Oct. 26--Hiring in Orange County was more robust than anticipated last year, and gains are expected to continue, according to the 2014 economic forecast released by Cal State Fullerton.
An increase of 28,200 jobs is projected for 2013, a 2% increase over 1.4 million jobs in 2012, according to the Mihaylo College of Business and Economics forecast, presented Thursday at the Hyatt Hotel in Irvine.
Next year looks stronger. An increase of 35,900 jobs is projected in 2014, a 2.5% increase over 1.43 million jobs forecast in 2013.
"While not a booming expansion, the current recovery is surely resilient," the report reads.
Jobs added in the past 12 months, 32,500, were on par with jobs added in the prior 12-month period.
In January 2012, the county's unemployment rate was 8.1%, but it fell to 6.8% in December 2012. In all, local employment grew by 34,400 jobs that year.
The county's biggest employment sectors -- professional and business services, retail, transportation and trade -- showed slow hiring.
Exceptions were construction, which has turned a corner, economists said, and leisure and hospitality, which is now about 12% higher than its previous peak.
Economists noted that the growth in food services and hospitality demonstrates the county's importance as a destination for leisure and entertainment.
"The rebound is undoubtedly slower than some of the past recoveries, such as the ones in the early 1990s and the dot-com recovery of 2001-02, but this is rather the consequence of the deep national recession caused by the financial collapse of 2008," the report said. "Typically, recoveries following financial disasters are slower, some lasting as long as 10 to 12 years."
Home permits are up
Meanwhile, new-home building permits rose to 6,900 in Orange County in 2012, up from 2,200 in 2009.
Home prices in the county and Southern California "rose at an exceptionally fast clip," according to the report.
The average median single-family home price is still 15% below peak prices of 2006, hovering around $664,580 as of August. However, housing prices have seen double-digit monthly gains since August 2012.
The median home price in Newport Beach was $1.563 million Friday, according to Zillow. Costa Mesa's median was $616,000, and Irvine's $743,000.
"This bodes well for future consumer spending, given that home equity is the most important asset of household wealth for a significant portion of the population," the report said. "Not surprisingly, consumer confidence has risen in tandem with improved home values, and the anxiety over the dramatic loss of wealth during the recession is beginning to abate."
Economists warned that the continued increase in home prices may not last. They expect to see a "cooling" in the pace of rising home prices, with signs already pointing in such a direction. Housing prices rose at a 20% pace from January to May of this year. However, in June, housing prices were up 16% from a year earlier.
The economy will continue to show volatility in the last quarter of 2013 and into 2014, the report said, noting an increase in mortgage rates because of the Federal Reserve's "tapering discussions," regarding its monetary stimulus, that hampered the housing market in the earlier part of the year.
"We expect the Fed to start increasing rates no earlier than 2016, and even then the pace of rate hikes should be measured," the report stated. "This implies a tempering in housing price appreciation, but by no means a reversal of the positive upward trend seen over the last two years."
The economy offers something in which to believe, said Richard Davis, the chairman, president and chief executive of U.S. Bancorp, in a keynote address at a presentation Thursday on the findings.
Drawing from an anecdote told to him by James Lovell, captain of the troubled Apollo 13 space mission, Davis explained what it meant to have faith in future improvement. Lovell did not consider himself a faithful man, Davis said. Yet when he learned that he might not survive his mission, Lovell apparently found himself believing strongly otherwise.
Similarly, Davis instructed the nearly 1,000 people gathered for the presentation to have faith that the economy will one day escape the negative effects of the recession and grow robustly. It just may take a while yet.