Explaining Southern California's economy

California economy: When is a recovery not a recovery?

The UCLA Anderson Forecast, covering the fourth quarter of 2011 and looking forward through the fourth quarter of 2013, came out yesterday. KPCC's Brian Watt provided a report on air, and now I've had a chance to dig into at least some of the forecast. I'll start with the California section, presented by Anderson Forecast economist Jerry Nickelsburg. 

You'll remember that in the previous Anderson Forecast, Nickelsburg explained that California has broken into two distinctive economic regions: a recovering coast and a stagnating inland zone. Here's how I put it in the post I wrote back in September:

Since the financial crisis, two California economies have emerged. On the coast, there's growth. Inland, there's near-stagnation. You can easily see this expressed in the Los Angeles region's unemployment numbers. LA is bad, at at 12.7 percent. But Riverside and San Bernadino counties are far worse, at 15.1 and 14.3, respectively.

The industries that are creating jobs in California are also disproportionately located on the coast. Inland, the blast wave of the the housing bust is still being felt, with industries like construction shedding jobs.

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Cal State Fullerton economists ask, 'Where's my boom?'

CSU-Fullerton-Forecast-MDB

Matthew DeBord

The 17th Annual California State Fullerton Economic Forecast did not paint a pretty picture of the national of state economy for the next few years.

Economists Anil Puri and Mira Farka took the stage at the Hyatt Regency in Irvine this afternoon to deliver the 17th annual California State Fullerton Economic Forecast. At this point, given the state of the economy, no one expected the outlook to be good. The news that U.S. GDP growth picked up somewhat in the third quarter, to 2.5 percent, took some of the edge off. The theme of last year's presentation was "Recovery," so it made sense that the question asked this time around was "Where's my boom?"

Yeah, about that boom...

Much like the UCLA Anderson forecast, released in September, the Fullerton forecast — which provides a comprehensive picture of the national and Southern California regional economy — tackled the sluggish nature of the recovery from the 2008 Financial Crisis and subsequent Great Recession. What are economists at UCLA and Fullerton worried about? Well, not about finding a boom. More like avoiding a stall:

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California Trendwatch: Polarizing jobs, polarizing regions

Earlier this week, the UCLA Anderson Forecast released a report on the national and state economy that contained a rather disturbing trend analysis. Since the financial crisis, two California economies have emerged. On the coast, there's growth. Inland, there's near-stagnation. You can easily see this expressed in the Los Angeles region's unemployment numbers. LA is bad, at at 12.7 percent. But Riverside and San Bernadino counties are far worse, at 15.1 and 14.3, respectively.

The industries that are creating jobs in California are also disproportionately located on the coast. Inland, the blast wave of the the housing bust is still being felt, with industries like construction shedding jobs.

So, we have a polarization of economic growth, the to markedly different sub-states in the CA. Meanwhile, Lauren Dame recently produced this brief analysis of job polarization nationally, for the New America Foundation:

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Visual Aid: Where the jobs aren't in California

This chart, from the just-released UCLA Anderson Forecast, tells a very clear story about both why California's economy is so bad and what it needs to do to make it better (Sorry I can't make the actual chart a bit more clear!). We're creating jobs in health care, tourism, and scientific and technical services. We're losing jobs in construction, retail, and government. Everything else is pretty much flat.

Here's what that means. California needs to play to its strengths and be strategic about its future. We have a good shot at being the global leader in keeping people heathy longer and in caring for not just our own aging population, but the aging populations of other countries, especially China.

People still like beaches, sunshine, and Disneyland. Probably the Golden Gate and wine country, too.

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