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Wednesday, Sep 27, 2023

LA Economy



Senior Reporter

L.A.’s regional economy will stay in its growth mode this year, buoyed by stabilizing defense spending and international trade, according to an economic forecast to be released this week.

“We are expecting an increase in overall employment in Los Angeles County of about 1.8 percent for 1997,” said Esmael Adibi, professor at the Center for Economic Research at Chapman University in Orange County.

“We are estimating that total jobs grew by 2.0 percent in 1996,” he said.

The county job growth picture in 1997 will be less robust than in 1996, due to a slightly weaker national economy, said Adibi. When the national economy slows, there is less demand for goods and services produced in Los Angeles.

Still, L.A.’s economy should fare better than that of the nation, due to stronger defense industry orders, and stronger exports, said Adibi.

“The federal government is spending on defense; that is no longer shrinking. And, we see an uptick in exports and imports, both of which help create jobs here,” said Adibi.

The Chapman findings will be presented on Tuesday as part of a conference sponsored by the Independent Colleges of Southern California.

Like many other local economists, Adibi said he is confused by pending revisions of labor market data by the state Employment Development Department.

The EDD releases surveys estimating job growth or shrinkage, which are based on a random sample taken from all the unemployment tax forms filed by employers for each worker in the state.

Once a year, the agency tallies all the tax forms to get a true employment number, which sometimes turns out to be widely divergent from its sample estimate.

Recently, EDD analysts have suggested that the final tally, due to be completed in March, will show that job growth in the county may be half or less what sample surveys have shown for most of 1996.

Thus, Los Angeles County may have had job growth of about 1 percent last year.

“I wish they wouldn’t have such large revisions, but I am sticking with my forecast of 1.8 percent growth in 1997,” said Adibi.

Recently, Jack Kyser of the Economic Development Corp. of Los Angeles County predicted 2.4 percent job growth in the county for 1997.

In other forecasts, Adibi estimated that total taxable sales in the county will increase by 4.9 percent in 1997 (2.7 percent after adjustment for inflation), and that house prices will appreciate by 1.6 percent (down marginally, after adjusting for inflation).

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