Uncertainties over Trump policies expected to slow California, Bay Area job growth

March 08--Job creation in California and the Bay Area is expected to weaken this year due to lingering uncertainties over President Donald Trump's tax, immigration and health care policies.

The closely watched UCLA Anderson Forecast report on Wednesday reduced its estimate for California job growth in 2017 to 1.6 percent.

The forecast, released quarterly, previously estimated in December -- soon after Trump's election victory -- that California's job market would grow by 1.8 percent this year.

The Golden State's job market expanded last year by 2 percent.

"There remains risks and uncertainty in the outlook for California," said Jerry Nickelsburg, a senior economist with the UCLA Anderson Forecast. "We still don't know what many of the policies in Washington, D.C. are going to be."

Up in the air: the timing of tax cuts for individuals and corporations, along with efforts to repeal the Affordable Care Act and replace it with a reformed health care program.

"There is potential that these uncertainties could hold down job and economic growth in the Bay Area," said Jeffrey Michael, director of the Stockton-based Center for Business and Policy Research at University of the Pacific.

The questions over White House immigration and travel policies could put a dent in California's tourism business, the UCLA Anderson forecast suggested.

"There are four events that have become more evident: a change in the INS rules of engagement for deportations of undocumented immigrants, exchange rates, international travel visas, and the travel ban," Nickelsburg wrote in his California forecast. "This has implications for the California workforce and for the perception of the United States as a place for foreigners to visit this year."

California's hotels, restaurants, tourism and retail sectors might experience slower-than-normal growth, the report said.

Leisure and hospitality industries might produce 12,000 fewer jobs during 2017 than they did in 2016, although the industry will continue to grow. Retail might produce 2,300 fewer jobs than normal, the forecasters said.

Retail sales in California, adjusted for inflation, are expected to increase by 2 percent in 2017 and by 2.1 percent in 2018. By comparison (also adjusted for inflation), retail sales were down by 0.3 last year.

Yet personal income will grow in California by 3.4 percent in 2017, more than the increase of 2.3 percent in 2016, when adjusted for inflation.

The report didn't elaborate on reasons for the year-over-year differences in retail sales and personal income.

Although the Anderson Forecast didn't have specific numbers for the Bay Area, Nickelsburg said the nine-county region will endure slower job growth in 2017 compared with 2016. That's a consequence of the ultra-low unemployment rates and "full employment" situation in the region.

"You can't increase employment beyond your ability to hire people," Nickelsburg said.

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