housing. The big near-term risk comes in the form of the fiscal cliff where a too rapid fiscal consolidation could very well trigger a recession in early 2013."