New data suggesting Kern County has fully recovered from the recession aren’t as encouraging as they may appear, though observers do see scattered signs of progress in a recently glum local economic climate tied to lower oil prices.
The deceivingly good news is that, on Friday, California’s Employment Development Department reported Kern’s jobless rate fell last month to 8.4 percent, which was the lowest since April 2007. That’s a big improvement from the recessionary peak of 17.9 percent in March 2010.
But behind last month’s low jobless rate are figures showing 3,000 “discouraged job-seekers” dropped out of the county’s economy, at least temporarily, said EDD labor analyst Rosendo Flores, who helped prepare Friday’s report. If those people had kept looking for work, he noted, the county’s official unemployment rate would not have been so rosy.
Others who monitor the local economy, and who remain hopeful overall, agreed September’s unemployment rate makes conditions look better than they really are.
“At first blush it looks good, and I like to be positive,” said Richard Chapman, president and CEO of the Kern Economic Development Corp., which works to recruit employers to the county. But he added, “we’re kind of in the red,” with about 500 fewer jobs last month as compared with a year before.
The main factor holding back Kern’s economy is a roughly 50 percent drop in oil prices since June 2014. Chapman said the decline has cost at least 2,400 direct local jobs, not counting indirect employment, such as support positions, that bring the oil-related layoffs total to perhaps 10,000.
Those losses mask substantial employment gains in sectors such as agriculture, education and health care, noted Richard Gearhart, assistant economics professor at Cal State Bakersfield. He pointed to positive developments such as farmers switching out crops to make the most of El Nino weather conditions and hospitals’ efforts to reduce waiting times. Both trends generally lead to new hiring.
At the county’s largest financial institution, Kern Schools Federal Credit Union, President and CEO Steve Renock said local economic indicators that looked encouraging earlier in the year appear lately to be weakening.
In an email, Renock said borrowing has been strong and delinquent loans have stayed low for most of 2015. But both trends have started to reverse during the last 60 days, he added, “and we are getting a few more calls from members concerned about their ability to repay loans.”
“I would say the economic mood of our local consumer is apprehensive,” Renock wrote. “Not overly positive or negative.”
This article was written by John Cox from The Bakersfield Californian and was legally licensed through the NewsCred publisher network.