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San Diego’s Unemployment Rate Falls To 7.7 Percent
Tuesday, April 23, 2013
Alan Gin, Professor of Economics, University of San Diego, author of USD's Index of Leading Economic Indicators
Erik Bruvold, President, National University System for Policy Research
San Diego's economic outlook has been getting brighter and new numbers on unemployment have added to the optimism. The county's unemployment rate dropped to 7.7 percent last month, the first time the rate has dropped below 8 percent in more than four years.
Earlier this month, we heard that the region's index of leading economy indicators jumped nearly a full point in March. It's all definitely good news, but questions remain about the types of jobs being created in San Diego and the potential effects of government spending cuts.
"It's not time to have a toast, it's not time to pop the champagne cork. It might be time to find the bottle opener," said Erik Bruvold, President of National University System for Policy Research.
Since last year, more than 30,000 jobs have been added to the local economy. San Diego's scientific and professional areas, along with the hospitality and leisure sectors have all seen upticks in hiring. There's also been job growth in temporary services.
But despite the gains, employers may still be cautious about adding jobs to their payrolls.
"What wee seen at the early stages of a recovery is that one of the first sectors that expands are the temporary jobs. And anecdotally what we hear from the folks that own and manage those companies is that they're doing a tryout period with these employees, and over time we'll start to see job growth as people move into full-time employment," said Bruvold.
Alan Gin, Professor of Economics at the University of San Diego and author of USD's Index of Leading Economic Indicators believes the local economy reached a major turning point a few months ago.
"In 2009, we lost almost 70,000 jobs in the local economy. So 30,000 jobs gained and good, but it's going to take us a while to get back. If we're able to add 30,000 jobs this year, that would be the best number since 2000. But we are in such a deep hole, we're still in a bad situation. But we're getting better," said Gin.
And there's still the question about sequestration. Could federal spending cuts put a halt the region's recovery ? Gin doesn't seem to think so.
"I think sequestration will slow our economy, but I don't think it's going to be enough to derail it. I think we've got enough strength in the local economy to withstand this. The numbers would be higher without the sequestration, but we're not going to go into another recession."
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