December 2019 Economic Outlook

 
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UCLA Anderson Forecast
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NEWS

UCLA Anderson Forecast Upgrades Outlook for the Nation as Financial Conditions Improve

LOS ANGELES (December 4, 2019) – Citing “improved financial conditions, a better housing and employment outlook, some relaxation of trade tensions and a modest improvement in business fixed investment,” the UCLA Anderson Forecast has upgraded its national economic forecast through 2020. Instead of calling for 1% real growth for 2020, the Forecast now expects growth to be on the order of 1.7% on a fourth-quarter-to-fourth-quarter basis.

“After going on a separate track from business investment, we forecast a slowdown in consumer spending, largely coming from much weaker automobile sales as credit tightens in that sector,” writes senior economist David Shulman in an essay titled “The Two-Track Economy.” “Overall, the interest rate environment, aside from auto credit, will remain benign,” Shulman writes. “But make no mistake, although we have lowered the risk of a recession, the second half of 2020 remains problematic for the economy.” [...]

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US FORECAST

The Two Track Economy 

We have become a bit more optimistic since our last forecast. Several of our worries have been mitigated. They include:

* After being locked in a 21-month trading range, stock prices have broken out and made decisive new highs. 
* The Fed cut its policy rate by 25 basis points and is supplying additional reserves into the banking system to solve a “plumbing” problem. Although the purpose of supplying additional reserves is not a new quantitative easing program, it might have the same effect with respect to the financial markets.
* The yield curve has returned to a positive slope. Although a yield curve reversal usually occurs prior to a recession, the shortness of the inversion period might very well mute its recession signal.
* Housing activity doing better than previously forecast.
* Better than anticipated employment growth revealed by the October jobs report signaling somewhat faster growth going forward. [...]

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Videos

The Two Track Economy

U.S. Forecast - The Two Track Economy
What is a Recession? Who Should Worry About a Recession? Is there a Recession Coming Soon?

U.S. Forecast - What is a Recession? Who Should Worry About a Recession? Is there a Recession Coming Soon?
Slow Growth and Full Employment Entering the New Decade

CA Forecast - Slow Growth and Full Employment Entering the New Decade
Public Pension Plans, the Ecoomy, and Investment Return Assumptions

CA Forecast - Public Pension Plans, the Ecoomy, and Investment Return Assumptions
The Outlook for Financial Markets in 2020

Keynote Address - The Outlook for Financial Markets in 2020
December 2019 Forecast Panel

Expert Panel - Volatility of Fiancial Markets
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UCLA Anderson Forecast in Partnership with The Fink Center for Finance & Investments present

December 2019 Economic Outlook

The volatility of financial markets in 2019 has given pause with respect to recession probabilities and the future of asset markets. Will the whipsaw of bond and equity prices continue? How will the Fed react in an economy with good employment numbers, but elevated risks. The December 2019 UCLA Anderson Forecast will untangle many aspects of these questions, including the relationship between the financial and real estate sectors as it looks to the economic and financial outlook for 2020.

Agenda
7:30 - 8:30a Registration + Breakfast
8:30 - 8:40a Welcome + Introductions
Jerry Nickelsburg, Director, UCLA Anderson Forecast
8:40 - 10:05a UCLA Anderson Forecast for the Nation and California
David Shulman (MBA '66, Ph.D. '75), Senior Economist, UCLA Anderson Forecast
Jerry Nickelsburg, Ph.D., Director, UCLA Anderson Forecast
Edward Leamer, Ph.D., Professor Emeritus, UCLA Anderson School
William Yu, Ph.D., Economist, UCLA Anderson Forecast
Leila Bengali, Ph.D., Economist, UCLA Anderson Forecast
Q + A with the Forecast Team
10:05 - 10:20a Break
10:20 - 10:50a Keynote Address
Vijay Srinivasan ('01), Chief Investment Officer, Scarsdale Capital LLC
10:50 - 11:45p Expert Panel: Volatility of Financial Markets
Moderator: David Shulman (MBA '66, Ph.D. '75), Senior Economist, UCLA Anderson Forecast
Joseph Brusuelas, Chief Economist, RSM US LLP
Mark Garmaise, Ph.D., Professor of Finance, UCLA Anderson School
Arthur Hovsepian ('06), Principal, Payden & Rygel
Jia Ye, Ph.D., Partner and Co-Chief Investment Officer, First Quadrant
Key Topics
What is a recession and who needs to worry about it?
What are the prospects for a recession soon??
Will the 10-year bull market in stocks continue into the new decade?
Have interest rates bottomed or are they headed for zero?
Is California's GDP still growing?
When will the housing market recover?
Can California solve the housing affordability crisis in the next few years?
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