California’s job market will continue to grow over the next year or so, but at a pace more sluggish than recent years, according to a closely watched economic prediction that was released Wednesday.
That unsettling outlook was sketched by the latest UCLA Anderson Forecast, an economic barometer that points to a slower pace by next year for payroll jobs, retail sales and personal income throughout California.
One reason why California faces a more sluggish pace of employment growth? Oddly enough it’s because the Golden State is at or near full employment, which is sparked by a very low jobless rate.
Increasingly, employers have been forced to scramble to hire workers, and the protracted search for qualified employees has also curbed the speed at which companies can fill job openings and bring new people on board.
“The issue in California is employers are running out of people who are available to be hired,” said Jerry Nickelsburg, director of the UCLA Anderson Forecast.
Measured by non-farm payroll jobs, California employment will expand by 1.8 percent during 2019, according to the Anderson Forecast. That would be slower growth than the 2 percent job growth statewide in 2018. During 2020, non-farm payrolls are expected to expand by a relatively feeble 0.6 percent in California, the forecasters predicted.
Real personal income in California, adjusted for inflation, was 1.1 percent in 2018. Personal income will perk up this year and expand to 3.2 percent. But the pace of income growth will slump in 2020 and expand by just 1.8 percent, according to the Anderson Forecast.
Taxable retail sales, also adjusted for inflation, grew by 2.9 percent in 2018 compared with the year before. But taxable sales will droop to a 2.5 percent growth level in 2019, and then weaken even further in 2020 to a 1.4 percent growth rate, the Anderson Forecast predicted.
The prospect of slower payroll job growth may also surface in the Bay Area.
Jobless rates in the Bay Area are around 3 percent, or even lower, according to Nickelsburg. And they are lower than the statewide and nationwide unemployment rates, he added.
“These low jobless rates mean the Bay Area is at full employment,” Nickelsburg said. “And when you have full employment, you run out of people you can hire.”