VISALIA – Despite a devastating pandemic, harsh inflation and a turbulent political climate, Tulare County has reasons to feel good about their near term economic prospects, according to Dr. Chris Thornberg. But it’s hard to ignore the heavy concerns over immigration and housing that are casting a shadow in the mid to long-term forecast.
Dr. Thornberg presented his 2025 economic forecast to local business leaders and elected officials at the Visalia Convention Center on Friday, March 21. Thornberg set the tone with a message that while Tulare County’s consumer base remains strong, labor shortages and housing issues threaten to undercut its progress.
For Thornberg’s bright side, local data underscored his point that the economy in the region is going well. Nonfarm employment grew 10.7% since February 2020, far outpacing state and national averages. According to regional figures, payrolls in Tulare County increased by 2% between December 2023 and December 2024, and average weekly wages surged by nearly 12.8% in the same period. Unemployment also fell by .8% in December 2024 to 10.5%.
However, labor growth over the past year alone has been tepid. “We don’t have enough workers in the nation,” Thornberg stated. “We don’t have enough workers in California and we don’t have enough workers in Tulare County.”
For labor growth, Thronberg reported only a 0.2% increase from December 2023 to December 2024. But he noted this is a problem everywhere, not just in the region.
Still, the lack of labor has not dampened business growth. According to Thornberg, despite the impressive growth in jobs since the pandemic, local businesses have reported difficulty in filling positions, which Thornberg said could threaten businesses plans for future expansion. He noted that Tulare’s agricultural sector stands to face additional pressure if labor shortages persist.
In addressing the workforce challenge, Thornberg highlighted a demographic shift within the county’s labor force. Over the last decade, there has been a significant decline in workers with less than a high school education, while those with higher education credentials steadily increased. In 2023, workers with a bachelor’s degree or higher accounted for 20.2% of the labor force, up from 16.1% in 2013.
Although, even if labor was not necessarily an issue, the question quickly becomes: where would they live?
“Housing and housing development need to be a critical part of the conversation,” Thornberg said, drawing attention to the county’s ongoing struggle with affordability and limited inventory.
Home prices in Tulare have continued to rise even as the percentage of income spent on housing has decreased slightly since 2018. According to Thornberg the market has seen modest reprieves, such as when the Federal Reserve cut interest rates by three-quarters of a percentage point last year, lowering the 30-year fixed rate to around 6%. However, early in 2025 mortgage rates crept above 7% before settling back to approximately 6.9%, adding to the concerns of potential buyers.
This is far from the first time Thornberg has brought up the issue of housing in Tulare County, chastising the state’s housing policy as the key contributing factor.
In a brief Q&A following his presentation, Thornberg joked that California’s over regulation was “140% the reason” why there is not more housing development in the state, therefore hampering the opportunity to build more homes.
Thornberg said that California’s overall housing shortage has led to increased pressure on local governments to streamline permitting processes and encourage new development. In Tulare County, where affordable housing remains a relative strength compared with other parts of the state, the balance between maintaining affordability and increasing supply remains a delicate one.
Aside from the local issues of labor and housing, Thornberg spent a considerable amount of time in the broader political and policy arena. Admitting that President Donald Trump is “shaking things up,” Thornberg noted that many of the president’s executive orders are more “smoke than fire.”
And to some attendant’s surprise, tariffs were not a larger part of Thornberg’s presentation. He argued that while political debates focus on tightening immigration or revising tariffs, the news coverage has overreacted on the potential of a recession.
“Can tariffs cause a recession over time? I don’t think so,” he said, noting that while tariffs may add costs for businesses, they are unlikely to derail a consumer-driven economy. “(Tariffs) will cause a problem, and if it gets really, really bad, then maybe (it causes a recession).”
NARRATIVES & DEFICITS
Thornberg opened and closed his presentation with the concept of narratives. He noted that the economy is set to be strong in the near-term, but “as for the national mood, it’s shockingly negative.” While he didn’t spare national media companies or politicians for their part in perpetuating a negative narrative, he bluntly stated that “politics are a reflection of us.”
Getting to the essential argument that if the public were more conscientious news consumers, the country’s politicians and media companies would better reflect that reality.
And as for the mid to long-term forecast, Thornberg pointed to the national deficit as a going concern with no plans to wrestle it. In his presentation he noted that the national deficit (not to be confused with the debt) is 7% of the gross national product (GDP). And it’s expected to widen as insolvency looms for social security and medicare benefits approach insolvency.
Worse yet, the US has become increasingly reliant on global investors to make ends meet. In Thornberg’s presentation, the nation’s deficit is widening again, and the only extended period where the US borrowed “this much from the rest of the world occurred in the run-up to the Great Recession.”
“In short, the United States has been on a massive borrowing spree, raising questions about when lenders might start to worry about being repaid,” as stated in Thornberg’s presentation. “With the Fed on the sidelines and the new administration unlikely to tighten the nation’s fiscal belt, expect the US economy to continue on its current growth…in the short term. But all parties come to an end.”
