CENTER FOR BUSINESS AND POLICY RESEARCH. January California & Metro UNIVERSITY OF THE PACIFIC EBERHARDT SCHOOL OF BUSINESS

Transcription

1 CENTER FOR BUSINESS AND POLICY RESEARCH January 2016 California & Metro UNIVERSITY OF THE PACIFIC EBERHARDT SCHOOL OF BUSINESS

2 CENTER FOR BUSINESS AND POLICY RESEARCH Del Norte Siskiyou Modoc Humboldt Trinity Shasta Lassen Tehama Plumas Mendocino Glenn Butte Sierra Nevada Lake Colusa Sutter Yuba Placer Sonoma San Francisco Marin San Mateo Napa Yolo Solano Contra Costa Alameda Santa Clara Sacramento San Joaquin El Dorado Amador Stanislaus Calaveras Merced Alpine Tuolumne Mariposa Madera Mono Santa Cruz San Benito Fresno Inyo Monterey Kings Tulare California & Metro Forecast is published by the Center for Business and Policy Research University of the Pacific Eberhardt School of Business San Luis Obispo Kern San Bernardino Santa Barbara Web Stockton Sacramento Go.Pacific.edu/CBPR Ventura Los Angeles Staff Dr. Jeffrey A. Michael, Director Dr. Thomas Pogue, Associate Director Nahila Ahsan, Research Analyst Jesse Neumann, Economic Research Analyst Neriah Howard, Student Researcher Anjul Shingal, Student Researcher Sydney Stanfill, Student Researcher Santa Barbara Ventura Santa Barbara Los Angeles Orange San Diego Riverside Imperial UNIVERSITY OF THE PACIFIC EBERHARDT SCHOOL OF BUSINESS

3 California & Metro January 2016 Published quarterly by the Center for Business and Policy Research at the University of the Pacific Eberhardt School of Business. Copyright 2016 Center for Business and Policy Research. All rights reserved. This forecast was prepared based upon assumptions reflecting the Center s judgments as of the date it bears. Actual results could vary materially from the forecast. Neither the Center for Business and Policy Research nor The Regents of the University of the Pacific shall be held responsible as a consequence of any such variance. Unless approved by the Center for Business and Policy Research, the publication or distribution of this forecast and the preparation, publication or distribution of any excerpts from this forecast are prohibited.

4 Contents California Highlights... 5 Forecast Summary California Forecast Tables California Forecast Charts Fresno MSA Merced MSA Modesto MSA Oakland MSA Sacramento MSA San Francisco MSA San Jose MSA Stockton MSA

5 FORECAST HIGHLIGHTS Highlights of the January 2016 California Forecast California is forecast to experience 3.5% growth in real gross state product over the next 12 months and maintain steady GSP growth near 3% growth through The California unemployment rate has fallen to 5.8%. We expect the unemployment rate to continue to drop gradually over the next two years before stabilizing around 5%. Nonfarm payroll jobs have grown at a strong 3% pace for the past three years, but we project more moderate 2.1% growth in Job growth will slow further in 2017 and 2018 as the economy approaches full employment, as 1% growth will be sufficient to keep pace with population and labor force growth. Health Services has become the largest employment sector in the state and is projected to add an additional 60,000 positions across California in Professional Scientific & Technical Services is a high-paying sector that has fueled the recovery, having fully recovered pre-recession employment over three years ago. Growth in this sector will continue but as a slower pace as the cost and labor constraints begin to slow Silicon Valley growth in Growing tourism and a gradual shift in consumer spending from retail to restaurants has led the Leisure and Hospitality sector to exceed 4% job growth in each of the past 4 years and is projected to add an additional 20,000 jobs in State and local government employment is growing again and should add about 30,000 jobs statewide in each of the next several years. State and local government payrolls in California will finally regain their 2008 level in about two years. About 40,000 new Construction jobs are anticipated in each of the next three years, about a 5% annual growth rate. Despite this expected growth, there will still be fewer Construction jobs in 2020 than before the recession. Single-family housing starts are beginning to increase, falling just short of 50,000 units in We project a substantial increase over the next two years, to 66,000 in 2016, 85,000 units in 2017, before stabilizing near 90,000 units beyond Multi-family housing starts have recovered pre-recession levels and are projected to gradually increase from 50,000 units in 2015 to 60,000 units by The severe drought has had a relatively small statewide economic impact. We estimate total drought-related losses in 2015 at $3-4 billion, less than 0.2% of state GDP. The El Niño fueled rainy season is off to a promising start, but we don t anticipate any significant statewide economic boost if the drought abates. Center for Business and Policy Research 5

