A report from the Latino GDP Project highlights newly released and record-setting population and labor force data. For the first time in history, one of every five people living in the United States is Latino. In 2024, the Latino labor force grew 5.5 percent, the single strongest growth on record and 4.2 percentage points stronger than Non-Latino. And the Latino labor force participation rate sits at an all-time high of 69 percent. The Latino labor force participation premium, that is the difference between Latino and Non-Latino participation rates, hit a record of 6.2 percentage points in 2024.

“Time and time again, we find that hard work, self-sufficiency, optimism and perseverance are the characteristics that underly the strength and resilience of U.S. Latinos,” said Matthew Fienup, executive director of the Center for Economic Research & Forecasting at Cal Lutheran. “By supporting this population, we believe these same characteristics will continue to drive growth in the overall U.S. economy for years to come.”

The Latino GDP Project, an ambitious multi-disciplinary research initiative of Cal Lutheran and UCLA, provides careful, explicit, and timely documentation of the economic powerhouse represented by U.S. Latinos.

Watch the Telemundo feature HERE

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Introduction

The April release of the 2025 U.S. Latino GDP Report revealed that the U.S. Latino GDP surged past $4 trillion for the first time. At $4.1 trillion, the 2023 U.S. Latino GDP is the world’s fifth largest GDP, larger than the entire economy of India. The U.S. Latino GDP is also the single fastest growing among major economies, growing faster than China’s GDP since 2019 (Hamilton et al, 2025).

Against that already impressive backdrop, we note newly released and record-setting population and labor force data. For the first time in history, one of every five people living in the United States is Latino. In 2024, the Latino labor force grew 5.5 percent, the single strongest growth on record and 4.2 percentage points stronger than Non-Latino. From 2010 to 2024, the Latino component of the U.S. labor force grew 7.2 times faster than the Non-Latino labor force. And the Latino labor force participation rate sits at an all-time high of 69 percent. The Latino labor force participation premium, that is, the difference between Latino and Non-Latino participation rates, hit a record in 2024 of 6.2 percentage points.

The Latino GDP Project, a multi-disciplinary initiative conducted by researchers at California Lutheran University and UCLA, provides careful, explicit, and timely documentation of the economic powerhouse represented by U.S. Latinos. Eight consecutive annual reports document the fact that Latinos living in the United States enjoy substantial economic premiums across a wide range of indicators, relative to Non-Latinos. Latino participation in the U.S. economy is more active and more intense than Non-Latino participation. Further, the vitality of the overall U.S. economy depends on the intensity of activity of U.S. Latinos.

Population

The Census Bureau’s new official population estimates by ethnicity indicate that the size and growth of the Latino cohort are even more auspicious than previously understood. The 2025 U.S. Latino GDP Report, released in April, documented that U.S. Latino population growth accelerated from 1.2 percent in 2020 to 1.8 percent in 2023. The revised estimates still show 1.2 percent in 2020, but 2023 growth is now estimated to be a much more rapid 2.7 percent. The previously estimated 2023 Latino population of 65.2 million has been revised upward to 66.1 million, or 923 thousand more Latinos than previously estimated. (See Table 1.)

The Census Bureau’s June data release also provides new, never-before released data for 2024. The Latino cohort is now, for the first time in history, one out of every five persons in the United States. The United States Latino population as of July 1, 2024 is estimated to be over 68 million, about 2 million persons greater than updated 2023 estimates. Their 2023 to 2024 population growth rate of 2.9 percent is 5.8 times as fast as the growth of the Non-Latino population. The Latino population growth premium, the difference between Latino and Non-Latino one-year growth rates, is 2.4 percentage points in 2024, a historical high. (See Figure 1)

Table 1: Official U.S. Latino Population Estimates

The sources of population growth, and how these vary by ethnicity, are also noteworthy. Latino natural population change (births minus deaths) remained positive throughout the Pandemic, despite Latinos suffering significantly higher Covid-related mortality. From 2020 through 2024, the cumulative Latino natural population increase was an estimated 3.2 million persons, compared to a decline of 1.3 million for Non-Latinos. (See Figure 2) This is an extraordinary 4.5 million person difference.

           Figure 1: Latino Population Growth Premium                     Figure 2: U.S. Natural Population Change

Latinos powered through the extraordinary challenges of the pandemic and were responsible for keeping overall U.S. natural population change positive. This is further evidence that, as noted in previous Latino GDP Reports, Latinos held up the U.S. economy during the pandemic, highlighting just how vital and uplifting Latino strength and resilience are for the nation.

Labor Force

The latest American Community Survey (ACS) labor force data was released in early September and provides new, never-before released data for 2024 labor market effort by U.S. Latinos. The new data show that there were 35.1 million Latinos in the U.S. labor force in 2024, up 46.5 percent since 2010. This compares to a 6.4 percent rise for Non-Latinos, which implies that the Latino labor force grew 7.2 times faster than Non-Latino from 2010 to 2024. While that is a blistering pace of growth spanning more than a decade, the 2024 Latino labor market data sets whole new performance standards. The U.S. Latino labor force participation rate achieved 69 percent, the highest recorded since 2010, and compares to a Non-Latino rate of just 62.8 percent. The Latino labor force participation premium climbed to 6.2 percentage points, an all-time high.

Latino labor force growth is the single most impressive characteristic described in this essay and one of the most impressive in the Latino GDP Project’s entire body of research. The 2024 Latino labor force grew 5.5 percent from 2023. (See Figure 3) This is historic growth and represents an explosion from the 3.8 percent growth of the prior year, where that rate had been the strongest on record. Due to this incredibly rapid growth rate, the 2024 U.S. Latino labor force growth premium, the difference between Latino and Non-Latino labor force growth rates, shattered the historical record at 4.2 percentage points. (See Figure 4) To put this in perspective, from 2011 to 2023, the average Latino labor force growth premium was 2.2 percentage points. At 4.2 percentage points, 2024’s growth premium is more than 90 percent greater than that historical average. This performance is an outlier of strength, even for Latinos, who had already demonstrated impressive and consistent economic strength during the 2010 to 2023 period.

