Modest growth this year with recovery in 2024 – Daily News

According to a new forecast by the Los Angeles County Economic Development Corp. (2022-2024), California’s largest job increases are expected to be in education and healthcare (142,000 jobs), followed by government (28,500) and leisure and hospitality (24,700). file photo)

According to a newly released forecast from the Los Angeles County Economic Development Corp. California’s economy will see modest growth this year, but a rebound is expected in 2024.

According to the report, the Golden State is moving beyond a pandemic-driven recovery and will instead be impacted by global supply chain instability and Federal Reserve rate hikes, which “have raised real concerns that policy over-correction could push the United States into recession .”

According to the report, the possibility of a “shallow recession” would create its own problems in terms of business closures, job losses and reductions in household income and tax revenues.

A number of signs suggest that California has found its “new normal,” the forecast says, with employment indicators near pre-pandemic levels and talks about consumer spending refocusing on slowing demand to curb high inflation to mitigate.

The state’s economy is expected to grow by 0.3% this year. That’s below the 0.5% rate seen in 2022, but the report forecasts that next year’s GDP — the value of all goods and services produced during the year — will grow by 1.5%.

California job growth will slow to 0.8% in 2023, the report said, well below last year’s 5% gain and a 3.2% increase in 2021. However, it should be noted that those two years followed a 7.1% decline in 2020, when the COVID-19 pandemic led to temporary business closures and numerous layoffs.

The report predicts that California’s manufacturing sector will lose 27,300 jobs over the period 2022-2024, while trade, transportation and utilities will lose 17,400 and construction and mining payrolls will fall by 13,400 jobs. (iStockphoto)

Job growth in 2024 is expected to slow to 0.2%.

California’s largest job gains between 2022 and 2024 are expected to be in education and health services (142,000 jobs), followed by government (28,500) and leisure and hospitality (24,700).

On the other hand, the LAEDC forecasts that manufacturing will lose 27,300 jobs this biennium, while trade, transportation and utilities will lose 17,400 jobs and construction and mining payrolls will fall by 13,400 jobs.

California’s unemployment rate will average 4.9% in 2023 and 5.5% next year as the state’s economy continues to cool, the forecast said. That’s a slight increase from 4.4% over the past year, but a huge drop from 10.2% in 2020.

Personal income growth for California residents is expected to rise 4.1% this year after declining 0.5% in 2022, and next year is looking better with an expected 4.4% increase.

The report also shows that the state’s affordability ratio — the percentage of households that can afford a single-family home at the median price — has fallen to 18%.

And renters, who occupy 44.1% of California’s housing units, spend an “inordinately large portion of their income” on housing. Nearly 55% of rental units in California are cost-charged, the report said, meaning renters spend 30% or more of their income on rent each month.

Los Angeles District

Bigger challenges are forecast for Los Angeles County, where the economy is expected to contract 0.2% this year, followed by a 1.3% surge in 2024 as inflation cools and the Fed slows rate hikes.

Employment growth is expected to remain unchanged at 0.2% this year and in 2024. This follows the turbulent swings the county has seen in recent years, with a 11.8% plunge in 2021 and a 5.4% rise over the past year.

LA County’s unemployment rate is expected to average 6.4% this year and 6.7% next year — significantly higher than California’s unemployment rate of 4.9% and 5.5% over the same period.

County residents will also see a smaller increase in personal income, according to the study, with increases of 0.1% this year and 2.3% in 2024.

Like the state, LA County’s biggest job growth for 2022-2024 will be in education and healthcare. This industry is expected to add 25,300 new jobs over the two years, while professional and business services will add 5,700 and construction and mining 2,100 new jobs.

Manufacturing will weather the biggest drop with a loss of 9,100 jobs, followed by trade, transport & utilities (down 5,800 jobs) and leisure & hospitality (down 3,100).