CSUB’s Kern Economic Journal reports county sees slow growth in first quarter

May 20, 2008
CONTACT:
Kathy Miller, 661/654-2456, kmiller26@csub.edu or
Michele Newel, 661/654-2720, mnewell1@csub.edu
 

Kern County's economy grew at a sluggish rate during 2008's first quarter and the housing market remained soft, according to the latest issue of the Kern Economic Journal, published by California State University, Bakersfield.

"The county's economy grew at a sluggish annual rate of one-half of one percent, 1.3 percent slower than that of the previous quarter," said Abbas Grammy, professor of applied economics at CSUB, and publisher of the Kern Economic Journal. Grammy stressed that although growth is slow "we're not in a recession."

He added the county's labor market data showed mixed results. "The county's labor force added 170 members. Total employment declined by 170, which comprised of 1,580 less farm jobs, 1,720 more non-farm jobs, and 310 less informal jobs (self-employed workers and those working outside the county).

"In Kern's non-farm market, construction, wholesale and retail trade, transportation, warehousing and utilities, real estate and rental and leasing, and leisure and hospitality cut jobs. In contrast, manufacturing, professional and business services, educational and health services, and government increased employment."

Meantime the jobless rate increased. The number of unemployed workers increased by 340 and the rate of unemployment climbed one-tenth of one percent from 8.7 to 8.8 percent. Still below the county average, the rate of unemployment rose from 5.6 to 7.1 percent in Bakersfield, from 4.5 to 7.9 in California City, from 4.5 to 5.7 percent in Ridgecrest, and from 5.4 to 6.9 in Tehachapi.

Businesses have lost confidence about their employment and financial conditions; the Business Outlook Index dropped 12 percentage points to reach 94. Grammy reported this is the first time Kern County business decision-makers have turned pessimistic in 10 years. Several identified factors negatively impacting the business outlook are rising fuel and labor costs, the sub-prime mortgage crisis and mounting property foreclosures and the weakness of the U.S. dollar relative to the Canadian dollar and the euro.

Likewise, the consumer confidence fell once again. The Bakersfield Consumer Sentiment Index declined for the fourth consecutive quarter, reaching its lowest value since CSUB began tabulating it in 1999. The index crumbled 23 percentage points to arrive at 88.

"Kern County's housing market remained soft both on price and volume sides," Grammy said. "In Bakersfield, the median housing price plummeted $22,800 (or 8.9 percent) from $256,100 to $233,300. The number of homes sold in the county decreased from 1,910 to 1,749 in Kern County and from 1,406 to 1,248 in Bakersfield."

Adding to the gloomy housing picture, the county's foreclosure activity accelerated from 2,631 to 3,211. And as a result, 580 more 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 improving the understanding of open space planning.

The journal includes a CEO profile of Debra Moreno, president and CEO of the Greater Bakersfield Chamber of Commerce; and examines "Determinants of Housing Prices in Antelope Valley, California" by Susan Libby, CSUB economics student.

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."

The journal is available to the public free of charge at [ http://www.csub.edu/kej ]www.csub.edu/kej. For more information contact Grammy at (661) 654-2466 or by e-mail at agrammy@csub.edu.