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PD Editorial: An ongoing tale of two economies

  • 1/14/2012: A1:

    PC: Dr. Jerry Nickelsburg, a senior economist at the UCLA Anderson Forecast, talks about the outlook for local, state and national economy at Sonoma County's annual State of the Economy Conference, in Rohnert Park, on Friday morning, January 13, 2012.

A professor at the University of Cardiff in Wales who specializes in seasonal disorders once calculated that, based on weather, personal debt, post-holiday blues and other factors, the most depressing day of the year is Jan. 24.

Not so this year for Sonoma County. Roughly 450 community leaders and business owners gathered at the annual State of the County breakfast in Rohnert Park on Friday to receive some of the most encouraging news they've heard in recent years. The message was this: While the rest of the nation's economy continues to plod along elephant-like, the county is part of a Bay Area-centered region that's starting to surge.

The county has "quite a bright outlook," said Jerry Nickelsburg, senior economist for UCLA Anderson Forecast. Among the positive news to be heard:

-#8226; Occupancy rates at county hotels have jumped 7 percent since last year, and hotel tax revenues are up 17 percent.

-#8226; The county's jobless rate fell to 5.7 percent in December and is close to where it was in mid-2008. The unemployment rate has now declined in four of the past five months.

-#8226; Meanwhile, the housing market continues to rebound. Last week, we reported that Sonoma County foreclosures fell in 2013 to their lowest level in seven years.

Two years ago, Nickelsburg said that Sonoma County was on the fence between "the two Californias." These include the inland area -#8212; with an older economy dependent on manufacturing, government growth and immigration -#8212; and a coastal economy that's largely knowledge and technology driven. The latter is growing steadily while the former "has been in, for all intents and purposes, a decade-long recession," Nickelsburg said. The coastal area now clearly includes Sonoma County. "It didn't before," he said.

Moreover, he praised the county for its increase in small businesses and startups. "You are becoming a much more entrepreneurial county," he said.

Nickelsburg's outlook on the rest of the nation was less rosy. The risk of inflation is high, he said, while predicting slow but steady growth, with GDP rising between 1 percent and 3 percent next year. Although that's approaching the nation's average, it's "horrible" when considering 3 percent is the mid-range between highs and lows. Without better highs, the nation is not keeping up with job creation and is still 13 million jobs below where it needs to be.

Now that Congress has failed to renew extended job benefits, he predicts that the national jobless numbers will decline. But don't be deceived. Most of that is a result of people who have given up looking for work. "Those are discouraged workers," he said. "That is not an increase in jobs per se."


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