                  Figure 3: U.S. Labor Force Growth                             Figure 4: Latino Labor Force Growth Premium

Conclusion

The hard-working, self-sufficient, optimistic U.S. Latino cohort is growing in every way, in absolute numbers, and in shares of the U.S. population and labor force. New data reveal a U.S. Latino population that is historically large and growing yet faster. And, new data indicate that the U.S. Latino labor force is not only larger and growing faster but is shattering records for economic vibrancy. We see a bright future for the United States, because of Latinos. Hard work, self- sufficiency, optimism, perseverance – these are the characteristics that underly the strength and resilience of U.S. Latinos. These same characteristics will continue to drive growth in the overall United States economy for years to come.

References

Hamilton, D., M. Fienup, D. Hayes-Bautista, and P. Hsu. 2025. “2025 U.S. Latino GDP Report: Hard- Working, Self-Sufficient, Optimistic.” Community Partners, April 2025. www.LatinoGDP.us

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Table 1: Official U.S. Population Estimates

The 2023 revised data provide greater optimism both via size and growth measures. The U.S. was actually 1.9 million-persons larger than previously measured for July 1 2023, and, the revised growth rate is nearly twice as fast as the previous growth estimate.

These population estimates also show newly-understood demographic strength by ethnicity, with both Latino and Non-Latino population growth rates significantly faster than previously estimated. The 2023 Non-Latino population growth rate is now estimated to be 0.4 percent, compared to a previously estimated 0.2 percent. The 2023 Latino population growth rate is now estimated at 2.7 percent, versus a previously estimated 1.8 percent.

Table 2: Official U.S. Latino Population Estimates

This hard-working, household and family-building cohort, the U.S. Latino cohort, is growing in every way, in absolute numbers, and in shares of the U.S. demography and economy (Hamilton et al, 2025). With the new data revealing an updated estimate of the size of the U.S. Latino population, we can see that Latinos are creating an even greater demographic and economic punch than previously understood.

The Census Bureau’s June 2025 data release also provides new, never before released population estimates for 2024. The United States population as of July 1, 2024 is estimated to be over 340 million persons, which is 3.3 million persons greater than 2023 (using current estimates) and perhaps more importantly, 5.2 million persons greater than the earlier estimates of 2023. This provides a different picture of America than previously understood.

The release also provides never before seen population estimates by ethnicity for 2024, 68.1 million Latinos and 272 million Non-Latinos. Our understanding of the size of the 2024 Latino cohort is that it is 2.9 million persons larger than the previous estimates of 2023, and the new Non-Latino cohort size is 2.3 million persons greater than previous estimate of 2023.

The Latino cohort is now, for the first time in history, one out of every five persons in the United States. Their 2024 population growth rate was three times as fast as that of the overall country, and 5.8 times as fast as the Non-Latino cohort. Their population growth premium, that is, the difference of their one-year growth rate over that of Non-Latinos, was 2.4 percent in 2024, a historical high, see Figures 1 and 2.

Figure 1: Latino and Non-Latino Population Growth

The rapidity of Latino population growth provides another channel by which the American economy will exhibit strength going forward. The Latino cohort, as described by Hamilton et al 2025, is younger, more likely to work, is accumulating human capital at a higher rate, has higher income growth, and is forming households at a more rapid rate than the Non-Latino cohort, all of which will provide strength and vitality to the American economy in future years.

References

Hamilton, D., M. Fienup, D. Hayes-Bautista, and P. Hsu. 2025. “2025 U.S. Latino GDP Report: Hard-Working, Self-Sufficient, Optimistic.” Community Partners, April 2025.

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California Lutheran University economists Matthew Fienup and Dan Hamilton have been named as recipients of a 2024 Crystal Ball Award for the Fannie Mae Home Price Expectations Survey (formerly the the Zillow Home Price Expectations Survey and the Case-Shiller Home Price Expectations Survey). Fienup and Hamilton, both of Cal Lutheran’s Center for Economic Research & Forecasting (CERF), are receiving the prestigious national forecasting award for the fourth time in six years, after winning three straight awards in 2019, 2020, and 2021.

The CERF team received this year’s honor for their outstanding accuracy. CERF’s 2-year-ahead forecast of 2024 home prices was the single most accurate among more than 100 forecasters in the survey. CERF’s 3-year-ahead forecast was the number 3 most accurate, and their 1-year-ahead forecast was number 5. Other top finishers include forecasting heavyweights Mark Zandi of Moody’s Analytics, Denis Egin of the International Monetary Fund, Susan Wachter of the Wharton School, and Carlos Garriga of the Federal Reserve Bank of St. Louis.

“CERF has been proud to be a part of the Fannie Mae Home Price Expectations survey since it was launched by Nobel Prize winner Robert Shiller in 2010,” Hamilton said. “The survey leverages a large community of professional forecasters to provide forward guidance on home prices, which in turn impact household spending, household and investor psychology, and financial markets.” Originally started by Yale Professor and Nobel Laureate Robert Shiller, the organization Pulsenomics surveys a distinguished panel of over 100 economists, investment strategists, and housing market analysts each quarter regarding their 5-year expectations for future home prices in the United States.

The Center for Economic Research & Forecasting was founded by economists Bill Watkins and Dan Hamilton in 2009. Hamilton, CERF’s Director of Economics, has worked with economic forecasting models for nearly 25 years. Fienup arrived at CERF in 2014 and took over as Executive Director upon Watkins’ retirement in 2016. Fienup specializes in applied econometrics and economic policy analysis. CERF provides national, state and regional economic forecasts and analysis, used by government, private business and non-profit organizations. CERF is a member of the Wall Street Journal Economic Forecasting Survey and the National Association of Business Economics’ Economic Outlook and Economic Policy Surveys. CERF economists are regularly quoted by business journals and major media, including the Wall Street Journal, the Associated Press, the Washington Post, the Financial Times, the Economist Magazine, Forbes, Bloomberg, and CNBC.

“At CERF, our goal is to provide objective, clear-eyed forecasts that reflect what economic theory and state of the art forecasting tools reveal. We see our role as one of calling balls and strikes, rather than advocating for a preferred outcome. Our fourth Crystal Ball award is validation of that approach. It further demonstrates CERF’s outstanding track record of accuracy,” Fienup said. “We are especially proud of this award given the history of the survey and the distinguished list of survey contributors.”

