By: Dr. Lynn Reaser
Our economy entered the year with so much potential, but recent job growth has been disappointing in San Diego. In March, year-over year job growth reached 2.6%, but by August the job gain had slowed to less than half that pace.
For the balance of 2013, job growth is likely to remain only modestly above one percent due to several constraints. First, the probability of another year of sequestration will weigh on an economy where 22% of all jobs are linked to defense spending. Uncertainty over the fate of various federal programs will put many hiring plans on hold. Second, although interest rates have receded from their recent peaks, high rates and home prices have reduced housing affordability. Third, ongoing tensions in the Middle East are likely to keep oil prices elevated. Fourth, concerns over health care costs and employer mandates will restrain hiring. Fifth, retailers facing a cautious and increasingly online consumer have indicated a reduction in hiring plans versus last year.
Unfortunately, the catalyst for accelerated job growth is missing.