WESTWOOD (CBSLA.com) — A marked slowdown in the economies in China and throughout the European Union could negate any traction California may see in slow but steady job growth, according to a report released Thursday.
Forecasters with the UCLA Anderson School of Economics expect the jobless rate to dip to 8.5 percent in 2014, but as UCLA economist David Shulman told KNX 1070 NEWSRADIO, a drop in exports could cancel that out.
Despite having the nation’s third-highest unemployment rate, California has steadily outperformed the rest of 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.
Jobs have been primarily created in the tech and lower-skilled sectors in California, while the government and logistics sectors saw job losses, according to the report.
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 – an number that may reach as high as 2 percent next year and possibly above 3 percent by 2014.
Shulman said any hope for a robust economic recovery in California and the rest of the U.S. lies in the real estate sector.
“The global economy is slowing, so we’re not going to get a real increase on the trade side, but the good news in the economy is housing is getting a lot better,” said Shulman. “After being the driver that basically brought on the recession, housing is now adding on the plus side and will become very significant next year.”
He also said the biggest near-term risk to the economy could come on the heels of a “too rapid fiscal consolidation” that may “trigger a recession in early 2013”.
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