San Diego’s economy will continue to grind along with slightly positive job growth for the next three to four quarters, mirroring the softening forecast for the nation and the state, according to a report from two local economists presented at the UCLA Anderson Forecast held Oct. 31 at the University of San Diego.
The report from USD economics professors Ryan Ratcliff and Alan Gin states that while there will be positive job growth in San Diego next year, it will just barely keep up with the growth of the labor force, both from new entrants as well as the return of discouraged workers.
The duo said unemployment in the region will hold at a steady 10 percent next year, and improve in the second half, with payroll job growth increasing to 2 percent to 2.5 percent in 2013. By the end of that year, they predict the unemployment rate will drop to 8.5 percent.
As to the housing market, the weak jobs outlook will continue to keep buyers out of the market, and prolong the absorption of distressed properties. Area median home prices will “move mostly sideways” and “decline another 4 percent before bottoming late next year,” according to the report.
By the end of 2012, the market will get a bit better, moving median prices about equal to or above where they are today, the economists said.
For California, UCLA economist Jerry Nickelsburg said a stalled national recovery is causing the gap to widen between the coastal and inland parts of the state.
He forecast little growth in employment statewide, ranging from 0.7 percent to 2.1 percent in 2012 and 2013. Unemployment will hover around 12 percent for the rest of this year, and average 11 percent through 2013, he said.