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The Socio-Economic Importance of Housing

A year ago, I outlined a variety of social and economic impacts from housing in the essay “Housing and Growth”. A link to the full essay is here.  To review, I provide a list of the socioeconomic impacts here:

• Housing is a necessity for family formation, work, and life
• Home ownership is a key rung on the ladder of upward socio-economic mobility
• Housing has a large economic multiplier, that is, a new house generates additional economic activity, jobs and income, with a larger economically stimulating effect than most industries
• A lack of housing contributes to poverty
• A lack of housing contributes to income inequality

This year’s Ventura County Economic Outlook and Forecast essay documents a jobs-housing mismatch, where the majority of sectors contributing to jobs growth are in relatively lower-salary industries, preventing home ownership. This closed door to home ownership creates a barrier to socioeconomic mobility. Home ownership is all-important in providing a financial base with which households can seek further economic improvement; we might think of Ventura County’s severe lack of housing affordability (described in detail below) as actually removing two rungs from the socioeconomic ladder, not just one. This limits human flourishing, especially among the disadvantaged, and is an unyielding roadblock to an egalitarian set of opportunities in our County.

Figure 1: National Association of Realtors Affordability

Figure 1 (above) shows that among the major U.S. metropolitan areas, Ventura County is the next to worst metro in the United States with respect to housing affordability. This might be a bit surprising, as there are other localities that have higher prices than Ventura County. I explain and document the relation between housing costs and income levels in detail below.

Housing Production

As CERF has previously documented, the U.S. home production rate is historically low, as economic expansions go. Over the past 60 years, U.S. new housing production steadily fell lower and lower in each business cycle of expansion and recession (see Fig.1 in last year’s essay – Link). However, even against that national backdrop, the Ventura County new home production rate is substantially lower.

Figure 2: Ventura County and U.S. Home Production

To remove the volatility of the data in Figure 2, I calculate decade by decade averages of U.S. and Ventura County new housing production rates and provide them in Table 1.

Table 1: Per-Capita Home Production by Decade

From Table 1 (above) Ventura County’s 1990s new home production rate was 3.6 new homes per thousand population, a rate that was 28 percent lower than the U.S. rate. Ventura County’s rate relative to the U.S. has been in freefall for some decades now. It fell to a 44 percent rate lower than the U.S. during the 2000s, it fell further to a 56.5 percent rate lower than the U.S. during the 2010s and thus far during the 2020s it has averaged a 64 percent lower rate than the U.S. And this is relative to a U.S. benchmark that itself has declined precipitously during these decades. Ventura County’s extremely low new home production rate has created a severe housing supply constraint. And with each passing decade, Ventura County’s home production falls farther and farther behind.

From monthly realtor data, we see that the median home price hit a high of $972,000 in July of 2024. This results in an annual average of $924,300. I expect that within two years, there will be monthly median home prices that exceed $1 million dollars. Importantly, these prices are for the median home, not a particularly nice, large, or recently built home.

The Dichotomy of Housing Costs and Incomes

Apartment Market Costs and Income

Using the Ventura County Apartment Market survey database from the Dyer-Sheehan Group, the overall July 2024 average monthly rent was $2,675, a rate that is a weighted average across all apartment types, including studios, one-bedroom, two-bedroom, and three-bedroom apartments. The two-bedroom apartment rate was $2,848, which is up 4 percent from last year, as is the overall average.  The overall vacancy rate improved slightly from 2.9 percent to 3.1 percent, which is welcome, but this is still a remarkably tight market.  For more detailed apartment market data, see Table 3, a bit farther below.

Figure 3: Economic Conditions for Ventura County Renters

To assess the conditions for renters, Figure 3 (above) shows the rent trend as well as the salary-to-rent ratio since 2007. Rents, the gold line and left scale, rose sharply from 2012 to 2020, but then, remarkably, rose at an even faster rate from 2020 to now. The salary-to-rent ratio, purple bar and right scale, was 33 percent in 2007 but by 2023 had fallen to only 26.3 percent. This is a devastating decrease of affordability for Ventura County renters. For much of the past 16 years, Ventura County’s apartment costs, and the salaries needed to support those costs, have been diverging, and since 2020 they are diverging at such a rapid rate that there are socioeconomic impacts.

Based on the standard recommendation that no more than thirty percent of a person’s gross wages or salary should be spent on housing and using the smartasset.com take-home pay calculator, a renter would need an annual salary of $172,000 to afford the average two-bedroom apartment rent in Ventura County. The county’s 2023 average annualized salary (stated in 2024 Q2 dollars) was $70,100, which is less than half of the renter’s desired pay level. Only jobs in the Management of Companies sector, just one sector out of Ventura County’s 23 sectors, has salaries higher than $172,000. It does not seem possible that the economic mismatch between the job market and the housing market could be any greater.

Home Ownership Market Costs and Income

The California Association of Realtors median home price of $924,300 for Ventura County for the 2024 year implies a monthly mortgage payment of $4,781. Adding property tax, insurance, and income taxes, and following the 30 percent rule, a household would need to earn an annual income of $360,000 in order to afford the median home. This astonishing figure is almost 260 percent higher than the  $140,000 annual income required to purchase the median home across the U.S. It is about 210 percent higher than the income required for a two-bedroom apartment as described in the previous section above. By any comparison, this estimate provides a dramatic indication of a truly severe housing crisis in Ventura County. This figure also helps us understand the departure of firms, households, workers, and our children from Ventura County to other locations in the U.S.

Table 2 provides the most recent Ventura County annual average salary data, stated in 2024 Q2 dollars, in considerable detail. Average annual salaries range from a low of $30,800 for Hotel Accommodation & Food Services to a high of $174,100 for Company & Enterprise Management. The average annual salary across all industries was $70,100. As impressive as the Company & Enterprise Management sector’s salary is, it is not nearly enough to afford the median priced home in Ventura County based on traditional guidelines (see previous paragraph). However, if there was a household that had two workers who both worked in Company & Enterprise Management, they would be very close to having the income needed to purchase a median priced home.

As mentioned above, this causes a severe limitation on human flourishing. All households should have access to the home ownership market, and through that, a chance to improve their standing socioeconomically.

