Forecast: Bay Area, California running out of people to hire
The job markets in the Bay Area and California are seeing dramatically low unemployment rates, a tight job dynamic that could cause regional labor markets and the economy in California to turn more sluggish, according to a new study released Wednesday.
“The California economy is slowing down,” the UCLA Anderson Forecast said in an unsettling quarterly report.
Job sectors in the Bay Area and statewide have expanded for such a long time that unemployment rates have been driven to record or near-record low levels, which in turn shrinks the pool of people available to be hired by employers, the UCLA Anderson Forecast report determined.
“The state is, quite simply, running out of people to be employed,” Jerry Nickelsburg, director of the Anderson Forecast, said in the report.
The report noted that unemployment rates have improved dramatically in the Bay Area in the years of economic expansion since the Great Recession ended.
In April, the Bay Area jobless rate was 2.7 percent, which was a considerable improvement from the March unemployment rate of 3.1 percent for the nine-county region, according to this news organization’s analysis of seasonally adjusted figures compiled by Beacon Economics and UC Riverside.
The unemployment rates in the Bay Area were only slightly above the record-low level of 2.6 percent. Those lowest-ever levels occurred multiple times in 2018, with the most recent such instance last December, the Beacon statistics show.
Over the 12 months that ended in April, the Bay Area added 97,400 jobs, which produced a 2.5 percent increase in the number of jobs in the region during the one-year period.
During that same one-year stretch, California added 271,000 jobs — which means the Bay Area accounted for more than one-third — 36 percent — of all the jobs added statewide.
The pace of growth of the Bay Area job market galloped well ahead of the rate of expansion for the California employment sector. The number of jobs in California increased 1.6 percent over the 12 months that ended in April.
Despite these favorable trends, the UCLA Anderson Forecast predicted the California job market will experience a steady slowdown in its rate of growth over the next few years.
Non-farm payroll jobs are expected to increase by 1.4 percent in 2019 and 0.8 percent in 2020, the report projected.
Even though the job market might be slowing down, according to the forecast report, the prognosticators also pointed out that employment remains strong enough that it continues to put upward pressure on wages.
Real personal income, adjusted for the effects of inflation, is expected to grow 2.9 percent in 2019 and 1.9 percent in 2020, the economists predicted.
“Economic prosperity has clearly become the norm in California today,” Nickelsburg wrote in his report.