Employment News

Economic forecast: Unemployment to drop in Stanislaus, Merced and San Joaquin counties

Exterior of the Amazon Fulfillment Center on Park Center Drive in Patterson, Ca. on Monday afternoon (07-29-13).
Exterior of the Amazon Fulfillment Center on Park Center Drive in Patterson, Ca. on Monday afternoon (07-29-13). The Modesto Bee

Stanislaus County employment rates and income levels will rise steadily throughout 2014 and for the next several years, predicts the University of the Pacific’s just-released economic forecast.

Stanislaus jobs will increase 2.7 percent this year, said Jeff Michael, director of the university’s Business Forecasting Center.

“That’s really good,” Michael assured. “It will be the strongest job growth in a decade for the Modesto area. Of course, after the ugly decade we’ve had, it’s not hard to look great by comparison.”

More than 12 percent of Stanislaus residents remain jobless this winter, but Michael expects unemployment rates to decline gradually to 11 percent by early 2016 and 10 percent by early 2017.

Warehousing jobs are growing the fastest in the region. Amazon’s new Patterson and Tracy distribution centers are the catalyst for that expansion, Michael said.

California’s massive new prison hospital, which opened last summer south of Stockton, also brought thousands of jobs to the Northern San Joaquin Valley.

“They’ve been hiring hundreds of people every month, and that’s really helping the region,” Michael said of the prison, which formally is called the California Health Care Facility, Stockton.

Stanislaus’ next big hiring surge may be in the construction trades. “We’ll start to see some improvement in the new home market, which will have an effect on jobs,” Michael said. “Housing construction has been more or less shut down for the last five or six years. But during the next three years, we’re going to see a transformation as the housing market goes from being dead to being back to normal.”

Home values also are expected to rise throughout the region.

“That’s going to relieve some of the economic distress because homeowners will feel a little richer,” said Michael, explaining how increasing home values boost consumer confidence and spur spending.

UOP’s once-a-quarter economic forecast also predicts better times ahead for Merced and San Joaquin counties.

Employment is expected to grow 3.1 percent in Merced and 3.7 percent in San Joaquin this year. California jobs, in contrast, are projected to increase by only 1.6 percent.

“Some of this significant growth is simply an outcome of rebounding from the lowest bottom,” the forecast cautions.

Merced, San Joaquin and Stanislaus unemployment rates are expected to remain far higher than the statewide average for years to come, however.

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