Unemployment rate dips to five-year low
09/20/2013 7:03 PM
09/20/2013 10:39 PM
Unemployment in Stanislaus County dipped to a five-year low in August.
The jobless rate fell to 11.9 percent for the month – the first time since September 2008 it has fallen under 12 percent. It’s an improvement of a full percentage point from July, when it sat at 12.9 percent, and two percentage points from a year ago, when it was at 14.2 percent. The rate is also the lowest of the year so far.
The dip follows seasonal trends, as late-summer harvests and manufacturing kick in, driven by the area’s agricultural industry. But the decline also is further evidence of the continued slow yet steady improvement in the Central Valley economy since the Great Recession.
The new California and Metro Forecast for 2013-17 from the University of the Pacific School of Business shows solid, if not sensational, growth in employment in the Modesto metropolitan area over the next few years.
“It’s better. It’s improved growth over what we’ve been experiencing through the recovery,” said Jeff Michael, director of the university’s Business Forecasting Center, which put out the report. “It’s not massively improved. But better.”
Employment in the Modesto area is expected to grow by 1.4 percent this year and 2.2 percent in 2014. Growth is expected to remain around 2 percent each year through 2017. Also, for the first time in a forecast since the recession started, Michael said he sees unemployment dropping into the single digits in the future. While that isn’t expected to come until 2017, it’s a marked improvement over recent years when the jobless rate ballooned to almost 20 percent.
“The growth is certainly more broad-based. We expect some growth in all areas. Some of it is attributed to the housing recovery, which will fuel the beginning of recovery in construction activity in Modesto,” Michael said.
Construction continues to be one of the hardest-hit industries in the area. The field lost half of its jobs since the housing and mortgage crash, going from about 13,000 jobs to around 6,000 now.
“There’s still virtually no residential construction going on in Stanislaus County,” Michael said. “But the other construction growth is notable because it’s finally doing something.”
Construction is expected to grow by 4 percent in 2014. The service sector also is expected to improve in the coming year, increasing by 6.1 percent, followed closely by professional and business services at 5.1 percent. The only industries not expected to see moderate upticks in the forecast are information and government.
Yet the area continues to lag behind other regions in recovery – both in construction and overall economic indicators. Stanislaus County consistently has higher unemployment than both the state and national rates. California’s unemployment rate for August was 8.9 percent, and the national rate was 7.3 percent.
The population slowdown into the Central Valley is one of the reasons for the stunted recovery. Population in Modesto is forecast to increase by only 1 percent in 2014.
“(Modesto) has had a big slowdown in population growth and migration,” Michael said. “That affects home building, service sectors and retail sectors. That’s led to slower growth and slower recovery.”
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