Chapman Forecast: Steady CA growth

20 Jun, 2014 by John Seiler

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Chapman University’s new economic forecast projects steady but not spectacular economic growth for California and the nation. Real U.S. GDP growth could continue at about 2 percent a year. That’s not as good as the 5 percent or more during previous recoveries, but obviously better than a recession.

California jobs growth will continue especially strong, at 3 percent a year. It’ll be even stronger in the Inland Empire, at 4 percent. The Inland Empire was hit hardest during the Great Recession, but now is coming out the strongest.

However, the Inland Empire’s unemployment rate remains high, at 8.3 percent in April; compare to 7.3 percent for California. The state’s hot high-tech areas continue with low unemployment: San Francisco at 4.3 percent and Santa Clara at 5.4 percent. Orange County also remains low at 5 percent. Giant Los Angeles is at 7.6 percent.

Gubernatorial election

All this is good news for Gov. Jerry Brown’s re-election campaign. Opponent Neel Kashkari, a Republican, is campaigning on the slogan, “Jobs and Education. That’s it.” But the fairly strong economy shears off the first part of that. An uphill battle just became more steep.

In addition to all their other problems in recent decades, Republicans in California have just had bad luck. The 2003 recall turned out to be a disaster for the party because Arnold Schwarzenegger campaigned under the Republican brand but governed like a caricature of a tax-and-spend liberal Democrat.

In the wake of his disastrous tenure, in 2010 even billionaire Meg Whitman’s $180 million in campaign cash couldn’t overcome the Arnold Legacy against Brown’s low-budget but high-competence campaign.

This year, Brown is surfing the wave of the national recovery, which although not great (as noted) is strong enough to make things look pretty good. Brown also has been able to stand up to his fellow Democrats’ free-spending ways with a lot more muscle than that shown by the former bodybuilder.

But anything can happen in a campaign. And probably will.