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Omicron uncertainty weakens California jobs outlook – Times-Herald

Uncertainty about the coronavirus surrounding the Omicron variant has led UCLA Anderson Forcast economists to reduce employment growth and total employment forecasts for California in 2022.

According to Anderson Forcast, released Wednesday, this all means that next year’s salary employment will be lower than previously expected.

Due to the Omicron variant, Anderson Forcast economists have readjusted their predictions of how long the pandemic will suffer from the state’s employment market.

“The potential economic benefit of the emergence of the Omicron variant is the downside risk to our predictions,” they said in their latest report on the California economy.

Conclusion: The outlook looks weaker than it was just three months ago, according to a new assessment produced by UCLA Anderson Forcast Director Jerry Nickelsburg and Forecast Economist Leila Bengali.

“The new wave of winter infections should weaken the recovery rate from what was expected in the September 2021 forecast,” writes Nickelsburg and Bengali.

In September, Anderson Forcast predicted that California would employ an average of 17.23 million in 2022. December forecasts require 17.21 million jobs across the state next year.

Total salary employment is expected to increase 4.7% during 2022, a weaker growth rate than the 4.9% forecast announced in September.

The 2022 state unemployment rate is expected to average 5.6%, unchanged from the fall forecast.

However, the unemployment rate in 2021 is expected to average 7.7%, slightly worse than the September forecast of 7.6%, according to UCLA Anderson’s forecast.

Economists also warned that inflation would erode California’s personal income next year and the following year.

“Inflation will reduce real personal income to some extent,” writes Nickelsburg and Bengali.

Real personal income, adjusted for the effects of inflation in California, is expected to increase by 2.6% in 2021 but decrease by 2.2% in 2022.

Most of this is due to a 4% rise in consumer prices in 2021 and a 4.1% rise in 2022.

In other words, personal income will not be keeping up with rising inflationary pressures.

The uncertainties faced by the California economy are not expected to ease until the virus and its variants are ultimately controlled and appear to be only a minor health hazard.

“The increase in cases will reduce economic activity in some sectors as consumers are more wary of withdrawing or returning from face-to-face activities and travel,” economists said. “Employment growth slows in sectors with high personal contact and tourist sectors.”

Economists have warned that employment conditions across the state will not improve until at least mid-2022.

“We expect the labor market in the state to be headwinds from the end of this year to the beginning of next year,” economists predicted.

Omicron uncertainty weakens California jobs outlook – Times-Herald Source link Omicron uncertainty weakens California jobs outlook – Times-Herald

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