California’s economy continues to grow at a “moderate” pace that should accelerate in 2015, according to the latest quarterly report from the University of the Pacific.
Jeff Michael, head of the Business Forecasting Center, wrote that California’s unemployment rate should fall to an average of 6.6 percent next year from an average 7.5 percent this year.
He added that while Tesla Motors Inc.’s decision to build its 6,500-job “Gigafactory” in the Reno area is “disappointing,” he said the Nevada selection is a “good second-best outcome” for Northern California.
The reason: The giant battery factory will create “the potential for more parts suppliers in the Central Valley, like the small parts facility Tesla is building in Lathrop,” he said. He noted that the Reno plant is designed to build batteries for a new mass-market Tesla electric car, whose success will likely translate into more jobs at the company’s main assembly plant in Fremont and headquarters in Palo Alto.
Michael said the acceleration in the state’s economy will help Sacramento, too. The region’s unemployment is expected to fall to an annual average of 6.3 percent next year from 7.3 percent this year.
Unemployment currently is 7.4 percent, both statewide and in the Sacramento area.
Michael said unemployment is expected to fall to 5.5 percent in 2016, statewide and in Sacramento.