6 FORECAST SUMMARY California Outlook A slowing global economy and a sudden drop in stock and commodity markets to open the year have not changed our outlook for steady growth in the California economy. After multiple delays, the Fed made its long anticipated initial increase to shortrun interest rates in December. With inflation still running well below the 2% target and increasingly volatile global markets, it is expected that the pace of additional interest rate increases will be extremely slow. While many macroeconomic leading indicators such as the stock market and new manufacturing orders are showing a slow-down in economic activity and increasing risk of recession, other indicators such as employment growth and bond yield curves suggest a more positive outlook. With real wages finally growing and a boost from historically low debt burdens and gasoline costs, U.S. and California households are in a good position to sustain improved consumer spending. California is experiencing substantially faster job growth than the rest of the U.S., and we are expecting the State s economy to maintain steady 3% growth for the next several years even as the pace of job growth slows from 3% to a still solid 2% in After 2016, job growth is forecast to remain positive but slowly decelerate towards 1% as the unemployment rate stabilizes around a 5% rate. Significantly faster growth would require higher population growth which seems unlikely given the state s extremely high cost of living and building housing shortage. While we expect housing construction to continue its recovery, increasing 50% over the next three years and provide a significant economic boost to inland areas, this will barely be enough to accommodate a projected 1% population growth rate for California. Despite some challenges, our overall California forecast remains very positive as the last remnants of the Great Recession fall away. However, as we enter 2016, it should be noted that the risks to this positive outlook are increasing These risks are not new. For the past two years, we have identified the primary risks as a global recession and a disruption to the innovation and technology economy in the Bay Area that has driven so much of California s growth. The much discussed problems in China and emerging economies and financial market volatility increase these risks, and as many analysts have noted, the length of the expansion is getting towards the point where we have historically seen recessions if business cycles were to follow historical Table 1. California Annual Forecast Summary Real Gross State Product (% change) Non-Farm Payroll Employment (% change) Unemployment Rate (%) Housing Starts (thousands) California & Metro Forecast January 2016

7 FORECAST SUMMARY timing patterns. Thus, while risks are increasing, it still seems likely that the strengths of the California economy will maintain its steady, albeit modest, growth through this increased uncertainty. THE REGIONAL OUTLOOK San Joaquin and Alameda Counties led the state in population growth in 2014 and 2015, and largely as a result, we expect the Oakland and Stockton metropolitan areas to lead Northern California job growth in 2016 after five years of San Francisco and San Jose posting the fastest growth. While we expect a slow-down from incredible growth rates of recent years in Peninsula, it should be noted that the Silicon Valley economy is still the driving force behind much of this inland growth. Extreme housing costs are once again pushing households inland. Recent data shows net commuter income is up sharply, especially in San Joaquin County, supporting growth in hospitality, healthcare, trade, state and local government, and construction. While this growth has not and is not expected to reach the pace of the late 1990s and early Table 2. Central Valley Metro Forecast Summary Metro Area Non-farm Payroll Employment (% change) Unemployment Rate (%) Sacramento Stockton Modesto Merced Fresno California NOTE: Sacramento MSA includes Sacramento, El Dorado, Placer, and Yolo Counties. Stockton, Merced, Fresno and Modesto MSAs correspond to San Joaquin, Merced, Fresno and Stanislaus Counties. Table 3. Bay Area Metro Forecast Summary Metro Area Non-farm Payroll Employment (% change) Unemployment Rate (%) San Francisco San Jose Oakland California NOTE: San Francisco MSA includes San Francisco and San Mateo counties. Oakland MSA includes Contra Costa and Alameda Counties. San Jose MSA includes Santa Clara and San Benito Counties. Center for Business and Policy Research 7

8 FORECAST SUMMARY 2000s, it is clear that the Northern California megaregion is becoming increasingly inter-connected. After four years of incredible job growth exceeding a 4% annual rate, we expect both San Francisco and San Jose will see a large decrease in the pace of growth in 2016 to 2.1%. With the unemployment rate below 4% in San Francisco and San Jose and likely to drop below 4% by the end of the year in the primary commuter market of the East Bay, and extreme housing costs limiting population growth, even the growth of a tech oriented economy like Silicon Valley is being constrained by limited resources. Slower growth does not necessarily mean a negative forecast Job growth will remain solid, and income growth should remain strong in a region that already has the highest wages in the country. The outward push from the Bay Area is projected to increase job growth in Oakland to nearly 3% in 2016, while the Stockton area could see gains nearing 4% with the strongest growth in the southern part of San Joaquin County closest to the Altamont pass. Other areas in the San Joaquin Valley further from the Bay Area will see somewhat slower job growth in 2016, ranging from 1% in Merced to nearly 3% in Fresno which will get some boost in construction as activity on the first segment of high-speed rail construction is expected to pick up significantly in Merced s growth should pick up in 2017 and beyond as further expansion of UC Merced will drive some employment growth in the smallest metro economy in our forecast While the drought has had some economic impacts in parts of the Central Valley agricultural economy, overall agriculture production has remained near record levels and drought impacts have not been large enough to prevent growth in the regional economy in spite of some media reports of devastation. So far the rainy season is off to a positive start and could provide some relief in 2016, but it is too early to make predictions at this point and the May forecast update will include more extended discussion of drought impacts. As discussed in previous forecasts, Sacramento has been a bit of a laggard in the recovery. Sacramento finally surpassed its pre-recession level of employment in the 4th quarter of 2015, the last major metro area in the state to achieve this milestone. While there is a huge amount of optimism around revitalization in downtown Sacramento, and the area holds considerable promise for the future, the regional economy remains dominated by government, healthcare, and real estate. The biggest business story in the past five years has been the retention of a professional basketball team and the replacement of an outdated arena. As a result, we see continued steady but unspectacular growth for the Sacramento region driven by continued improvement in state government finances and a recovering real estate market. THE IMPACT OF MINIMUM WAGE INCREASES The minimum wage may be the hottest economic issue in California and is getting increasing attention in the national discussion. The state of California minimum wage increased to $10 on January 1, capping a 25% increase from $8 to $10 over the course of eighteen months while the national minimum wage remains at $7.25. In addition, there are multiple statewide ballot initiatives in the work that could put an increase to $15 in front of California voters soon, and it is a safe bet that there will be bills in the state legislature attempting to pass further increases before any initiatives make it to voters. A number of cities have already passed local ordinances that go beyond the state minimum wage, most notably San Francisco where the minimum is already $12.25 and will rise to $15 by Most local ordinances have been in high-income coastal cities, but this fall the lower-cost inland city of Sacramento passed an increase to $12.50 phased in through The minimum wage has many potential economic effects, but the most direct and beneficial effect is 8 California & Metro Forecast January 2016

