By Gregory J. Wilcox, Staff Writer
Posted: 06/20/2012 12:00:00 AM PDT
California’s long slow slog out of the Great Recession will continue for at least three more years amid tepid job growth and persistent high unemployment, according to a forecast released today.
And there is a critical component still missing in the state and national economies, said the quarterly UCLA Anderson Forecast.
“There has been no recovery,” economist Edward Leamer, the forecast director, lamented in his outlook for the nation.
The problem is that growth in both gross domestic product and jobs has been weak since the recession ended in the second quarter of 2009.
“More of the same is in the cards, although the housing market is turning around, promising there will be growth in the years ahead, even with frugal consumers and frugal governments holding things back,” Leamer said.
He points out that in each of the previous 10 recessions, GDP — the value of goods and services produced in the U.S. — returned to its previous peak within two years. This time it has taken almost four years.
He forecasts GDP growth of 2.4 percent by the end of next year, increasing to 3.4 percent by the end of 2014.
Robert Kleinhenz, chief economist at the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp., said that the state and local economies will likely play out as UCLA predicts.
“If you take a look at past post- recession periods, you’ll find that it took GDP growth in excess of 3 percent or more likely 4 percent to drive down the unemployment rate,” he said.
But that won’t happen for a while, Kleinhenz said.
The state is expected to fare better than the nation, but just barely.
Jobs recovered by 2015
By 2015, California’s economy will have recovered the jobs lost during the downturn, boosting employment back to 15.2 million, the forecast said. But the unemployment rate will still be 7.2 percent.
“We had here in California a very large number of people who were working in residential construction and and manufacturing, and those jobs have gone away,” said Senior Anderson Economist Jerry Nickelsburg, who prepared the state forecast.
“We have seen rapid job growth in the retail and tech sectors, but when you add it all up job growth in California has been subpar.”
Even though jobs will be at their pre-recession level, unemployment will remain high because the state’s labor force will have grown, Nickelsburg said.
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