There was some good news and bad news, for both Orange County and the nation, presented Wednesday morning during the midyear update of Chapman University's annual Economic Forecast.

One tidbit of local good fortune? Construction jobs, fueled by a strong housing demand and recent home building spike, continue to display the highest rate of growth compared with other industries, said economist Esmael Adibi, who heads the private university's A. Gary Anderson Center for Economic Research.

Furthermore, all other job fields in the county — with the exception of civilian positions with the federal government — are anticipated to add jobs in 2013-14, Adibi said.

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Wednesday's midyear update followed the university's predictions presented in November, which included small gains in job growth, consumer spending and home prices. The event, which the Daily Pilot and other entities sponsor, was held in the Renée and Henry Segerstrom Concert Hall in Costa Mesa.

Adibi also predicted 32,000 more jobs in Orange County and 307,000 jobs in California this year, for a growth rate of 2.3% and 2.1%, respectively.

Since the fourth quarter of 2009 to the end of 2012, some 64,000 payroll jobs have been added in the county — an improvement that is still lower than the peak, pre-recessionary level, he said.

However, because of the numerous military bases and defense contractors based in California, the state will likely take a large hit as federal defense spending is cut, Adibi said.

He also called California's estimated $328-billion unfunded employee pension liability, an amassed figure from state and local governments, "the biggest fundamental problem that we're facing, at least for the next few years." Adibi said that liability was based on the pensions achieving a 5.5% annual investment return.

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National forecast

An undercurrent during the midyear update for the nation's economy took its cue from an unexpected place: a recent line on "The Bold and the Beautiful."

It went something like this: "An economic forecast is like aloha. If it doesn't mean hello, it means goodbye."

Chapman University President James Doti paraphrased the line taken from the CBS television soap opera, where he played "Mr. Chapman" in a brief scene that aired in May.

Proud of his daytime television appearance and the YouTube video that highlights it, Doti repeated it Wednesday morning and used it alongside his predictions.

Doti, who discussed the nationwide economic conditions, said as the nation's recovery period since the 2008-09 recession steadily continues, albeit slowly, there is "a lot of danger in rapid growth."

"And that's because of the [Federal Reserve System's] concern," Doti said, "over the inflationary impact of an economy that's moving into some kind of inflationary trajectory."

If the Fed "gets so nervous" as to abruptly stop its easy monetary policy, Doti warned, it would cause stocks to go down, interest rates to go up and have negative impacts on consumer spending and households' net worth.

It would also hurt the housing market, which Doti said has now achieved an all-time affordability high amid double-digit growth and strong consumer demand

"All of that could come to a quick end if the Fed reverses course," Doti said. "And that's not an idle worry ... "

But while changes from the Fed are possible, "we don't believe it's likely to happen, at least through our forecast horizon of 2014," Chapman's researchers wrote in their June 2013 Economic & Business Review, which was distributed Wednesday.

For 2013-14, Doti also predicted continued increases of around 2% in gross domestic product and consumer spending.

The decline of federal deficit spending is a good long-term goal, though it will hurt real GDP in the short term, especially with the private sector not picking up the spending slack, Doti added.

"The private sector is weak; it's not going to do more," Doti said. "In other words, federal spending in a recession is not crowding out private spending. And if you reduce it, it just means lower spending.

"So this is going to enter the real GDP in a negative way."

The college's 36th annual economic forecast is scheduled for Nov. 25 at the Segerstrom Center for the Arts in Costa Mesa.