California’s economy will see modest growth this year but a rebound is expected in 2024, according to a newly released forecast from the Los Angeles County Economic Development Corp.
The report says the Golden State is moving beyond a pandemic-related recovery and will instead be impacted by global supply chain instability and the Federal Reserve’s interest rate hikes, which have created “real concerns that a policy overcorrection may lead the United States into a recession.”
The report says the possibility of “a shallow recession” would create its own problems in terms of business closures, job losses and reductions in household income and tax revenue.
A number of signs indicate California has discovered its “new normal,” the forecast said, with employment indicators near pre-pandemic levels and discussions of consumer spending refocused around cooling demand to temper high inflation.
The state’s economy is expected to see 0.3% growth this year. That falls below 2022’s rate of 0.5%, but the report predicts next year’s GDP — the value of all goods and services produced during the year — will grow by 1.5%.
California’s job growth will slow to 0.8% in 2023, the report said, which lands well below the 5% gain seen last year and a 3.2% uptick in 2021. It should be noted, however, that those two years followed a 7.1% decline in 2020 when the COVID-19 pandemic prompted temporary business closures and scores of layoffs.
Employment growth in 2024 is expected to dip to 0.2%.
California’s biggest 2022-2024 job gains are expected to come in educational and health services (142,000 jobs), followed by government (28,500) and leisure and hospitality (24,700).
On the downside, the LAEDC predicts manufacturing will shed 27,300 jobs over that two-year period, while trade, transportation and utilities will lose 17,400 jobs and construction and mining payrolls will be off by 13,400 jobs.
California’s unemployment rate will average 4.9% in 2023…
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