This post was contributed by a community member. The views expressed here are the author's own.

Politics & Government

Economists Predict Slow Growth, Urge Caution

UCLA economists are forecasting that the state economy will grow around 2 percent for the rest of the year.

LOS ANGELES (CNS) - Economic output in California and the rest of the nation will grow only about 2 percent over the rest of the year, mirroring slow but steady improvements in the unemployment picture, UCLA economists said in a forecast released today.

The first quarterly UCLA Anderson Forecast of 2012 -- "while acknowledging an improving employment situation, with more than half a million jobs created in the first two months of the year,'' in the words of its authors -- cautioned against excessive exuberance over current conditions.

"The stronger employment data are not appearing to translate into stronger overall GDP growth,'' Anderson Forecast senior economist David Shulman wrote in a section on the national economy entitled "Curb Your Enthusiasm."

Find out what's happening in Glendorawith free, real-time updates from Patch.

The report lists California's unemployment rate at 10.9 percent, lower than the state Employment Development Department's 11.4 percent figure. Seasonally unadjusted numbers put Glendora's unemployment rate at 6.3 percent, nearly half of what it is for Los Angeles County at 12.1 percent, according to the state figures.

GDP grew nationally by 3 percent in the final quarter of 2011 but real GDP growth will slow to an annual rate of around 2 percent for most of 2012, improving next year and again in 2014, according to the Anderson Forecast, which called this year's anticipated growth "modest."

Find out what's happening in Glendorawith free, real-time updates from Patch.

Shulman argued that this year's unseasonably warm winter weather drove the consumer economy, acting as a job stimulant.

"We suspect that once the weather and the seasonal adjustment factors normalize in March and April, the economic data won't look so ebullient,"
Shulman wrote.

Additionally, "...the looming expiration of all of the Bush era tax cuts and the payroll tax cut will elevate economic uncertainty in the second half of the year," according to the forecast.

The forecast pointed to "continued slow steady gains in employment for the rest of 2012" in California and the nation as a whole and predicted that "international trading partners" would serve to generate faster growth in 2013 and 2014.

It called for slow growth in employment this year in California, "at about the national rate," and said that when the economy picks up in 2013 and 2014, "the drivers" of the state's economy will be technology, exports, health care, education and professional, scientific and business services.

The forecast predicted employment growth in California of 1.9 percent this year, 2.0 percent in 2013 and 2.6 percent in 2014.

California's unemployment rate will be down to 7.7 percent by the end of 2014, according to the Anderson Forecast, which is published by the UCLA Anderson School of Management.

California payrolls will grow more slowly -- at 1.3 percent this year, 1.9 percent next year and 2.5 percent in 2014, according to the UCLA economists. Real personal income will grow 2.4 percent this year, 2.1 percent next year and 3.2 percent in 2014, they said.

--Local Editor Hazel Lodevico-To'o contributed to this report.

We’ve removed the ability to reply as we work to make improvements. Learn more here

The views expressed in this post are the author's own. Want to post on Patch?