Twelfth District economic activity has been vigorous thus far in 1997. Nonfarm payroll employment grew by 3 percent at an annual rate during the first four months of the year, slightly below last years pace but substantially above the corresponding national pace.
During the first five months of this year, Californias economy maintained the strong growth trend established in 1996. The state’s yearly rate of payroll job growth places it seventh in the national ranking, and five other states in the District are in the top seven.
District construction payroll growth accelerated to a very rapid pace in early 1997, and the durable manufacturing sector remained vibrant.
Conditions for District banks remained healthy in early 1997, although asset quality has declined to some degree.
Consumer price inflation has increased noticeably in the San Francisco Bay Area in 1997. Other areas of the District with sustained growth, high levels of resource utilization, and tight labor markets also are at risk for increased inflation this year.