Economic indicators from the labor market to spending are pointing in the right direction for Long Beach.
That was one of the main messages experts shared during Wednesday’s Accelerate Long Beach quarterly economic forum.
“We’re really shifting gears at this point, from recovery to expansion,” said Robert Kleinhenz, principal economist at Kleinhenz Economics.
Nationally, the number of unemployed Americans has gone down significantly since the height of the pandemic, according to a data analysis by the Cal State Long Beach Office of Economic Research. With available jobs currently outnumbering the number of unemployed workers, Kleinhenz said employment is likely to recover fully by mid-summer next year.
“Businesses are poised to hire,” Kleinhenz said. “They want to expand.”
California has also been gaining ground, accounting for 43% of jobs added nationwide. Employment in leisure and hospitality, one of the sectors hit the hardest by the pandemic, has recovered significantly across the state, according to the Cal State data analysis.
Despite significant gains, employment in this and other hard-hit, face-to-face sectors—such as personal care services—is still below pre-pandemic levels. “They’re leading the charge in employment recovery, but they’re still struggling a little bit more,” said Seiji Steimetz, chair of the Cal State Long Beach Economics Department.
With additional unemployment benefits already suspended or soon-to-expire, some of the workers in these industries might be forced to return despite concerns over infection risk and low wages, Steimetz said. Labor force data supports that trend, with Long Beach participation in the labor force only 3% lower than pre-pandemic levels.
But affordability could be an ongoing challenge, Steimetz cautioned, as home prices and rents continue to rise sharply, with Long Beach rent growth outpacing that of the surrounding LA and Orange County region, presenting a rare dark spot in an otherwise optimistic forecast.
“I have concerns,” the economist said.
But for now, despite slightly above average inflation and rising housing costs, consumer spending both nationally and on a local level has made strong gains. That much is clear with the influx of cargo into the San Pedro Bay port complex, which has caused congestion at the port and in the overall supply chain that is expected to last well through the holiday season.
Consumer spending in LA County has surpassed pre-pandemic levels by 13.4%, with retail leading the charge, according to a CSULB analysis.
“There’s a lot of purchasing power right now,” Steimetz said, “and our local consumers are definitely using it.”
One sector of the local economy that has remained extremely strong both in terms of employment and spending has been health care, which accounts for 16.4% of all employment in the city.
Since January 2020, before the effects of the pandemic were first felt in the US, health care spending in Long Beach increased by 33%. The reasons for this significant increase are yet to be fully explored, Steimetz noted, but are likely to be attributed, at least in part, to the additional stress patients experienced as a result of the long-lasting public health crisis.
Nurses have been in especially high demand, with 89% of job postings falling into the nursing field. This, Steimetz pointed out, is a reflection of a current and ongoing nurse shortage in the city and across the nation.
But despite continued growing pains like labor shortages and above average inflation, economists project a bright year for the local, state and national economy.
“We’re really making progress by leaps and bounds,” Kleinhenz said.