In this issue we are rolling out our new expanded analysis of the Southern California economy. Coverage of Southern California will now include two separate publications of quarterly analysis within the region. The first publication will focus on the San Diego-Carlsbad metropolitan statistical area and the second on the Greater Los Angeles region, which includes the Los Angeles-Long Beach-Anaheim and Riverside-San Bernardino-Ontario metropolitan statistical areas.
The Greater Los Angeles labor markets continue to show signs of strength. The region is expected to add another 169,000 jobs in 2015. This is slightly slower than last year and follows the national trend of healthy, yet moderating job growth. Port activity rebounded in the second half of 2015. Total container volume was up 12 percent in August at the Port of Los Angeles and the Port of Long Beach. The Inland Empire has benefitted from the increase in trade and structural shift to online retail in the past few years. As a major logistical hub serving businesses such as Amazon, the Riverside metro area has seen strong employment growth which has outpaced the Los Angeles metro area since May of 2012. Combined, the two metro areas had an unemployment rate of 6.4 percent in July. This is well above the July U.S. average of 5.3 percent and indicates additional slack in the area labor markets.
Housing starts in the Greater Los Angeles are expected to increase by 41,910 in 2015, creating some relief in the region’s tight housing supply. Home price growth is expected to moderate to a more sustainable level by next year as it aligns itself with income growth. Homebuyers can still capitalize on low borrowing rates as California’s average 30 year-fixed-conforming mortgage is below 4.0 percent, according to American Banker.
Click here for the complete Greater Los Angeles Regional Economic Update: Los Angeles_2015_Q3.