Table 2: Ventura County Average Salary by Industry

Changing Policy

CERF recognizes that cities are working to bring new housing to market. However, they are forced to operate their planning and building/safety processes within the broader framework of land-use policy which has existed for decades. Ventura County’s land-use policy is the most restrictive in the United States. By changing this broad countywide framework to one where urban areas could be expanded in a thoughtful and strategic way, cities would have a more flexible and rational framework in which to operate. A rational expansion policy would breathe life to planning efforts and it would breathe life into the Ventura County economy. A change to the policy environment such as this would be a large step toward reconciling the severe mismatches, described in this essay, of Ventura County’s housing situation.

During the Pandemic Ventura County’s leaders had vision, bravery, and fortitude. They engaged in truly courageous policy-making which balanced lives and livelihoods during the extraordinary challenges of COVID-19. Let’s harness that courage and excellence and focus it on setting Ventura County in a new policy direction. Other communities who have their own jobs-housing mismatch would see Ventura County as a leader and innovator. But we would not be doing it for regional policy accolades, rather, we would be doing it because of our fundamental commitment to our workers and to our children.

Additional Charts and Tables

Table 3: The Dyer-Sheehan Group Ventura County Apartment Market Survey

Additional Charts

The post The Case for Housing appeared first on Center for Economic Research and Forecasting.

Introduction

As CERF has previously documented, demographic and economic data indicate that Ventura County’s economy is stuck in a prolonged period of weakness. Data indicate that the county’s population peaked back in 2016 and has declined every year since. The civilian labor force peaked in 2012. Real GDP peaked in 2007, prior to the Great Recession and has not recovered. Net domestic migration data indicate a sustained outflow of people.

On December 4, the Bureau of Economic Analysis (BEA) published updated Ventura County Gross Domestic Product (GDP) figures. The release provides revisions to all U.S. county-level GDP measures for the years from 2001 to 2022, and provides previously unreleased estimates for 2023. In 2023, Ventura County’s GDP grew by a relatively slow 0.7 percent, whereas the overall U.S. economy expanded by a relatively robust 2.9 percent. This most recent data point is consistent with the ongoing economic weakness that CERF has been documenting for years.

Table 1: Revisions to Ventura County Jobs and GDP

New and Revised Estimates

The release provided economic growth estimates for 2023, the first time that the BEA has provided such county-level estimates for that year. The Ventura County estimate for 2023 is for growth of 0.7 percent. Table 1 provides two sets of Ventura County GDP growth figures, one from a year ago (“Dec. 2023”), and another from the recent release (“Dec. 2024”). From comparing these annual data releases, we can see that the BEA has upwardly revised Ventura County’s economic growth by varying magnitudes for 2020 to 2022, as shown. Over the entire span of time currently published by the BEA, the average revised Ventura County growth is higher by 0.18 percent. This is a welcome but relatively small change.

Table 1 also provides two sets of Ventura County Non-Farm Job Growth numbers for reference. As with GDP growth, the job growth data are shown as they were understood to be a year ago “Dec. 2023”, and again using the latest available data “Dec. 2024”. The revisions to the jobs growth figures in 2021 (downward) and 2022 (upward) essentially cancel each other, but 2023 job growth rate was dramatically revised downward. The recent data implies that job growth rate fell from 4.0 percent in 2022 to 0.8 percent in 2023, a very large fall.

Updated population data also confirm relatively slow Ventura County growth. The DOF estimates 823,860 Ventura County residents for Jan. 1. 2024, which is about 2,100 residents lower than the year prior. This is a contraction of 0.3 percent and is close to Ventura County’s post-pandemic average contraction of -0.5 percent population growth.

Comparisons of updated GDP, jobs, and population data indicate that Ventura County’s economic vitality has not materially changed since a year ago.

Table 2: Economic Growth – Ventura County, Southern California, and U.S.

GDP Comparisons with Southern California and the U.S.

To provide further perspective, Table 2 shows the latest economic growth data for Ventura County alongside Southern California and the United States.

The upper panel, Panel A, in Table 2 shows that for most years since 2016 Ventura County’s growth has typically been substantially slower than either of Southern California or the U.S. An important and notable exception is 2020, the year of the pandemic, which I will discuss in more detail below.

The lower panel, Panel B, in Table 2 provides an analysis of growth for three episodes, pre-pandemic (2016 to 2019), the pandemic (2020), and post-pandemic (2021 to 2023). From this comparison we see that while Ventura County performed well below the Southern California region and the U.S. in both the pre-pandemic and post-pandemic episodes, our county clearly outperformed Southern California and the U.S. during the pandemic.

CERF has previously emphasized the relative superiority of our County’s policy-response to the pandemic. Our county’s leaders led the state in efforts to re-open small businesses and schools, and to keep these establishments open longer in the face of multiple COVID transmission waves. The county’s economic contraction during the 2020 recession was noticeably less severe than the region and was less than half as severe as the contraction experienced across all counties in the United States. This illustrates the often-repeated CERF statement that policies matter. Allowing economic activity for businesses and for households, versus shutting down economic activity, has significant impacts.

While Ventura County’s policies during the pandemic were superior, the county’s status quo economic development and land use policies, which prevailed for the 20 years prior to the pandemic, are among the most restrictive in the United States. These policies matter too. They exert a strong headwind on the activities of Ventura County households and businesses. They impact people’s lives and provide even greater harm to lower-income households. CERF desires to continue a county-wide conversation that we started a year ago, about the benefits of changing policies to allow and to promote economic growth, for the benefit of all of its citizens.

CERF’s Annual Economic Forecast Event

To this end, CERF is hosting the 2025 CERF Ventura County Economic Forecast Event, the county’s premier networking event, on February 20, 2025 at the Thousand Oaks Civic Arts Plaza. The event and the associated publication will include a deeper dive into the data described in this article. CERF Executive Director, Matthew Fienup will present the 2025 Ventura County Economic Forecast publication with in-depth analysis of the county’s economic and demographic performance and the role of local and regional policies in shaping growth. Fienup will also present CERF’s award-winning U.S. and California Economic Forecasts.

Featured Speaker, Dr. Anthony Bradley, is a Distinguished Research Fellow at the Acton Institute. Bradley is a prolific writer who addresses the intersection of economic and cultural issues and will discuss the importance of inclusive economic growth. This year’s event will also feature comments and analysis from former Ventura Mayor Bill Fulton and current Ventura County Supervisor Matt Lavere. Fulton will discuss the intended and unintended consequences following more than 20 years of SOAR. Lavere will share his personal experience as a Ventura County native and how it informs his work as Supervisor. For more information, visit: Event Info.

