Kern Economic Journal reports second quarter growth, slipping confidenceAugust 14, 2008
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Kern County's economy experienced increased growth during the second quarter of 2008 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 an annual rate of 2.3 percent, 1.8 percent faster than that of the previous quarter," said Abbas Grammy, professor of applied economics at CSUB and publisher of the Kern Economic Journal. The county's economy generated $15.77 billion in personal income, $90 million more than the previous quarter.
He added the county's labor market indicators improved. "The county added 6,000 members to its work force and created 8,400 jobs. This increase in employment consisted of 2,400 more non-farm jobs, 8,700 more farm jobs, but 2,700 less informal jobs (self-employed workers and those working outside the county)."
Meantime the jobless rate was reduced. The number of unemployed workers decreased by 1,800 and the rate of unemployment dropped six-tenths of one percent from 8.8 to 8.2 percent. Still below the county average, the rate of unemployment fell from 7.1 to 6.6 percent in Bakersfield, from 7.9 to 7.4 in California City, from 5.7 to 5.3 percent in Ridgecrest, and from 6.9 to 6.3 in Tehachapi.
Businesses have become more pessimistic about local economic conditions; the Business Outlook Index dropped 12 percentage points to reach 82. Grammy reported the Business Outlook Index has declined for the fifth consecutive quarter, reaching its lowest value in nine years. Several identified factors negatively impacting the business outlook are rising fuel costs, continued recession in the housing market and sluggish growth of the national and state economies.
Likewise, the consumer confidence fell. The Bakersfield Consumer Sentiment Index slipped from 88 in the first quarter to 76 in the second, its lowest reading since CSUB began the measurement in 1999.
"Kern County's housing market remained soft," Grammy said. "In Bakersfield, the median housing price plummeted $16,800 (7.2 percent) from $233,300 to $216,500. Depreciation in prices caused housing affordability to rise from 17.2 to 18.7 percent. However, the number of homes sold in the county increased from 1,749 to 2,667 in Kern County and from 1,248 to 1,955 in Bakersfield."
The county's foreclosure activity accelerated from 3,211 to 3,459 resulting in 248 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 complying with public open meeting acts.
The journal includes a CEO profile of David Ameen, the newly appointed executive director of Kaiser Permanente Kern County; and examines "Health Care Reform Proposals By Presidential Candidates" by Rochelle Butler, CSUB graduate 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."