9 FORECAST SUMMARY to raise the incomes of low-wage workers. The 25% increase enjoyed by a minimum wage worker over the past 18 months is an enormous raise for the average worker in percentage terms and can make a large difference in living standards for many low-income households. These low-income workers are more likely to spend their increased earnings than other workers, potentially providing an additional boost to the local economy. These benefits can be significant, particularly in places like the Central Valley where a large number of jobs pay at or near the minimum wage. But as economists are fond of saying, there is no free lunch. The cost burden of the minimum wage will generally occur in one of three ways. Consumers may pay the cost in higher prices for goods and services, employers may absorb the cost and thus receive lower profits, or some workers will bear the cost through fewer jobs or hours worked if higher prices reduce sales or employers shift to less labor-intensive production methods. Proponents of the minimum wage generally argue that the main effects are through small increases in prices or decreased profits of employers, and thus the minimum wage has their desired impact of reducing income inequality with minimal distortionary effects on the economy. Opponents argue that the main impacts are fewer jobs and higher unemployment, that the minimum wage hurts the competitiveness of the local economy, and is an inefficient means to help low-income households since not all minimum wage workers, such as students, are in poor households. The magnitude and shape of these costs is the current subject of much debate and research in economics. Proponents case has been supported in recent years by research that shows that small changes in the minimum wage have had little if any, negative effect on employment in the restaurant industry. At least in the short-run, it appears that restaurant owners are passing some of the costs along in higher prices and absorbing some in lower profits. However, the size and scope of minimum wage increases currently underway and those proposed are much larger and could have very different effects especially in the long-run. While it is too early to know the effects, we can anticipate that the effects will be different by industry due to their varying characteristics. For instance, the hospitality industry is a large and growing employment sector with many low-wage jobs. Because most restaurants are serving a local market and their competitors are subject to the same cost pressures, restaurants should have more ability to increase prices to pay for higher wages. However, the large minimum wage increases currently proposed could lead to price increases large enough to encourage more people to pack their lunches and cook at home Restaurants could shift to less labor-intensive formats such as counter rather than table service or deploy technology that allows customers to order and pay electronically at their table, not unlike an ATMs or pay at the pump gas stations. At a recent conference, one economist argued that minimum wage increases would give chain restaurants a comparative advantage over local eateries because they tend to utilize less labor intensive food preparation and may have more ability to deploy technology. While there is little evidence of these effects in historical episodes of small wage increases, a move towards a $15 an hour minimum wage would likely spur large changes to the industry. Agriculture is another large industry with many low/minimum wage jobs in the Central Valley. Most farmers are what economists call price takers because they sell into global markets and have little ability to set their own prices. Thus, farmers have limited ability to raise costs. In recent years, farm prices and profits have been very strong, and we expect most farmers will absorb higher labor costs. Recent data seems to back this up as both farm wages and employment have been growing. A big increase in farm prices and revenue from led to record Center for Business and Policy Research 9

10 FORECAST SUMMARY profits and income for Valley farms. Since 2012, net farm income has been relatively flat as rising wages and other costs have consumed much of farms recent revenue growth. However, further increases to the minimum wage could lead to substantial changes to the agriculture industry. California farmers are already facing stiff foreign competition for laborintensive fruit and vegetable crops, and increases in the minimum wage could lead to further crop shifts. California agriculture is already shifting towards more capital and technology intensive methods that lead to higher-paying and higher-productivity jobs. A higher minimum wage could accelerate the shift towards better, higher-paying agricultural jobs that would benefit the Valley s economic development even if it meant fewer farm jobs overall. Another large and fast-growing source of low and minimum wage employment are home health care workers. These positions are often funded with public money, so there is limited ability to bear the cost of minimum wages through raising prices or reduced profits. Instead, the minimum wage will put strains on public budgets which could result in fewer health care workers being employed or reduced funding for other public programs. Thus, the strain on public budgets could result in some harm to lower-income families that would offset some of the benefits they could receive from the minimum wage. In sum, changes to the minimum wage are likely to have large effects on the California economy, both positive and negative. The effects will be especially large if the minimum wage is increased to $15 per hour statewide as advocated by many, but it is hard to predict the shape and extent of the impacts from a policy change that is so far outside our previous experience. CBPR will be monitoring the effects and provide updates in this forecast as more information becomes available. 10 California & Metro Forecast January 2016

11 CALIFORNIA TABLES Table 1. Annual Summary of the University of Pacific Forecast for California Personal Income and Gross State Product Personal Income (Bil. $) Calif. (%Ch) Real Personal Income (Bil. 2009$) (%Ch) Real Disposable Income (Bil. 2009$) (%Ch) Gross State Product (Bil. $) Calif. (%Ch) Real GSP (Bil. 2009$) Calif. (%Ch) Employment and Labor Force (Household Survey % Change) Employment Labor Force CA Unemployment Rate (%) Nonfarm Employment (Payroll Survey % Change) Total Nonfarm California Mining Construction Manufacturing Nondurable Goods Durable Goods Trans. Warehs. & Utility Wholesale Trade Retail Trade Financial Activities Prof. and Business Services Edu & Health Services Leisure & Hospitality Information Federal Gov't State & Local Gov't Population and Migration Population (thous) (%Ch) Net Migration (quarterly rate, thous.) Housing Housing Starts Tot. Private (Annual Rate, Ths.) Housing Starts Single Family Housing Starts Multi-Family Consumer Prices (%Ch) * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 11