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JP Morgan’s assessment that the Federal Reserve has achieved a soft-landing for the U.S. economy is incorrect.

An economic soft landing is where the Fed utilizes their policy instruments to engineer a subtle economic slowdown that brings inflation down to its two percent target from a rate that was higher than two percent for a sustained period of time. Critically, a soft landing is when the Fed accomplishes this without inducing a recession.

The BLS release on October 10^th showed a Core CPI rate of inflation of 3.3 percent, which gives rise to a 6-month moving average that is also 3.3 percent. These inflation readings indicate sustained high inflation, a rate that is 65 percent more rapid than the target of 2 percent.

On a more academic note, the idea of a soft-landing conveys a connotative meaning of policy success. The Fed’s monetary policy for the U.S. should not be deemed a success.

Poor Monetary Policy

The Fed has conducted U.S. monetary policy in an economically harmful manner since 2008 when they embarked on unconventional and not-well-understood market interventions. These included an extraordinary, multi-trillion dollar expansion of the Fed’s balance sheet and payments to banks to withdraw funds from the economy. These “new” policies were combined with interest rates that were too-low for too-long, a regulatory stance which heavily favors large banks, and repeated bailouts of failed financial institutions. All of these interventions have been conducted in a less methodical, or rules-based, manner.

The Fed post-2008 policies have created distortions and miss-allocations of resources in the economy. The prices of long Treasuries and mortgage bonds are heavily distorted, investor portfolios are distorted, and the Fed has incentivized excessive private risk-taking through its bailout practices.

The Fed’s policies since 2008 have benefited Wall Street much more than Main Street. Larger enterprises can much more easily search for yield when interest rates are excessively low. They can more easily hedge risky positions taken to escape lower safe-yields. The U.S. Banking industry is now heavily concentrated with the 5 largest banks, whose total asset value is now approximately $9 trillion, and has relatively few small/regional banks operating following a massive consolidation. The Fed’s bailout practices have incentivized excessive risk-taking by financial institution’s (for the benefit of wealthy clients), where the institution (e.g. Silicon Valley Bank) knows the probability of a no-questions bailout from the Fed is very high.

The Main Street impact of the Fed’s policies include chronically low economic growth since 2008 and, declining real wages since 2020, amidst taxpayer-funded bailouts of financial institutions. There is also the reverse of the impacts noted above, i.e. it is not as easy for the typical household to search for yield when passbook savings yields are excessively low, and there are relatively few regional banks in operation for a more locally appropriate suite of financial services to households and small businesses.

CERF is a Wall Street Journal Economic Forecast Survey participant. A survey question from October (published Oct. 14, 2024) requested that we give Fed chair Jerome Powell a grade for his performance. We gave him an F. With that grade we provide the following reasons for this assessment.

Reason 1 – Policies since 2008

An “A” grade in monetary policy requires a full normalization of the extraordinary interventions undertaken since 2008 (including interest on reserves and a bloated balance sheet). Because the Fed did not normalize policy, economic growth was substantially lower than it should have been and inflation was higher than it should have been. Earning the F grade, Chair Powell has codified the extraordinary policies embarked upon in 2008. The current GDP level is 2.5 trillion dollars lower than what it could have been based on existing trend growth starting in early 2012. Because the Fed has no plan to normalize policy and has perpetuated too big to fail, they have ensured ongoing U.S. economic fragility.

Reason 2 – Unleashing Excessive Inflation in 2021

Chair Powell has presided over what the Wall Street Journal referred to as the greatest monetary policy mistake since the 1970s, in unleashing historically high inflation in 2021, as of today an episode that has not yet ended as described in the Soft Landing section above.

Reason 3 – Their Recent Policy Move

Second quarter GDP growth was 3% and the current 3rd quarter nowcast is 2.5%, yet astonishingly, Chair Powell presided over a 50 bp cut in rates on Sept 18. As a result of this policy we expect Core PCE inflation will rise from current levels rather than subside like the Fed, markets, and most commentators are hoping for. The stock of money supply, at just under $22 trillion dollars is still 37 percent higher than it was pre-pandemic, see Figure 1. This implies that inflation still has legs, and is likely to feel welcome to stick around.

The Fed’s historical mandate was for maintaining price stability (the primary mandate) with a secondary goal of promoting employment. They appear to be shifting their priorities, away from price stability. However, price stability is the explicit economic phenomena that monetary policy is designed to impact. CERF recommends that the Fed rediscover its historical mandate by reemphasizing price stability, and, do this with maintaining a 2 percent inflation target. They should not deemphasize the inflation target in their policy mandate.

Figure 1: U.S. Money Supply

The U.S. legislative process has been engaged in a pattern of short-term expediency and long-term can-kicking (down the road) for some years now. These patterns imply larger deficits and greater debt. Deficits and debt are now at extremely high levels, levels comparable with the fight against Hitler and the Holocaust during WWII, see Figure 2. What war are we fighting now?

Figure 2: The Debt to GDP Ratio

Excessive government spending brings detriment to the real economy, effects that no one wants to occur. The economic problems associated with poor fiscal policy might feel counter-intuitive, as it is natural to use the national income identity to realize that US income rises when government expenditures rise. There is much more than this to the economic impact of government spending.

Excessive government spending is understood to have a short run impact of higher interest rates and lower accumulation rates of human, intellectual, and physical capital. The reduced investment rates reduce current GDP (and income) growth and future productive capacity. These are short to medium run impacts (6 months to 2 years).

Excessive government spending also brings higher future taxation, which leads to lower current and future accumulation rates of human, intellectual, and physical capital. This has the pernicious impact of reducing national medium to long-run productive capacity, which is economically harmful to households, firms, and government. One palpable reality is fewer goods and services (consumer as well as industrial) available for consumers and firms.

Another very harmful impact is reduced GDP growth which reduces federal tax receipts and therefore, reduces Washington DC’s ability to borrow, pay for debt, and ultimately, to spend. These important dynamics are ones in which it is in the best interests of Congress to pay attention to … for its own sake.

