Calif. Job Growth Expected to Rise

Job creation in California will speed up next year but housing prices in the state are expected to fall, according to an economic forecast released Wednesday by Chapman University.

Thanks to stronger overall economic growth and increases in construction spending and real exports, California payroll employment growth will increase from a rate of 0.4% in this year’s first quarter to a peak of 1.8% in next year’s second quarter, Chapman’s A. Gary Anderson Center for Economic Research said.

Overall, the state will add 172,000 payroll jobs in 2004, an increase of 1.2%, and 238,000 next year, a boost of 1.6%, the forecast said.

The forecast of accelerating job creation mirrors expectations of other economists. California enjoyed a third straight month of job increases in May, the first such hiring streak in three years, according to government figures released Monday.

However, a rise in new-housing supplies and higher mortgage rates will lead to a drop in home prices in the latter part of this year that will continue next year, the Chapman forecast said.

Home prices will decline 4.4% next year, after a 3.1% rise this year and 17% gain in 2003, Chapman said.