CSUB Kern Economic Journal reports county’s economy declines, unemployment growsDecember 1, 2008
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Kern County's economy experienced a downturn during 2008's third quarter and the housing market numbers were mixed, according to the latest issue of the Kern Economic Journal, published by California State University, Bakersfield.
"The county's economy declined at an annual rate of 1.8 percent. Compared to the previous year, the economy fell 4.1 percent," said Abbas Grammy, professor of economics at CSUB, and publisher of the Kern Economic Journal. The county's economy generated $15.7 billion in personal income, $70 million less than the previous quarter. With continued growth of the labor force, personal income per worker decreased $800 to reach $42,400.
He added the county's labor market indicators were mixed. "The county added 5,410 members to its work force and created 1,690 jobs. This increase in employment consisted of 2,660 more farm jobs, 500 less non-farm jobs, and 470 less informal jobs (self-employed workers and those working outside the county)," he said.
Meantime, the jobless rate grew. The number of unemployed workers increased by 3,720 and the rate of unemployment climbed from 8.8 to 9 percent. Still below the county average, the rate of unemployment averaged 6.6 percent in Bakersfield, 7.4 in California City, 5.4 percent in Ridgecrest and 6.3 in Tehachapi.
Yet businesses have become less pessimistic about local economic conditions. The Business Outlook Index rebounded from a sharp declining trend over the previous five quarters. The index stood at 88 compared to 82 in the previous quarter and 116 four quarters ago.
Several identified factors that brightened the business outlook included families spending money on kids going back to school, increased tourism and recreation during the summer months, and increased spending during the election months.
In contrast, consumer confidence fell once again. The Bakersfield Consumer Sentiment Index declined for the sixth consecutive quarter, reaching its lowest level since CSUB began tracking household expectations in 1999. The slippage was barely perceptible – to 74 in the third quarter from 76 in the previous quarter.
"Data on Kern County's housing market were mixed," Grammy said. "While the median housing price continued to fall, sales volume increased. In Bakersfield, the median housing price plummeted $25,600 (or 11.8 percent) from $216,500 to $190,900. Depreciation in prices caused housing affordability to rise from 18.7 to 21.9 percent. The number of homes sold increased from 2,667 to 3,190 in Kern County and from 1,955 to 2,462 in Bakersfield."
The county's foreclosure activity slowed 39.3 percent from 3,459 to 2,196. And as a result, 1,263 fewer homeowners received notices of loan default from their mortgage bankers.
The latest issue of the Kern Economic Journal also has a detailed article by Craig Kelsey, dean of CSUB's Extended University and professor of public policy and administration, on strategic planning in government and business.
The journal includes a CEO profile of Bernie Herman, the executive director/CEO of the Bakersfield Museum of Art; and examines "Increased Business Valuations Based Upon Patents" by Charlette Crissman, from Klein DeNatale, Goldner, Cooper, Rosenlieb and Kimball, LLP.
The Kern Economic Journal is a quarterly publication focusing on local economic trends and developments. The journal provides the community with economic information produced by the CSUB Economics department. "What we provide is local economic data and data analysis which are not readily available in the community," Grammy said. "This helps local business people make better decisions. We study local economic trends to determine how the local economy is progressing."