A Call for Alternate Policies

Current United States policy trajectories are not likely to be impacted by the recent U.S. Presidential election outcome. For both Fiscal and Monetary policies, voters need to require policy changes (and accountability) from the entirety of the Washington D.C. establishment: the Democratic Party, the Republican Party, and key policy-setting agencies, including and, especially, the Federal Reserve Board.

As much as Monetary Policy has damaged our economy for decades now, I have become most concerned for the harm to the U.S. economy from the current Fiscal Policy trajectory. Voters should require that policy-makers embark on a sequence of Fiscal Policy changes that alter the trajectory to achieve long-term sustainability.

The Fed should conduct a less economically-harmful Monetary Policy. This includes a more generally rules-based and traditional approach including a dedicated focus on price stability. It also includes a reemphasis of Main Street over large financial institutions, with no bailouts of excessive private risk-taking.

The post United States Economic Update appeared first on Center for Economic Research and Forecasting.

The Inaugural U.S. Latina GDP Report builds directly upon six annual U.S. Latino GDP Reports released since 2018 as well as eight State and a dozen Metro Latino GDP Reports written in partnership with Bank of America. Those reports provide a factual view of the large and rapidly growing economic contribution of Latinos living in the U.S. and document substantial economic growth premiums enjoyed relative to Non-Latinos. These premiums exist across a wide range of economic indicators, and Latino economic premiums are large – for example, U.S. Latino labor force growth is 9 times faster than Non-Latino labor force growth. U.S. Latino GDP growth is 2.4 times faster than Non-Latino GDP growth.

Analysis of U.S. Latinas reveals that, in almost every case, the economic growth premium enjoyed by Hispanics females is even larger than the already impressive premium for all Hispanics. It is not enough then to say that U.S. Latinas are drivers of economic growth and a critical source of resilience for the broader economy. They are drivers of economic vitality. U.S. Latinas are giving life to the U.S. economy, dando vida a la economía.

Dando Vida a la Economía | the Latina GDP

The 2021 U.S. Latina GDP is $1.3 trillion, up from $661 billion in 2010. The total economic output of Hispanic females in 2021 is larger than the entire economy of the state of Florida. In fact, only the GDPs of California, Texas and New York are larger than the U.S. Latina GDP.

As with the broader Hispanic economy, while impressive for its size, the Latina GDP is truly remarkable for its rapid growth. From 2010 to 2021, the economic contribution of Latinas grew a total of 51.1 percent. Over this entire period, the real GDP of Hispanic females grew 1.2 times the rate of Hispanic males’ GDP and an astonishing 2.7 times the rate of Non-Hispanic GDP.

Educational Attainment

Dramatic growth of Latina GDP is driven by rapid gains in human capital. Educational attainment grew rapidly for Latinos of all genders from 2010 to 2021. During those years, the number of Hispanic females with a bachelor’s degree grew a total of 103.0 percent, while the number of highly educated Non-Hispanic females grew just 38.3 percent. In other words, over the entire period that we examine, Latina educational attainment grew 2.7 times that of Non-Hispanic females in the U.S.

Labor Force Participation

Rapid growth of educational attainment is accompanied by strong labor force participation. The Latina labor force participation rate has grown steadily from 2000 to the present, adding 7.5 percentage points over two decades. During this same period, the labor force participation rate of Non-Hispanic females was essentially flat. The Latina labor force participation premium, relative to Non-Hispanic females, has grown steadily since 2010 and currently sits at an all-time high of 2.5 percentage points. Latinas, who started the century with a labor force participation rate a full 5.0 percentage points lower than Non-Hispanic females are now 2.5 percentage points more likely to be actively working than their Non-Hispanic female counterparts.

Income

Rapid gains in real income naturally flow from Latinas’ strong gains in human capital. While all Latino incomes grew strongly from 2010 to 2021, Hispanic females saw even stronger gains than Hispanic males. Compared to Non-Hispanic females, this income growth is especially noteworthy. From 2010 to 2021, the real incomes of Hispanic females grew a total of 46.0 percent compared to only 18.5 percent for Non-Hispanic females. In other words, Latinas enjoy an income growth rate that is 2.5 times that of their Non-Hispanic female counterparts.

COVID-19 Pandemic and the Latina GDP

According to the dominant narrative, Latinos as a demographic cohort should have been knocked down by the COVID-19 pandemic. Yet, examining the impacts of COVID-19 through the lens of the Latino GDP reveals a very different narrative.

From the pre-pandemic peak of economic activity to 2021, real U.S. Latina GDP grew a total of 7.7 percent. This eclipses the 1.5 percent growth of Non-Hispanic GDP over the same period.

The strength of Latina GDP growth during the pandemic is consistent with the extraordinary growth of Latina incomes. Over the first two years of the COVID-19 pandemic, the real wage and salary income of U.S. Latinas increased a total of 9.3 percent, while Non-Hispanic income declined by a total of 1.7 percent. The extraordinary efforts of Latinas during the darkest days of the COVID-19 pandemic and throughout the economic recovery that followed gave life to the U.S. economy, at a time of desperate need.

Given the remarkable growth of the U.S. Latina GDP and other important trends outlined in this report, we expect that Latinas will continue to enjoy substantial growth premiums and provide greater vitality, giving life to the economy, dando vida a la economía, for the foreseeable future.

To access the full U.S. Latino GDP Report, please visit www.LatinaGDP.us

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I started tracking, modeling, and forecasting Ventura County (along with the San Luis Obispo, Santa Barbara, and Los Angeles County economies) in 2000. The economic growth that was occurring in Ventura County from 1980 through 2007 would have made anyone proud. Not only was the growth explosive, but, it provided high-education jobs that enabled home ownership and social mobility for Ventura County households.  While the overall U.S. economy expanded by 67 percent from 1990 to 2007, our County’s economic size more than doubled, growing by 108 percent.

