Georgia, California Economies Have Positive Forecasts, But Momentum May Be Slowing
As speculation continues over the Federal Reserve’s possible rate hike following their next meeting, businesses across the US continue to eye economic reports. The latest national data from the Labor Department indicate August unemployment fell to 5.1%, down from 6.1% a year before, suggesting the US national economy continues to have positive momentum, but that growth may be slowing. This is highlighted by news from two key US states in different regions. In the Southeast, forecasts for Georgia’s economy continue to be positive.
Georgia State University business professor Rajeev Dhawan argued that, despite a recent slowdown, employment growth in Georgia will accelerate in the second half of 2015. He added: “As global economic health stabilizes, consumers demonstrate a greater propensity to spend and corporate spending resumes, Peach State job growth will accelerate to 2.6 percent for the 2015 calendar year.” The Atlanta Business Chronicle added that in highlighting the state’s growth, Dhawan also cited the health of the corporate sector, with domestic consumption offsetting global weakness. The report also projected that personal income will rise by 4.6 percent this year, 5.1 percent next year, and 5.8 percent in 2017.
In a similarly positive forecast, though one that suggested some areas of the economy may be cooling, the Los Angeles Times reported that the California’s economy has been notably volatile during ordinary business cycles, adding that recent concerns over slow Chinese growth has caused some to worry. Bank of the West chief economist Scott Anderson observed that “it’s going to be a lot harder for California to outperform the way it has the last two years,” adding, “It doesn’t mean we have to go into a recession, but it does make it a lot harder for us to keep up this pace.” The article continued by noting that the state’s economy is uniquely vulnerable to market distortions, and could be adversely affected by fluctuations in the equity market.
What This Means For Small Business
Although Georgia and California are two key states that, like the US as a whole, are experiencing strong growth, the latest economic data and forecasts suggest small business owners could face increased uncertainty about the economy’s growth rate in the latter half of 2015. Still, the nation as a whole appears likely to continue to experience job growth, particularly in the technology, healthcare, and manufacturing sectors, and unemployment rates are likely to fall as more businesses, large and small, expand.
Note: this article is intended to keep small business owners up on the latest news. It does not necessarily represent the policy stances of NFIB.