Report: slowing but still strong state economy
October 10, 2017
• . No big reduction in jobless rate
• Central Valley's economy bolstered by continuation of Obamacare
California’s economic growth has slowed from the nation-leading levels of recent years, but continues to expand at a steady rate according to the latest projection from the Center for Business and Policy Research at the University of the Pacific in Stockton.
The forecast projects real gross state product to sustain its expansion at a 2.5 percent to 3.0 percent rate and payrolls to grow at about 1.5 percent rate for the next two years.
The unemployment rate is about 5 percent and is expected to remain at or slightly below this level over the next few years, the report says.
Faster growth in California is constrained by the growing scarcity of skilled workers, and extreme housing costs that prevent faster growth to population and the labor force.
In the regional outlook, these constraints of labor and housing have led to a long anticipated growth slowdown in the Bay Area. "However, the Bay Area economy remains strong and we do not project any additional slowdown. The San Francisco, San Jose and Oakland metro areas are all projected to maintain current pace near 2 percent job growth in 2018," says the report.
The economic outlook for the Central Valley has improved slightly over the past few months, in part because efforts to repeal the Affordable Care Act have failed and construction activity continues to increase, the report says.
The North San Joaquin Valley and Sacramento are forecast to exceed 2 percent growth in payrolls next year.