California Unemployment Could Drop Below 4.9% by 2017
By Renee Schiavone
California’s unemployment rate will continue to drop over the next two years, eventually reaching a low of about 4.9 percent as the state continues to outpace the nation in job growth, according to a UCLA economic forecast released Wednesday.
UCLA Anderson Forecast senior economist Jerry Nickelsburg said growth in non-farm employment in California has outpaced the nation by one percentage point over the past three months and by 0.9 percentage points over the past year.
“This has resulted in the unemployment rate falling to 5.8 percent,” Nickelsburg wrote in his report. “These gains are now widespread and have taken the state to new employment heights, 5.2 percent above the previous peak. Though we expect growth rates to slow as the state moves closer to full employment in 2016, the fundamentals that have been driving the Golden State’s employment remain in place and no particular weakness or imbalance has appeared.”
Economists equate “full employment” to an unemployment rate of about 5 percent. Nickelburg projected that the state’s unemployment rate would hit 4.9 percent by the end of 2017. His forecast calls for total employment growth of 2.6 percent this year, then 2.1 percent next year and 1.4 percent in 2017. Payrolls will grow at about the same rate, he predicted.
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