In addition to modeling Ventura County, we built a tracking system and a forecast model for Thousand Oaks during this time. When the dataset was initially built by a student research assistant, I told the student that the data was wrong. The data showed such sudden and strong growth it appeared like a data entry error. I instructed the student to rebuild the entire dataset, from scratch, a second time. The data ended up the same. After staring at the ceiling for a moment, I apologized to the student. Of course, as many readers may already have anticipated, the Thousand Oaks story mentioned above was driven by the emergence of Amgen and the extended impact that Amgen had by attracting other companies to the region to form a vibrant biotechnology industry cluster. Baxter Bioscience was an example of a second large company who came to the county, as well as a variety of other smaller, but important, companies who are still operating today. These include Latigo Biotherapeutics, who just emerged from “stealth-mode” earlier this month. The city-economies of Oxnard, Camarillo, Moorpark, and Simi Valley were also growing with considerable strength during the 1990s and 2000s, contributing to our county’s economy at a pace well above their weight.

Ventura County’s Recent Economic Experience

As CERF has previously documented, demographic and economic data indicate that Ventura County is contracting. Recently released CA Department of Finance data indicate that the county’s population declined by 4,500 persons over the year ending July 1, 2023. Net domestic migration data indicate an outflow of almost 7,800 persons during that period. According to this data, the county reached peak population of 850,200 persons back in 2016 and population is approximately 25,000 persons lower in 2023. Economic data released in December indicate that the county’s gross domestic product (GDP) declined by 0.4 percent during the year ending December 31, 2022. This is noteworthy given that the U.S. grew 1.9 percent and 2022 was a recovery year, where the broader U.S. economy was accelerating away from the trough of the Pandemic-induced recession. The GDP data indicate that while the U.S. and California grew by 30 and 44 percent respectively from 2007 to 2022, Ventura County’s economy shrank by 12.4 percent. Not only did Ventura County reach “peak economy” but this occurrence was 17 years ago. This is a stunning result, and a complete reversal of fortune from the 1990 to 2007 experience.

The Case for Growth

Residents and immigrants continue to believe in the vision that they have the opportunity to better themselves economically in America. This mobility is tightly connected to economic growth. From Dani Rodrik, Ford Foundation Professor at Harvard University: “Historically nothing has worked better than economic growth in enabling societies to improve the life chances of their members, including those at the very bottom.”[1]

Along with the benefits of economic mobility economic growth results in higher salaries and standards of living. These in turn are essential components of quality of life. A lack of economic growth, as has occurred in Ventura County, means that only the insulated economic elites can access the quality of life that Ventura County is famous for.

Conditions for Growth and Socio-Economic Mobility

Given the benefits of economic growth we can think about providing a Ventura County environment where companies and households can flourish, in turn, re-stimulating our economy. Any company who wants to locate or expand in Ventura County will have unique needs which policy makers cannot necessarily anticipate. Providing an environment of reduced red-tape, clear and consistent guidelines for real estate development, and timely review of proposals and applications would create more opportunities for broader economic growth. Related to this is land-use policy, that broad set of guidelines that set the stage for real estate and economic development.

Ventura County has the most restrictive land-use regulations in the United States. From Matthew Fienup, CERF Director, in 2017:

A series of eight City and one County land use measures, known collectively as Save Open Space & Agricultural Resources (SOAR), require voter approval of any expansion of urban areas—and residents have a decidedly one-sided record of rejecting urban expansion.

I understand that SOAR was an attempt to maintain Ventura County’s land use patterns, including abundant agricultural resources. However, through a lack of land usable for development, a lack of housing affordability, and a lack of workforce growth, this regulatory environment has contributed to our contracting economy and has created a lack of opportunity among the most vulnerable.

Economies need housing, and at a reasonable cost, in order to flourish. The out-migration of people from Ventura County speaks for itself as it signals residents’ lack of ability to afford the housing type that they need for building their careers and families. This hollows-out our county in many ways but is especially pertinent for the labor force our companies need.

We have well-documented cases where a Ventura County company was not able to expand or continue operations due to a lack of workforce. And, we have well-documented cases where the lack of workforce was due to a lack of housing. In 2017, Amgen began a process of moving employees in Human Resources, IT, and Discovery Research and Translational Science to locations outside the county, including to Tampa Florida and Cambridge Massachusetts.[2] This example of a high-salary employer moving divisions, all or in part, outside the County has contributed in part to the County’s reduced economic activity. From Matthew Fienup, again in 2017:

We trust local employers when they communicate what makes it difficult to conduct and grow business in Ventura County. Amgen, the world’s largest independent biotechnology company, recently announced plans to pare its Thousand Oaks based workforce by nearly 10 percent.  At the same time, it is building a new, 136,000 square foot facility in Tampa, Florida.  The reason Amgen cited for moving from Ventura County to Tampa: “affordable cost of living and the potential for growth.”

Ventura County housing availability is indeed in a relatively low state. For 2023, the new residential unit building permit rate was 1.3 homes per thousand population, which compares to 4.3 homes per thousand population for the United States and is even dramatically lower than California’s dismally low rate of 2.6 homes per thousand. In December of 2023, the County’s median price for an existing single-family home was $882,500. I emphasize that this is the median price, thus, this is not the price for a particularly nice home, large home, or recently built home. That type of product would be substantially more expensive; in point of fact, existing housing of that type will often sell for over $1 million dollars in Ventura County. This median price compares to $387,000 for the United States, which itself is a price that is over-boosted by two factors, a lack of building (not restricted as in Ventura County as noted above) and by monetary policy.[3] Our county’s housing cost is a dramatic 2.3 times higher cost than for the nation.

Given the housing costs, thirteen percent of Ventura County’s households can afford the median priced single-family home. This housing affordability rate is punishingly low relative to the overall U.S. measure of 34 percent. It also positions Ventura County as the single most unaffordable metropolitan area in the entire country, less affordable even than the Los Angeles and San Diego Metro Areas, according to the National Association of Realtors. Low housing affordability not only hampers the overall economy through a departure of jobs and workers to other locations in the U.S., but also is a driver of income inequality since those households who cannot afford ownership-housing cannot use home ownership as a rung to climb the socio-economic ladder. A lack of housing affordability creates a socio-economic barrier to our lower-income households, preventing or making very difficult, their pursuit of a higher quality of life.

A Call to Action

My hope is that CERF can partner with many different entities across the county to enact change. Changes that will make our county more conducive to company location, household location, home ownership, and population growth. This should include a change to policies and regulations, including land-use regulations. Our collective goal is to re-ignite economic growth, and through this, improve quality of life for all residents and provide opportunities for individuals, companies, and households who are hard-working and innovative to climb the socio-economic ladder.

