Santa Clarita Valley Experts Weigh In On State Of Economy
The Consumer Price Index, an important economic indicator and index for the cost of living, remained unchanged last month, according to statistics released by the federal government Wednesday.
Locally, the picture reflects that stability, with an anticipated decline in gas prices contributing to an environment that’s harboring economic growth, said Jason Crawford, director of economic development for the city of Santa Clarita.
“We’re seeing a stable and improving economy in Santa Clarita,” Crawford said. “And when you look at CPI numbers, they’re showing something that is stable right now, regionally.”
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The CPI affects all Americans because it’s the measure of the average change over time in the prices paid by consumers in major markets.
“When you see the CPI numbers, that’s basically tied to the cost of living,” Crawford said, explaining that the numbers are really useful when taken in context with other economic factors.
“Right now, here in Santa Clarita, we’re seeing a lot of good momentum on the employment rates -- more people are getting jobs, and we’re seeing a lot of momentum in the retail sales, the numbers are increasing,” he said.
Nationally, the seasonally adjusted unemployment rate is 7.8 percent, and the state's rate is 9.8 percent, which matches the county's rate. Santa Clarita's rate is listed at 6 percent on the state's unemployment website.
“I think more important for Santa Clarita, when you look at our unemployment numbers and you look at our retail sales, (that) shows what’s really going on with our economy,” he said.
The CPI is also one of the best ways consumers can gauge inflation based on their day-to-day experiences, according to the Bureau of Labor Statistics.
However, looking at the broader concern with federal developments, said Steve Tannehill, executive director of the Small Business Development Center at College of the Canyons.
“The macro concern out there is that the Fed’s policy to pump money into the economy in order to stimulate economic growth will lead to a jump in inflation,” Tannehill wrote in an email.
“This month’s report indicates that that is not happening, and so, for now, the Fed can continue on its ‘easy money’ policy which keeps interest rates very low which helps economic growth.”
Tannehill pointed to the fact that federal policy is also being buoyed by positive economic indicators:
“This occurred in the face of good economic news,” he said.
"Manufacturing output was up 0.8 percent in December, weekly earnings adjusted for inflation were up 0.6 percent, and retail sales data indicates December was a good sales month. So effectively no inflation in the face of economic growth is particularly good.”
But until the job numbers show large consistent gains to match, we’re not out of the woods, yet.
“It keeps the issue of deflation as a possible concern,” Tannehill added.
Click here for information regarding the state's unemployment picture.