Led by the surging California economy, the 12th District economy expanded at a vigorous pace in 1997. District growth during the first two months of 1998 was solid but below the fourth quarter 1997 pace.
Recently revised payroll employment data show that all areas of California picked up substantially between 1996 and 1997, as the rate of nonfarm job growth accelerated from 2.7 to 3.8 percent.
The construction and manufacturing sectors have provided a key impetus to the District’s expansion. For the District as a whole, both sectors show little or no signs of slowing; however, real estate markets and construction activity are cooling in some states as they heat up further in California.
Data for banks headquartered in the 12th District show strong earnings and healthy asset quality in the fourth quarter of 1997. In addition, data from a sample of large California-based banks show solid loan growth for the same period.