L.A. County’s unemployment rate is expected to hover around 5 percent this year and next year as the job growth rate slows, according to a forecast issued Wednesday by the Los Angeles County Economic Development Corp.
The forecast, released at a breakfast event in downtown Wednesday morning, projects an unemployment rate this year of 5 percent and next year of 4.9 percent, both slightly lower than the average 5.1 percent last year. This very slight incremental improvement in the unemployment picture is a sign that Los Angeles County nears what most economists regard as full employment.
Job growth is also expected to slow to about 65,000 jobs added this year and another 68,000 jobs added next year, for a growth rate of about 1.5 percent each year. That’s down from job growth rates around 2 percent the past two years and is another sign of an economy near the top of the business cycle.
The slowdown is expected to occur because “there are fewer jobs needed to be added and the labor market has tightened,” said the forecast’s lead author, LAEDC Chief Economist Christine Cooper.
Despite this slowdown in job growth, the county’s total economic output is expected to grow at a 2.7 percent rate for the next two years, outpacing the national rate. With economic output growing faster than employment, productivity would appear to be increasing, either through improved worker productivity or more automation in various industries.
Leading all sectors in job growth this year and next year – as it has over the last couple years – is healthcare/social assistance, which is expected to add about 31,000 jobs over the next two years. Administrative/support services is next, projected to gain nearly 23,000 jobs, followed by food services , adding 19,000 jobs, and retail trade, adding nearly 12,000 jobs.
Manufacturing is expected to continue its long-term decline, shedding another 1,400 jobs over the next two years.
Public policy and energy reporter Howard Fine can be reached at email@example.com. Follow him on Twitter @howardafine.