12 CALIFORNIA TABLES Table 2. Quarterly Summary of the University of Pacific Forecast for California 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Personal Income and Gross State Product Personal Income (Bil. $) Calif. (%Ch) Real Personal Income (Bil. $) (%Ch) Real Disposable Income (Bil. $) (%Ch) Gross State Product (Bil. $) Calif. (%Ch) Real GSP (Bil. 2009$) Calif. (%Ch) Employment and Labor Force (Household Survey % Change) Employment Labor Force CA Unemployment Rate (%) Non-farm Employment (Payroll Survey % Change) Total Non-farm California Mining Construction Manufacturing Nondurable Goods Durable Goods Trans. Warehs. & Utility Wholesale Trade Retail Trade Financial Activities Prof. and Business Services Edu. & Health Services Leisure & Hospitality Information Federal Gov't State & Local Gov't Population and Migration Population (Ths.) (%Ch) Net Migration (Ths.) Housing Housing Starts Tot. Private (Annual Rate, Ths.) Housing Starts Single Family Housing Starts Multi-Family Consumer Prices (%Ch) * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 12 California & Metro Forecast January 2016

13 CALIFORNIA TABLES Table 2. Quarterly Summary of the University of Pacific Forecast for California 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 Personal Income and Gross State Product Personal Income (Bil. $) Calif. (%Ch) Real Personal Income (Bil. $) (%Ch) Real Disposable Income (Bil. $) (%Ch) Gross State Product (Bil. $) Calif. (%Ch) Real GSP (Bil. 2009$) Calif. (%Ch) Employment and Labor Force (Household Survey % Change) Employment Labor Force CA Unemployment Rate (%) Non-farm Employment (Payroll Survey % Change) Total Non-farm California Mining Construction Manufacturing Nondurable Goods Durable Goods Trans. Warehs. & Utility Wholesale Trade Retail Trade Financial Activities Prof. and Business Services Edu. & Health Services Leisure & Hospitality Information Federal Gov't State & Local Gov't Population and Migration Population (Ths.) (%Ch) Net Migration (Ths.) Housing Housing Starts Tot. Private (Annual Rate, Ths.) Housing Starts Single Family Housing Starts Multi-Family Consumer Prices (%Ch) * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 13

14 CALIFORNIA TABLES Table 3. Employment Quarterly 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 California Payroll Employment (Thousands) Total Nonfarm Manufacturing Durable Goods Wood Products Computer & Electronics Transportation Equipment Nondurables Foods Non-Manufacturing Mining Construction Transportation, Warehouse & Util Wholesale Trade Retail Trade Information Prof. & Bus. Services Admin. & Support Prof. Sci. & Tech Mgmt. of Co Financial Activities Real Estate & Rent Finance & Insurance Education & Health Service Education Services Health Services Leisure & Hospitality Other Services Government Federal Gov't State & Local Gov't California & Metro Forecast January 2016

15 CALIFORNIA TABLES Table 3. Employment Quarterly 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 California Payroll Employment (Thousands) Total Nonfarm Manufacturing Durable Goods Wood Products Computer & Electronics Transportation Equipment Nondurables Foods Non-Manufacturing Mining Construction Transportation, Warehouse & Util Wholesale Trade Retail Trade Information Prof. & Bus. Services Admin. & Support Prof. Sci. & Tech Mgmt. of Co Financial Activities Real Estate & Rent Finance & Insurance Education & Health Service Education Services Health Services Leisure & Hospitality Other Services Government Federal Gov't State & Local Gov't Center for Business and Policy Research 15

16 CALIFORNIA TABLES Table 4. Employment Annual California Payroll Employment (Thousands) Total Nonfarm Manufacturing Durable Goods Wood Products Computer & Electronics Transportation Equipment Nondurables Foods Non-Manufacturing Mining Construction Trans., Warehouse & Util Wholesale Trade Retail Trade Information Prof. & Bus. Services Admin. & Support Prof. Sci. & Tech Mgmt. of Co Financial Activities Real Estate & Rent Finance & Insurance Education & Health Service Education Services Health Services Leisure & Hospitality Other Services Government Federal Gov't State & Local Gov't California & Metro Forecast January 2016

17 CALIFORNIA TABLES Table 5. Personal Income - Quarterly 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Personal Income (Bil. $) Wages & Salaries Other Labor Income Nonfarm Farm Property Income Transfer Payments Real Personal Income (Bil. $) Wages & Salaries Other Labor Income Nonfarm Farm Property Income Transfer Payments New Passenger Car & Truck Reg Retail Sales (Bil. $) * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 17

18 CALIFORNIA TABLES Table 5. Personal Income - Quarterly 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 Personal Income (Bil. $) Wages & Salaries Other Labor Income Nonfarm Farm Property Income Transfer Payments Real Personal Income (Bil. $) Wages & Salaries Other Labor Income Nonfarm Farm Property Income Transfer Payments New Passenger Car & Truck Reg Retail Sales (Bil. $) * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 18 California & Metro Forecast January 2016

19 CALIFORNIA TABLES Table 6. Personal Income - Annual Billions Current Dollars Personal Income Wages & Salaries Other Labor Income Nonfarm Farm Property Income Transfer Payments Billions 2009 $ Personal Income Wages & Salaries Other Labor Income Nonfarm Farm Property Income Transfer Payments New Passenger Car & Truck Reg Retail Sales (Billions $) Real Retail Sales (Billions 2009$) * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 19

