Growing incomes, falling unemployment, relatively low interest rates through 2023 and falling inflation are predicted for the economies of the United States, California and Marin County by a prominent region economist Wednesday.
Marin Economic Forum chief economist Robert Eyler, also a professor of economics at Sonoma State University, presented a timeline of some of these key indicators on Wednesday during a webinar on the Marin Economic Briefing. He predicted income growth of 6.5% for 2021 continuing through 2024 and low interest rates through 2023, following the recent rise in inflation to 4.99% for the 12 months. ending in May.
He raised early signs of the impact of COVID-19 variants on the economy nationwide and also provided theories on what is causing some workers to choose not to return to work.
California’s economy is rebounding
In California, Eyler said job growth continues and is expected to pick up by mid to late 2022. However, he noted that the Los Angeles metro area remains the “biggest drag” on state figures, but many counties are back to pre-COVID residential job levels, including Napa County.
The Journal reported that Marin’s unemployment rate in May had fallen to 4.3%; from Sonoma County, 5.3%; Napa County, 5.5%; Mendocino County, 5.9%; Lake County, 6.9%; and Solano County, 7.2%. Eyler did not provide current data on employment in other North Bay counties during his presentation.
Hotels, restaurants and event centers are seen as the main factors holding back the state’s economy, but he expects those sectors to accelerate the recovery from this summer.
To back up his opinion on a relatively rapid recovery, he noted that the state’s Department of Economic Development reports that it took 71 months to recover the jobs lost during the Great Recession, but California is very close to fully recovering. pre-COVID jobs after about 17 months, lifting pandemic restrictions on June 15.
Eyler admitted that inflation is on the rise. He said gas prices – traditionally not seen as part of core inflation measures – are the main culprit, but only temporary. As inflation rises, it was expected with sustained increases in gas prices pushing headline inflation towards the basic price index defined as the prices paid by consumers for goods and services, he said. declared.
House prices are another major driver of regional inflation. Eyler urged investors to watch the bond markets for growing risks and market reactions. The Federal Open Market Committee, the Federal Reserve’s governing body for monetary policy, makes key decisions about interest rates and the growth of the US money supply.
The committee tried to keep inflation at the 2% level, but inflation had reached almost 5% as of May 31.
Marin almost regains jobs lost during pandemic
As for the resumption of jobs in Marin County, Eyler said it took 58 months to recoup the jobs lost during the Great Recession, but this county is already on the verge of returning to its January employment level. 2020. For those who live in Marin, however, he stressed that this total must continue to rebound to ensure local and regional economic recovery.
Another key factor that can delay the recovery, he said, is the size of the civilian workforce relative to civilian employment for a county like Marin relative to California as a whole.
From May 2019 to May 2021, Marin’s civilian workforce declined by 7,200 (5.2%) and civilian employment in the county declined by 10,000 (7.4%), according to the State Employment Development Department. At the same time, the civilian workforce statewide lost 293,000 workers (1.5%) and civilian employment fell to 1,014,900 (5.5%).
The unemployment rate in May in California was 7.5%.
“The comparison to May 2019 reminds us that the recession means a loss of growth from a benchmark date two years ago,” Eyler added.
Key changes to hiring
When studying workforce dynamics for Marin County and California from April 2020 to May 2021, there was a sustained change in the number of local and state residents available for to work. Eyler said there are four main reasons workers leave the workforce:
- People who change careers and / or seek an education
- Residents leaving the area (now counted elsewhere)
- Those who choose to leave because of discouragement or household needs, such as childcare.
Another way to look at jobs in Marin County is to look at the percentage changes between May 2019 and May of this year for 14 employer groups.
During this period, the largest positive growth job category was total agricultural employment (33.3%), followed by transportation and warehousing (7.7%) and construction (0, 3%), according to EDD figures cited by Eyler.