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Economy continues to show gains despite slow rate of growth

SoCal is performing better than it did at the start of 2012

Posted: February 1, 2013 6:54 p.m.
Updated: February 1, 2013 6:54 p.m.
 

Spending and growth in the private sector continue to drive the economic recovery, while the government sector remains a drag on the economy, a Los Angeles-based economist said Friday.

Reviewing key economic markers for the Los Angeles Economic Development Corporation during a news conference, Robert Kleinhenz said strength in business and consumer-spending numbers should bode well as the economy moves forward in 2013.

For the recovery to pick up speed, however, faster growth in the overall economy is needed to speed a decline in the unemployment rate, said the chief economist for the Kyser Center for Economic Research.

Kleinhenz predicts the 2013 jobless rate will most likely continue to drop at the same pace it did in 2012.

“Locally, we’re seeing somewhat faster growth in job rates, but we’re still well below what we need to see for a fast improvement,” he said. “The state will outperform the nation in terms of job growth.”

Statewide momentum is coming from the Bay Area and San Jose, where job growth has been more pronounced, Kleinhenz said.

Southern California counties, however, are performing at a better pace in 2013 than at the beginning of 2012, he said.

Key areas all show monthly and year-over-year job gains: retail, construction, manufacturing, transportation and warehousing, professional business services, education, and health according to the Bureau of Labor Statistics.

The job gains in construction are important, Kleinhenz said.

“We lost so many jobs during the recession. But there were 102,000 jobs added year-over-year and housing-start numbers popped up close to 1 million,” he said. “Construction and new housing tends to be a leading indicator (of recovery).”

Jobs in motion picture and sound recording are improving as well.

“About one-third of all the nation’s (film related) jobs are right here in Los Angeles County,” Kleinhenz said. “We saw an 8.8 percent year-over-year increase, and that bodes well for when we see labor reports that will come out later in February.”

Auto sales are also climbing rapidly as people finally replace cars they’ve hung onto for a number of years, he said.

The Great Recession, during which more than 8 million jobs were lost, officially ended June 2009, according to the National Bureau of Economic Research, the group that declares when economic downturns begin and end.

Employment tends to be a lagging indicator, so even though the recession was over employment continued falling, Kleinhenz said. Economists used January 2010 to begin tracking progress in the labor market.

“The labor report now is generally positive despite the slight uptick (in unemployment) in January,” he said.

jana@signalscv.com
661-287-5599

 

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