California Apparel News

California is on a steady course to see job growth outpace the U.S. economy through the end of 2016, eventually driving down the state unemployment to 5.6 percent during that period. That is considerably lower than the 7.3 percent recorded in October.

But the kinds of jobs that will be in demand are slowly changing. More positions will be created in the world of information and technology than in construction or manufacturing.

That means a whole different set of job skills will be needed by workers hoping to find employment.

That was the prediction outlined in the latest UCLA Anderson Forecast, unveiled on Dec. 10 at the University of California, Los Angeles.

Senior economist Jerry Nickelsburg, who wrote the California forecast, said construction jobs won’t be returning soon to the all-time highs seen in 2004 to 2007 and manufacturing employment continues to slowly decline even though factories are producing more with fewer workers.

According to the forecast report, the state unemployment rate will hover around 7.1 percent through the balance of 2014. Unemployment will fall through 2015 and will average approximately 6.6 percent, a slight decrease from the previous forecast. In 2016 the unemployment rate is predicted to be approximately 5.6 percent, slightly higher than the U.S. forecast.

“Our estimate for the 2014 total employment growth is 1.8 percent, and for 2015 and 2016 the forecast is for 2.1 percent and 2.2 percent,” Nickelsburg wrote in his report. “Payrolls will grow at about the same rate in the three years. Real personal income growth is estimated to be 3.1 percent in 2014 and forecast to be 4.5 percent in both 2015 and 2016.”

The counties whose employment percentages have risen the most recently are San Francisco, San Mateo, Santa Clara, Kern and Merced. In Merced, job gains have been seen in the agricultural industry, but increased hiring at the relatively new Merced campus for the University of California has been a major contributor.

The bulk of the jobs at the Merced campus, established in 2005, were educational and administrative jobs. Jobs in mining, manufacturing, construction as well as professional and business services that were lost during the recession have not been replaced.

On the national front

With oil prices falling, consumers are getting a big boost to their wallets. For most of the year, oil has been trading at around $100 a barrel. But more recently it has been fetching $70 to $75 a barrel.

That translates into pump prices falling at least 50 cents a gallon. UCLA Anderson senior economist David Shulman expects lower oil prices to prevail for a while. “There will be a huge benefit to consumers,” Shulman noted.

With the United States consuming about 135 billion gallons of gasoline a year, this means drivers will be saving $67 billion a year, which can be spent on other things, such as clothing, shoes, electronics, appliances and cars.

On the employment front, the U.S. economy should be adding 200,000 to 260,000 jobs a month, which will help the unemployment rate dip to 5 percent by the end of 2016.

Demand for labor will push up payrolls by 3.2 percent this year and next and by nearly 4 percent in 2016. That is much better than the annual average 1.8 percent wage gain seen between 2009 and 2013.

Housing starts will grow across the country by 21 percent to 1.21 million new houses, but this is considerably lower than the previously forecasted 1.38 million.

Shulman points out that banks’ credit standards continue to be rigorous and many people don’t have enough cash for a down payment because they are still recuperating from the recession.

That may change with Fannie Mae and Freddie Mac, the government-sponsored mortgage giants, promoting a program that would make it easier for some homebuyers with good credit and little cash to make a 3 percent down payment on a house that is their primary residence.