The local economy will see slower job growth this year and next as it reaches cruising altitude, the Los Angeles County Economic Development Corp. says in a forecast to be released this morning.
“Growth is in the picture; however, the pace of job gains will become more tempered this year and next as the economy reaches ‘cruising altitude,’” LAEDC chief economist and forecast lead author Robert Kleinhenz said in the forecast.
On the jobs front, after a robust 2015 that saw employers in L.A. County add 95,000 jobs to their payrolls for a growth rate of 2.2 percent, the growth rate is expected to slow to 1.7 percent (+ 73,000 jobs) this year and a mere 1 percent (+44,000 jobs) next year.
Likewise, after a sharp drop last year, the unemployment rate is expected to remain largely stagnant at about 6 percent this year and next. That’s in sharp contrast to the plunge in the rate last year from 8 percent at the beginning to 5.9 percent in December. The forecast says the rate is expected to average 6.2 percent this year and 5.9 percent next year.
More robust growth is expected this year and next in other closely watched indicators. Per capita income growth, which averaged 3.6 percent last year, is forecast to rise 3.9 percent this year and 4.9 percent next year as long-anticipated wage gains are realized. And taxable sales are forecast to jump 5.5 percent this year and 6.8 percent next year after a “lackluster” 2.9 percent growth rate last year, giving a much-needed boost to local government coffers.
Looking at three of the county’s major industry clusters – trade, entertainment and professional/technical services – the forecast paints a mixed picture.
On the trade front, total cargo container activity at the ports is expected to remain flat as a slight rise in imports is offset by a slight drop in exports. Entertainment employment is expected to eke out a 1 percent gain as film tax credits boost sagging feature film production. On the brighter side, job gains approaching 4 percent are expected in the professional/technical services sector.
The forecast is set to be officially unveiled at the LAEDC’s annual forecast conference this morning at the Omni Hotel in downtown Los Angeles.
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