20 CHARTS

21 CALIFORNIA CHARTS California Real Personal Income (percent change from one year ago) 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% 10% California Real Gross State Product (percent change from one year ago) 8% 6% 4% 2% 0% -2% -4% -6% -8% 14% California Unemployment Rates (percent) 12% 10% 8% 6% 4% 2% 0% Center for Business and Policy Research 21

22 CALIFORNIA CHARTS 17,500 California Total Nonfarm Employment (Thousands) 17,000 16,500 16,000 15,500 15,000 14,500 14,000 13,500 13,000 1,100 California Construction Employment (Thouands) 1, ,000 California Manufacturing Employment (Thousands) 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1, California & Metro Forecast January 2016

23 CALIFORNIA CHARTS 700 California Trade, Transportation, and Utilities Employment (Thousands) ,000 California Financial Activities Employment (Thouands) ,100 California Professional and Business Employment (Thousands) 2,900 2,700 2,500 2,300 2,100 1,900 1,700 Center for Business and Policy Research 23

24 CALIFORNIA CHARTS 2,900 California Education and Health Services Employment (Thousands) 2,700 2,500 2,300 2,100 1,900 1,700 1,500 1, California Information Employment (Thousands) ,400 California State and Local Government Employment (Thousands) 2,300 2,200 2,100 2,000 1,900 1,800 1,700 1,600 1, California & Metro Forecast January 2016

25 CALIFORNIA CHARTS 300 California Federal Government Employment (Thousands) California Housing Starts (Thousands) ,500 California New Passenger & Light Truck Registrations (Thousands) 2,300 2,100 1,900 1,700 1,500 1,300 1, Center for Business and Policy Research 25

26 METROS

27 Fresno MSA SHORT TERM OUTLOOK Nonfarm employment in the Fresno Metropolitan Statistical Area (MSA) is expected to grow by 2.8% for Nonfarm employment in the first and second quarters of 2016 is expected to have a 2.6% and 3.5% increase in employment followed by 2.7% growth in the third quarter and 2.6% in the fourth quarter. The sectors that will lead employment growth in 2016 are as follows: Construction & Mining at 15.2% growth, Leisure & Hospitality at 5.4% growth, and Education & Health Services at 5.3% growth. Employment is expected to increase in all sectors except for the Trade, Transportation & Utilities sector, the Professional & Business Services sector, and the Federal Government sector. The Financial Activities sector is forecasted to have less than 0.3% growth in 2016 and will then see declines between 2017 and Real personal income in Fresno is expected to grow 3.7%, or $30.9 Billion in 2016 or a 3.7% growth rate from the previous year $31.9 Billion in 2017 or a 3.4% growth rate. The Fresno MSA s population is expected to reach 986,800 in 2016 and will grow 1.0% in 2017 and 1.3% in An increase in the labor force in 2016 of 0.6% is also expected. The labor force is projected to maintain about a 1.5% growth rate for both 2017 and The unemployment rate in 2016 is expected to decrease to 9.4% from 9.9% in Unemployment is expected to continue decreasing every year for the foreseeable future, declining to 8.4% in % Fresno Real Personal Income (percent change from one year ago) 360 Fresno Payroll Employment (Thousands) 8% % 300 4% 280 2% 260 0% 240-2% % 18% 16% 14% 12% 10% 8% 6% 4% 2% Fresno Unemployment Rates (percent) 0% Fresno Employment Mix Relative to California, 2014 (California = 100) Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 27

28 METRO SUMMARY - FRESNO Quarterly Outlook for Fresno January 2016 Forecast 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 28 California & Metro Forecast January 2016

29 METRO SUMMARY - FRESNO Quarterly Outlook for Fresno January 2016 Forecast 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 29

30 METRO SUMMARY - FRESNO Annual Outlook for Fresno January 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 30 California & Metro Forecast January 2016

31 METRO SUMMARY - FRESNO Merced MSA SHORT TERM OUTLOOK Nonfarm employment in the Merced MSA will increase by 0.9% in 2016 and is expected to grow an average of 1.8% each year between 2016 and Growth is expected in most sectors in 2016, with the exception of the Information, Manufacturing, Professional & Business Services, and Leisure & Hospitality sectors. Despite their negative growth in 2016 all of these sectors are expected to see positive growth from 2017 to Leading in 2016 employment growth rates are sectors Construction & Mining at 8.3% and State & Local Government at 5.9%. Real personal income in Merced is expected to increase to $7.9 Billion dollars in 2016, a 2.8% increase from the previous year. This increase is accompanied with a 2.3% increase in average annual wage from $47,900 in 2015 to $49,000 in The population in Merced area is expected to reach 274,600 in 2016 and will grow by a further 1.5% in The labor force growth is expected to be -0.4% in the first quarter of 2016 but have an overall annual growth of 0.6% in The unemployment rate is expected to be at 10.5% in 2016 and will decrease over the years reaching 9% in Merced Real Personal Income (percent change from one year ago) Merced Payroll Employment (Thousands) 15% % 65 5% % 50-5% 45-10% 40 20% 18% 16% 14% Merced Unemployment Rates (percent) Merced Employment Mix Relative to California, 2014 (California = 100) 12% % 80 8% 60 6% 40 4% 20 2% 0% 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 31

32 METRO SUMMARY - MERCED Quarterly Outlook for Merced January 2016 Forecast 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 32 California & Metro Forecast January 2016

