KERN ECONOMIC JOURNAL is a quarterly publication (February, May, August, November) of California State University, Bakersfield. Its purpose is to track local trends and analyze regional, national, and global issues that affect the economic well-being of Kern County. The journal provides useful information and data that can help the community make informed economic decisions. Sources of funding for this journal include university contributions and sponsorship and subscription fees.
The U.S. economy contracted at an annual rate of 5.0 percent in the first quarter of 2020, compared to 2.1 percent (revised) in the fourth quarter of 2019. This is the worst quarter performance since the Great Depression. The Bureau of Economic Analysis (BEA) reported that the decrease in GDP was largely, but not wholly, related to COVID-19, and the simultaneous demand- and supply-shocks. The decrease reflected negative contributions from personal consumption expenditures (PCE), private inventory investment, exports, and nonresidential fixed investment. These were partly offset by positive contributions from residential fixed investment, as well as all levels of government spending. This ends the anemic 2-percent growth we have seen post-2010, and likely signals the potential for a long-term recession.
COVID Statement: Since we publish the Kern Economic Journal several months after the end of a quarter, we are writing this during the time of COVID-19. We know that there are significant labor market impacts that are being felt at the very end of March, throughout April, May, and June. However, we are attempting to analyze these numbers in light that most of the first quarter was spent not worrying about the worst impacts of COVID-19 and what could be. Our second quarter issue will be expanded to focus on the impacts of the economy of Kern County, and how we are responding to COVID-19.
We adjust published data in three ways. First, we average monthly data to calculate quarterly data. Second, we recalculate quarterly data to take into account workers employed in the “informal” market (i.e., self-employed labor and those who work outside their county of residence). Finally, we adjust quarterly data for the effects of seasonal variations.
Labor Force – The civilian labor force increased by 5,200 members from 389,567 in the fourth quarter of 2019 to 394,767 in the first quarter of 2020. The increase in the labor force in the first quarter mirrors seasonal employment trends seen in Kern County for years, which is a jump in unemployment in the first quarter of the year, while employment falls but at a lesser rate (therefore increasing the labor force). Compared to the first quarter of 2019, our labor force is 2,267 members higher, suggesting that Kern County is a growing economy with a growing population base.