California’s economy will continue to show steady but unremarkable growth in the months ahead, sustaining what has been a “painfully plodding” recovery from the national recession, according to a UCLA economic forecast released Thursday.
UCLA senior economist Jerry Nickelsburg wrote in his forecast for the California in the Anderson Forecast quarterly economic outlook that although job numbers are at an all-time high, the state is still performing below its potential in employment and output.
“That we are entering the sixth year of expansion just illustrates how painfully plodding this recovery process has been,” Nickelsburg wrote.
Personal income in the state is expected to grow by 4.4 percent and 4.6 percent over the next two years, slightly better than the nation as a whole, while employment will continue to grow and lower the state’s unemployment rate to 5.7 percent by 2016, according to the forecast.
Housing prices will continue to rise, but the state is continuing to face a shortage of new homes.
“However, construction permits have been increasing and our expectation is that this will continue through the forecast horizon,” Nickelsburg wrote. “The U.S. forecast for new home starts is for them to increase by 5 percent in 2015 and the same is expected for the Golden State. Due to the faster job growth than the U.S. the 2016 forecast for (California) is for 3 percent growth, slightly faster than for the nation.”
Nickelsburg noted that the state’s economy could be affected by new labor, health care and environmental policies, but he also said his forecast may be underestimating the state’s upcoming income and job growth.
“Though these risks exist, the fundamentals of California and the U.S. suggest the most likely evolution of the California economy is one of more of the same — slow, steady and unexpected growth,” he wrote.
— City News Service