33 METRO SUMMARY - MERCED Quarterly Outlook for Merced January 2016 Forecast 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 33

34 METRO SUMMARY - MERCED Annual Outlook for Merced January 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 34 California & Metro Forecast January 2016

35 Modesto MSA SHORT TERM OUTLOOK Non-Farm employment in the Modesto MSA is expected to grow 2.7% in 2016 and in the first quarter of 2016 grow by 2.6%. The end of 2015 is expected to see high employment growth rates in the Construction & Mining with a rate of 16.3% in the first quarter. Construction & Mining is trailed by a distant second sector, Manufacturing at 6.4%. Notable sectors experiencing negative growth in the first quarter of 2016 include Professional & Business Services at -4.8% and Financial Activities at -5%. Real personal income is expected to increase 3.6% in 2016 to $17.2 Billion. It is predicted that real personal income increase over 3% between 2016 and The average annual wage will steadily increase from an annual rate of 2.4 % growth in 2016 to 4% growth in Population in the Modesto MSA is expected to reach 545,100 in 2016, an increase of 1.3% from The population is estimated to rise at similar rates each year through Modesto s labor force is expected to experience 1.5% growth in 2016 after experiencing two years of a decreasing rate. Unemployment in Modesto will decline to 8.7% in 2016 and will continue to decline reaching 8.2% in % Modesto Real Personal Income (percent change from one year ago) 190 Modesto Payroll Employment (Thousands) 8% 180 6% 4% % 140 0% -2% % -6% % 17% 15% 13% 11% 9% 7% Modesto Unemployment Rates (percent) Modesto Employment Mix Relative to California, 2014 (California = 100) 5% 3% 20 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 35

36 METRO SUMMARY - MODESTO Quarterly Outlook for Modesto January 2016 Forecast 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 36 California & Metro Forecast January 2016

37 METRO SUMMARY - MODESTO Quarterly Outlook for Modesto January 2016 Forecast 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 37

38 METRO SUMMARY - MODESTO Annual Outlook for Modesto January 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 38 California & Metro Forecast January 2016

39 Oakland MSA SHORT TERM OUTLOOK Nonfarm employment in the Oakland MSA is expected to increase an overall 2.9% in 2016, with the most growth expected in the second quarter at 3.4%. It is expected that the Construction & Mining and Information sectors experience the largest employment growth in 2016 at 6.4 % and 4.7%. All sectors are expected to see positive growth with the exception of the Federal Government sector with is calculated to see -0.7% growth. Steady annual decreases in employment are expected in the Federal Government, Other Services and Financial Services sector from 2017 to Real personal income for 2016 is expected to increase to $143.6 Billion, a 3.4% increase from Real personal income is expected to grow over 3% each year between 2016 and The Oakland MSA population is expected grow 1.5% for 2016 coming in at a total of 2,810,700. Unemployment in Oakland is expected to decrease to 4.1% in 2015, down from 6.0% in 2014 and will continue to decrease in the foreseeable future until it reaches 3.7% in Additionally, the labor force will experience a 1.6% increase in Oakland Real Personal Income (Percent change from one year ago) Oakland Payroll Employment (Thousands) 12% % % % % % % -2% -4% -6% -8% % Oakland Unemployment Rates (percent) Oakland Employment Mix Relative to California, 2014 (California = 100) 10% % % 80 4% % 0% 20 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 39

40 METRO SUMMARY - OAKLAND Quarterly Outlook for Oakland January 2016 Forecast 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income* Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income* Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 40 California & Metro Forecast January 2016

41 METRO SUMMARY - OAKLAND Quarterly Outlook for Oakland January 2016 Forecast 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income* Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income* Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 41

42 METRO SUMMARY - OAKLAND Annual Outlook for Oakland January 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income* Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income* Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 42 California & Metro Forecast January 2016

43 Sacramento MSA SHORT TERM OUTLOOK The Sacramento area is experiencing non-farm employment growth of 2.3% in 2015 and is expected to see a 2.1% growth in the first quarter of This is a slight decrease in growth compared to what Sacramento saw in 2015, and it is a part of continuous decline expected to be seen through 2020 with an average growth rate of 1.8%. When comparing growth among the sectors, the largest growth in 2016 will be in the Construction & Mining (6.1%) and Information (5.7%) in The Information sector, which has seen negative employment rates the past few years sees this high growth rate, but is predicted to have decrease in growth in 2020 of 1.8%. Real personal income in the Sacramento MSA is total to 3.5% growth in 2016, bringing real personal income in 2016 to a total of $93.2 Billion. An average increase of 3.5% is anticipated for the next five years, bringing real personal income to $107.1 Billion in The Sacramento MSA population will increase by 1.3% in 2016 and is expected to increase by an average rate of 1.4% through The Sacramento labor force will grow to 1.4% in 2016 after a low rate of 0.6% in The unemployment rate will continue to decrease and is expected to decline to 4.7% in Sacramento Real Personal Income (percent change from one year ago) Sacramento Payroll Employment (Thousands) 10% % 950 6% 900 4% 850 2% 800 0% 750-2% -4% % Sacramento Unemployment Rate (percent) Sacramento Employment Mix Relative to California, 2014 (California = 100) 12% % % 80 6% % 20 2% 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 43

44 METRO SUMMARY - SACRAMENTO Quarterly Outlook for Sacramento January 2016 Forecast 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income (09$) Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income (09$) Average Annual Wage (Ths) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths) Pct Chg Year Ago Labor Force (Ths) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 44 California & Metro Forecast January 2016

