NEWS

Economy May be Weaker than it Looks

LOS ANGELES (June 5, 2019) – In its second report for 2019, the UCLA Anderson Forecast offers new recession predictions based on the most recent GDP data and the most recent bond market data.

While the U.S Department of Commerce’s release of a 3.1% growth rate for GDP in the first quarter was celebrated as evidence there is no recession in the near future, a closer look at the details behind that 3.1% number leaves little reason for celebration. Similarly, recent employment data may not appear as robust as reported, which affects the outlooks for the nation and California.

The current forecast opens with a paper on research by UCLA Anderson Professor Emeritus Edward Leamer that searches for recession precursors. “The first step toward making a recession forecast is looking at what was unusual in the four quarters before recessions,” he writes. [...]
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CA FORECAST

A New Monthly Indicator of the CA Economy

As predicted, the California economy is slowing down. The State is, quite simply, running out of people to be employed. The unemployment rate from Marin County to Santa Clara County is below 2.5%, from Sonoma through the East Bay below 3%, and in Southern California, with the exception of Los Angeles, at or below the U.S. rate of 3.6%. To be sure, the inland regions are not doing as well by this measure, and the impact of the trade war with China is beginning to be felt. Nevertheless, economic prosperity has clearly become the norm in California today.

These contemporaneous measures of the health of the California economy are primarily based upon employment statistics, available a short time after the end of the month. However, employment is only part of the picture. The slow growing and contracting sectos such as non-durable goods manufacturing and retail and rapid growing sectors such as information and scientific and technical [...]
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