With the Great Recession firmly in the rear‐view mirror, and California’s economy well into its recovery, it’s a good time to assess both what is working in the state, and the greatest challenges that still lay ahead. The following forecast focuses on what’s right in today’s California, which areas need improvement, and where the state’s economy is headed over the next five years. What’s Right Cyclically? From a cyclical standpoint, many things are going well in California’s economy. Labor Markets: Employment in the state is growing consistently. In June 2014, California finally surpassed its pre‐recession employment peak, recovering all of the 1.35 million jobs lost during the downturn and reaching the state’s highest level of nonfarm jobs on record. Through August 2014, California added an additional 75,700 jobs and now has nearly 90,000 more jobs than it did at the height of the previous bubble. Every major metropolitan area in California has experienced a return to job growth, although some regions continue to do better than others. Similarly, every job sector, with the exception of Government and Finance, has seen an uptick over the past four years, since the recession ended. Moreover, as of August 2014, California had outpaced job growth in the nation overall for 30 consecutive months. In August, California dipped from the 9th fastest growing state in the nation (June 2014) to the 13th fastest. However, the number of jobs created was second only to Texas (314,000 vs. 395,000). In fact, one out of every eight jobs created nationwide over August 2013 – August 2014 was created in California.
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