45 METRO SUMMARY - SACRAMENTO Quarterly Outlook for Sacramento January 2016 Forecast 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income (09$) Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income (09$) Average Annual Wage (Ths) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths) Pct Chg Year Ago Labor Force (Ths) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 45

46 METRO SUMMARY - SACRAMENTO Annual Outlook for Sacramento January 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income (09$) Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income (09$) Average Annual Wage (Ths) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths) Pct Chg Year Ago Labor Force (Ths) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 46 California & Metro Forecast January 2016

47 San Francisco MSA SHORT TERM OUTLOOK Nonfarm employment in the San Francisco MSA is expected to grow by 2.1% in 2016, which is down from the 4.3% growth seen in In the first quarter of 2016, job growth in nonfarm employment is expected to be 2.8%, but by the fourth quarter of 2016 will drop to 1.8%. When comparing employment rates between sectors in 2016, the following sectors lead growth: Construction & Mining (12%), Information (5%), and Education & Health Services (3.4%). While these sectors have seen reasonable growth, the sectors Manufacturing, Leisure & Hospitality, Other Services, and Federal Government all are expected to see negative growth rates in Real Personal Income is expected grow 3.9% in 2016 and will average around 3.8% through Real Per Capita Income is expected to increase and will reach an estimated $90,600 in The San Francisco MSA population is expected to reach 1,647,100 in 2016, an increase of 0.9% from the previous year. The labor force growth rate for 2016 is estimated to be 1.7% which is the highest rate between 2016 and The unemployment rate is expected to continue to decline, reaching 3.2% in 2016 and 2.9% in San Francisco Real Personal Income (percent change from one year ago) San Francisco Payroll Employment (Thousands) 20% % % % % -5% % % % San Francisco Unemployment Rates (percent) San Francisco Employment Mix Relative to California, 2014 (California = 100) 11% % % 80 5% % 1% 20 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 47

48 METRO SUMMARY - SAN FRANCISCO Quarterly Outlook for San Francisco January 2016 Forecast 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income (2009$) Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income (2009$) Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 48 California & Metro Forecast January 2016

49 METRO SUMMARY - SAN FRANCISCO Quarterly Outlook for San Francisco January 2016 Forecast 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income (2009$) Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income (2009$) Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 49

50 METRO SUMMARY - SAN FRANCISCO Annual Outlook for San Francisco January 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income (2009$) Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income (2009$) Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 50 California & Metro Forecast January 2016

51 San Jose MSA SHORT TERM OUTLOOK Nonfarm employment in San Jose is expected to increase by 2.1% in 2016 and 2.5% in The leading sectors for employment growth in 2016 will be the Information sector at 5.4% growth followed by the Construction & Mining sector at 4.4% growth. Declines are expected to be seen in Manufacturing (-0.9%), the Financial Activities (-3.8%), and in the Federal Government (-1.4%) sectors. The Federal Government and Financial Activities sectors will see declines through 2019, while Manufacturing is expected to see positive growth in Real personal income is expected to grow to $131.4 billion, an increase of 4.1% in Between 2016 and 2017, real personal income is expected to grow 4.9%. By 2020, real personal income is expected to reach $154.8 billion The San Jose area population is expected to reach 2,006,340 in 2016 which is a growth of 1.2% from the previous year. The population will continue to grow between 1.1 and 1.2% annually through The labor force will grow by 1.8% in 2016 but 1.0% in The unemployment rate will decrease to 3.6% in 2016 and is expected to fall to 3.2% between 2018 and % San Jose Real Personal Income (percent change from one year ago) 1200 San Jose Payroll Employment (Thousands) 30% % 20% 15% 10% % 950 0% -5% % -15% % San Jose Unemployment Rates (percent) 250 San Jose Employment Mix Relative to California, 2014 (California = 100) 11% 200 9% 150 7% 100 5% 50 3% 1% 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 51

52 METRO SUMMARY - SAN JOSE Quarterly Outlook for San Jose January 2016 Forecast 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 52 California & Metro Forecast January 2016

53 METRO SUMMARY - SAN JOSE Quarterly Outlook for San Jose January 2016 Forecast 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 53

54 METRO SUMMARY - SAN JOSE Annual Outlook for San Jose January 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 54 California & Metro Forecast January 2016

55 Stockton MSA SHORT TERM OUTLOOK Nonfarm employment in the Stockton MSA is expected to increase 3.9% for 2016 and 4.2% in the first quarter of For the first quarter of 2016, leading employment sectors include State & Local Government, at 7.9% growth and Trade, Transportation & Utilities at 7.4%. Both of these sectors are projected to have leading employment growth throughout The Financial Activities and Manufacturing sectors are the only sectors in the Stockton MSA experiencing negative employment decline at -2.4% and -2.6%. The Financial Activities sector is projected to continue to see negative rates through Real personal income will increase by a rate of 3.5 % for 2016 equating to $23.1 Billion. Real personal income will continue to grow at a constant rate around 3% for the upcoming years. Per capita income will also consistently increase in the foreseeable future, along with the average annual wage, which has a forecasted change of 2.5% in Population in the Stockton MSA is expected to rise to approximately 738,200 in 2016 and will increase by 1.6% overall in 2016 through The labor force will increase by 1.5% in 2016, a notable change as there was an average of no growth for the past three years. After 2016, the labor force growth will continue to increase to 1.6% through 2019 and then dip back down to a 1.3% growth rate in The unemployment rate is expected to decrease from 10.6% in 2014 to 8.1% in This decrease in the unemployment rate will continue through the projected forecast until it reaches 7.3% in % Stockton Real Personal Income (percent change from one year ago) 250 Stockton Payroll Employment (Thousands) 8% % 220 4% % 190 0% % 160-4% % 16% 14% 12% 10% 8% Stockton Unemployment Rates (percent) Stockton Employment Mix Relative to California, 2014 (California = 100) 6% 4% 20 0 Con. Mfg. TTU Info. Fin. Bus. EHS Leis. OTS Gov. Center for Business and Policy Research 55

