Summary
A Review of Employment and Unemployment
Export Led Growth: Where Are the Jobs?
The Housing Downturn: Where Is The Bottom?
Forecast
The CA Economy
The U.S. Economy
The
Cities of
Alameda
Antioch
Albany
Berkeley
Brentwood
Dublin
El Cerrito
Emeryville
Fremont
Hayward
Livermore
Martinez
Newark
Oakland
Oakley
Piedmont
Pinole
Pittsburg
Pleasant
Hill
Pleasanton
Richmond
San
Leandro
San
Ramon
Alameda County
Contra
Costa County
This forecast
was prepared by:
Economist
Levan Efremidze
Jerry Nickelsburg
UCLA Anderson Forecast
www.uclaforecast.com
East
Bay EDA Contact
Stephanie Brown
(510) 272-6843
stephanie@eastbayeda.org
East
Bay EDA
1221 Oak St., Ste. 555
Oakland. CA 94612
Serving the East Bay
- the Bright Side of the
San Francisco Bay
For more information on
the East Bay visit
www.eastbayeda.org
Archived newsletters & forecasts
Reports & studies on the East Bay
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OCTOBER
2008 EDITION
INTRODUCTION
East Bay EDA is
pleased to provide the East Bay Quarterly Forecast, authored by
Levan Eframidze, and Jerry Nickelsburg
of the UCLA Anderson Forecast.
Click here to Download
the PDF (529k) version of this report.
This quarter's forecast includes executive
summaries of the UCLA Anderson Forecast's
National and California Outlooks, authored
by Jerry Nickelsburg.
To view the Bay Area "by the numbers", download the
Quarterly Indicators Sheet for Q3 2008. This one-page summary includes GDP, CPI, employment, housing, construction permit, hotel, airline passenger, and foreign trade data.
by Levan Eframidze
Summary
Over the last eighteen months the sluggishness in the East Bay economy has been characterized by housing and housing related weakness. We have been closely monitoring the East Bay economy for a spread of this weakness to the broader economy since the housing market began to weaken two and a half years ago. In the last East Bay Report we discussed the fact that the East Bay, with its significant bedroom communities, residential construction industry, and home finance industry had generated very ugly employment numbers and had fared worse than the rest of the Bay Area. The East Bay economy has continued to weaken since the 2nd quarter and job losses have become increasingly large and more widespread.
The 3rd quarter also provides evidence of a turning point in the national economy and as a consequence, it predicts a broader downturn in personal income and employment in the East Bay. Inflation eating away at the value of stagnant nominal income, more than a severe contraction in economic activity, is the story of the 3rd quarter, and an outright contraction of income, employment, and output is expected in the 4th. More than most regional economies in the U.S., the Bay Area economy is better positioned to weather the current economic storm. It has the advantages of its geographical proximity to the Pacific Rim, its export oriented manufacturing logistics and port, and its dynamic innovation and knowledge based services sector. Nevertheless, the Bay Area will not escape the storm and the East Bay will bear the largest share of the Bay Area’s contraction. This East Bay Report begins with a review of labor markets and the jobless growth of the East Bay’s manufacturing driven by growing export demand, then follows with a re-examination of the turning point for the housing market, and concludes with the impact of the downturn in the U.S. economy on East Bay economic activity and the East Bay forecast.
Continue reading "Summary"
Bay Area employment growth turned negative during the last two quarters. The three district areas- San Francisco MD, San Jose MSA, and Oakland MD (the East Bay) - are a mix of positive and negative employment trends. While San Francisco is still adding jobs and Silicon Valley is holding its own, job loss in the East Bay has tipped the growth scale for the entire region to the negative side. There were approximately 4,000 payroll jobs lost in the 1st Quarter compared to the previous year and 11,000 or 1.1% of payroll employment lost in the East Bay in the 2nd quarter. The employment picture in the East Bay went from bad to worse in the 3rd quarter. Payroll employment is 2% below 3rd quarter 2007 and total employment, which includes the self employed, is down by 9,000 jobs or 0.7%. Unemployment in the East Bay is now at levels not seen since the recession of 2001.
Continue Reading "A Review of Employment and Unemployment "
Exports from the U.S. grew at an astonishing 9+% this year. It was that growth that kept us out of a recession through the first half of the year, and in the absence of the uncertainty emanating from the financial crisis, might have averted one altogether. For the East Bay this should be good news. Manufacturing is an important part of the East Bay economy. It amounts to approximately 9% of the regions employment. With the port of Oakland nearby, goods manufactured for export to Asia have a short, direct logistics chain. With such rapid growth in exports we would expect to see a jump in East Bay manufacturing employment. However, it did not happen. Employment in manufacturing shrunk by -1.6% in the 1st and 2nd quarter, and again by -1.5% in the 3rd, as compared to a year earlier. Employment in transportation and warehousing grew a modest 0.6% in the 3rd quarter due in part to increased exports of agricultural goods from the Central Valley.
Continue reading "Export Led Job
Growth..."
Median home prices are still in freefall in
the East Bay, as in most of California.
The year-over-year rate of decline, as
measured by the median home sales price,
has now reached 30% in Alameda County
and 46% in Contra Costa County. These
are astonishing, record declines.
Continue reading "The Housing
Downturn..."
After a review of the 3rd quarter performance, one could be reasonably optimistic about the near term prospects for the East Bay. Export led growth has been increasing income, and if productivity growth ever slows down, will increase employment. The end of the housing downturn, which has had a significant impact on all aspects of the East Bay economy, is in sight and it will be a decreasing drag on economic growth. Outside of retail, services are growing, albeit slowly. But the events of the past two months cause us to take a more pessimistic view, even more pessimistic than our early September national forecast would suggest.
Continue reading "Near
Term Forecast..."
CALIFORNIA
By Jerry Nickelsburg
California is once again, and this time unfortunately, a bell weather state. The California economy stalled out a quarter earlier than the U.S. economy and sharply rising unemployment appeared here on the West Coast first. The continuing plunge in housing prices and skyrocketing foreclosures, a slowing of imports though California’s major ports, and continued mortgage finance related troubles for the financial industry continue to take their toll. No longer are the traditional engines of growth for California, the services sectors, just barely keeping California employment growth in positive numbers. The good news is that the statistical evidence shows some slowing of the negative inertia in residential construction, and end in sight for the finance industry, and some strength in manufacturing, agriculture, health care and educations.
Continue reading "The CA Economy..."
THE NATION
By Jerry Nickelsburg
After growing at a surprisingly strong 2.8% in the second quarter, the national economy appeared to have stalled through the end of August. The temporary boost to consumption coming from the $108 billion economic stabilization package (tax rebates) has been largely spent. It is now important to watch consumer buying habits through the upcoming holiday season as it is going to play a critical role in the course of the U.S. economy. But, the recent, post rebate, pull back of the consumer in reaction to the meltdown on Wall Street may well mean that continued growth in net exports will be insufficient to carry the U.S. economy. As of the time the forecast was constructed (September 2008) we expected real GDP growth to be essentially zero over the next six months (Q4 2008 and Q1 2009). Unemployment, having risen to levels in the low 6% range, would remain elevated through the year as the stalled economy would be unable to generate sufficient job growth to bring it down. What we were describing was an economy bumping along at stall speed where any modest shock could trigger a contraction and full blown recession.
Continue reading "The U.S. Economy..."
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