CERF will hold its Ventura County Economic Forecast event on the morning of February 28^th in the Thousand Oaks Civic Arts Plaza. Our theme this year is The Case for Growth. The programming of the event includes conversations on growth from a variety of perspectives, including from a broad point of view as well as in-depth personal stories from Ventura County citizens.

CERF Executive Director Matthew Fienup and I invite you to the event on the 28^th to help us initiate a community-wide conversation on changes to policies that will promote growth and bring economic opportunity to Ventura County.

[1] Dani Rodrik, Harvard University One Economics, Many Recipes: Globalization, Institutions and Economic Growth (2007)

[2] https://www.vcstar.com/story/money/business/2017/03/27/amgen-announces-layoffs-and-relocations-thousand-oaks/99688980/

[3] The Fed’s excessively stimulative monetary policy since 2008 has induced households to search for yield across all asset types, including real estate.

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The BEA published updated Ventura County Gross Domestic Product (GDP) figures Thursday, December 7, 2023. The release provides revisions to all U.S. county-level GDP measures for the years from 2017 to 2021, and provides previously unreleased estimates for 2022. Strikingly, in 2022, Ventura County’s GDP contracted by 0.4 percent, whereas Los Angeles County’s economy expanded by 2.1 percent and the broader U.S. expanded by 1.9 percent.

Previously Unavailable Data

The release provided economic growth estimates for 2022, the first time that the BEA has provided estimates for that year. The Ventura County estimate for 2022 is for a contraction of 0.4 percent, whereas Los Angeles County’s economy expanded by 2.1 percent, the state’s economy expanded by 0.7 percent, and the average of all counties across the U.S. expanded by 1.9 percent. It is remarkable that Ventura County experienced an economic contraction in 2022, a year in which the nation was still expanding from the 2020 recession. Ventura County’s 2022 job growth was 4.4 percent, illustrating a continuation of a dynamic that CERF has documented before, namely, that job growth is in relatively low-paying sectors which provides jobs, but does not provide income and GDP growth for our county.

Revisions to Previous Estimates

The release provided revisions to GDP data prior to 2022. Ventura County economic growth was revised up in 2018 (from 0.3 to 1.2 percent), down in 2019 (from 2.4 to 1.7 percent), up in 2020 (from -1.3 to -1.0 percent), and up in 2021 (from 3.0 to 3.4 percent).[1] Comparing revisions to average growth rates pre and post-pandemic, Ventura County’s averages, pre and post-pandemic both rose post-revision. The 2018-19 average was 1.3 percent growth, while its post-revision average is 1.5 percent (Table 1), and the 2020-21 average was 0.9 percent, while its post-revision average is 1.2 percent. I applaud the upward growth revisions, however, given that Ventura County experienced seven percent economic growth during 2000 through 2007, a relatively normal episode of history, these upward growth revisions are relatively small.

Table 1: Economic Growth

To provide further perspective, Table 1 also shows the economic growth revisions for Los Angeles County, California, and the United States. As was the case for Ventura County, growth revisions for both California and the United States were up compared to previous estimates.  California’s pre-pandemic growth was revised up from 3.7 to 4.0 percent, and its post-pandemic growth was revised up from 2.8 to 3.1 percent. The U.S.’s pre-pandemic growth was revised up from 2.6 to 2.7 percent and its post-pandemic growth was revised up from 1.6 to 1.8 percent. Using the latest estimates, Ventura County’s average 2018 to 2019 pace of growth was 46 percent slower than the U.S. and its 2020 to 2021 growth was 31 percent slower.

Regional Comparisons

To provide further perspective Table 2 provides the BEA’s latest growth figures for Ventura County as well as for Southern California counties. Ventura County was the only Southern California county to experience economic contraction in 2022. Ventura County’s 2022 contraction of 0.4 percent compares to the regional Southern California average of an expansion of 1.6 percent. This is a significant comparison, indicating our county’s lack of growth relative to neighboring counties for which Ventura County has significant economic inter-dependencies.

Table 2: Economic Growth – Southern California Comparison

Episodes of Growth

The lower panel in Table 2 provides measures of economic growth across three episodes, pre-pandemic (2016 to 2019), pandemic (2020), and post-pandemic (2021 to 2022). From this comparison we see that while Ventura County performed well-below the Southern California region in both the pre-pandemic and post-pandemic episodes, our county outperformed the region during the pandemic, and as well, outperformed the state and the nation.

CERF has emphasized the relative superiority of our County’s policy-response to the Pandemic in previous analyses. Our county’s leaders led the state in efforts to re-open small businesses and schools, and to keep these establishments open longer in the face of COVID transmission waves. This effort is visible in the County’s growth data, where the contraction during the 2020 recession was noticeably less severe than most of its peers, and was less than half as severe as the contraction experienced across all counties in the United States. This illustrates the often repeated CERF analysis that policy matters. Allowing economic activity, for businesses and for households, versus shutting down economic activity, has significant impacts, especially for lower-income households.

While Ventura County’s policies during the Pandemic were superior, the county’s status quo economic development and land use policies, which prevailed for the 20 years prior to the pandemic, are among the most restrictive in the United States. These policies matter too. They exert a strong headwind on the activities of Ventura County households and businesses. CERF desires to initiate a county-wide conversation about the benefits of changing those policies to allow and to promote economic growth, for the benefit of all of its citizens, and simultaneously, for the benefit of our local and regional governments as well.

CERF’s Annual Economic Forecast Event

To this end, CERF is planning for Growth to be the main theme of our upcoming February 2024 Economic Forecast event, the county’s premier networking event. This year’s conference will provide a comprehensive assessment and outlook of the county’s economy and demography. The event, and the associated publication, among many other things, will feature a deeper dive into the data described in this article. It will also include a Ventura County forecast provided by CERF’s Matthew Fienup, other nationally recognized speakers, and most importantly, stories from Ventura County citizens about their experiences, illuminated by the policies in which we operate. For more information regarding the details of the 2024 Ventura County Economic Forecast event, please visit: https://www.clucerf.org.

[1] “2022 Vintage” indicates BEA County GDP data published 12/8/2022, whereas “2023 Vintage” indicates GDP data published 12/7/2023 (see Table 1).

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