56 METRO SUMMARY - STOCKTON Quarterly Outlook for Stockton January 2016 Forecast 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3 2015Q4 2016Q1 2016Q2 2016Q3 2016Q4 2017Q1 2017Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income* Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income* Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 56 California & Metro Forecast January 2016

57 METRO SUMMARY - STOCKTON Quarterly Outlook for Stockton January 2016 Forecast 2017Q3 2017Q4 2018Q1 2018Q2 2018Q3 2018Q4 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 Personal Income (Annual Rate, Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income* Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income* Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts (Annual Rate) Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. Center for Business and Policy Research 57

58 METRO SUMMARY - STOCKTON Annual Outlook for Stockton January 2016 Forecast Personal Income (Billions $) Total Personal Income Pct Chg Year Ago Wages and Salaries Nonwage Income Real Personal Income* Pct Chg Year Ago Per Capita Income (Ths.) Real Per Capita Income* Average Annual Wage (Ths.) Pct Chg Year Ago Establishment Employment (Place of Work, Thousands, SA) Total Non-Farm Employment Pct Chg Year Ago Manufacturing Pct Chg Year Ago Nonmanufacturing Pct Chg Year Ago Construction & Mining Pct Chg Year Ago Trade, Trans, & Utilities Pct Chg Year Ago Wholesale Trade Retail Trade Trans, Wrhsng, & Util Information Pct Chg Year Ago Financial Activities Pct Chg Year Ago Prof & Business Services Pct Chg Year Ago Educ & Health Services Pct Chg Year Ago Leisure & Hospitality Pct Chg Year Ago Other Services Pct Chg Year Ago Federal Government Pct Chg Year Ago State & Local Government Pct Chg Year Ago Other Economic Indicators Population (Ths.) Pct Chg Year Ago Labor Force (Ths.) Pct Chg Year Ago Unemployment Rate (%) Total Housing Starts Single-Family Multifamily * Real personal income and real per capita income are adjusted for inflation and regional purchasing power parities. This facilitates interregional comparisons of income that control for the cost of living. 58 California & Metro Forecast January 2016

59 CENTER FOR BUSINESS AND POLICY RESEARCH University of the Pacific A national doctoral university, University of the Pacific is recognized for an education combining exceptional professional preparation in a student-centered tradition of close interactions between students and professors. With a core liberal arts college and eight professional schools, more than any university enrolling fewer than 10,000 students, Pacific offers professional opportunities associated with far larger institutions in the environment of a small learning community. Pacific is California s first chartered institution of higher learning, having received its articles of incorporation from the California Supreme Court on July 10, The University enrolls more than 5,600 students on three campuses situated in the Northern California cities of San Francisco, Stockton and Sacramento. President Pamela A. Eibeck Eberhardt School of Business The Eberhardt School of Business offers a Masters in Business Administration (MBA), Master of Accounting (MAcc), Bachelor of Science in Business Administration, Bachelor of Science in Accounting, and Minors in Management, Business Administration, and Information Systems to nearly 700 students. With an emphasis on interactive classes and studentfaculty engagement, the program is committed to developing successful future business leaders through a learning process that is personal, relevant, and professional. In addition to developing well-rounded and highly skilled graduates, the Eberhardt School of Business has demonstrated its commitment to community service and regional economic development through a variety of outreach programs and activities including the Center for Business and Policy Research, Career Management Center, Center for Entrepreneurship, Institute for Family Business, and Westgate Center for Management Development. Dean Lewis R. Gale Center for Business and Policy Research The Center for Business and Policy Research, founded in 2004 and housed in the Eberhardt School of Business, produces quarterly economic forecasts of California and 8 metropolitan areas from Sacramento to Fresno to the San Francisco Bay Area. In addition to its forecasting program, the Center conducts policy and planning studies on topics such as water, transportation, housing, and economic development for public and private clients throughout Northern California. Jeffrey A. Michael, Ph.D. Director, Center for Business and Policy Research Ph.D., North Carolina State University; M.S., University of Maine; B.A., Hamilton College (NY) Dr. Jeffrey Michael is Director of the Center for Business and Policy Research and Associate Professor in the Eberhardt School of Business at the University of the Pacific. Jeff s areas of expertise include regional economic forecasting and environmental economics including work on the economic impacts of the Endangered Species Act, climate change, and regulation on land use, property values and employment growth. His research has received numerous grants, been published in scholarly journals and received local and national press coverage including the Wall Street Journal, New York Times Magazine, San Francisco Chronicle, Washington Post, NPR, and PBS. Prior to joining Pacific in 2008, Jeff was faculty at Towson University in Maryland where he served as Director of the Center for Applied Business and Economic Research, Associate Dean, and faculty. Jeff received his Ph.D. from North Carolina State University, M.S. from the University of Maine, and B.A. from Hamilton College (NY). UNIVERSITY OF THE PACIFIC EBERHARDT SCHOOL OF BUSINESS

60 University of the Pacific Eberhardt School of Business Sacramento Office: th Avenue Sacramento, CA Stockton Office: 3601 Pacific Avenue Stockton, CA Go.Pacific.edu/CBPR