The UCLA Anderson School economic forecast is out and it's grim reading:
The National Forecast
In his June 2011 report, UCLA Anderson Forecast Director Edward Leamer predicts “normal growth” for the U.S. economy through 2013, with “normal” defined as “3% GDP growth with payrolls growing at 150,000-200,000 per month and unemployment stuck at high levels.” But “normal” does not equate to a “recovery.” In the report, titled “No Recovery In Sight,” Leamer differentiates between normal growth and the type of growth necessary for real recovery from the recent recession. In a “recovery,” the economy would experience “5-6% growth with payrolls growing at 250,000-300,000 per month and unemployment falling noticeably.” The differentiation is not a matter of semantics. Leamer notes that a recovery is not simply a matter of the economy returning to where it was when the recession began; instead it’s a return to trend – a matter of the economy getting to where it would have been had there been no recession – and that requires more than 3% GDP growth.
The California Forecast
California’s forecast, authored by Senior Economist Jerry Nickelsburg, remains substantially the same as it was in March – a continuing period of slow growth with stress in the labor markets. In his report, titled “A Breather in the Process of Recovery,” Nickelsburg cites two key elements impeding California’s recovery. The first lies in the national forecast, which calls for slower growth in consumer spending. The second is a shift occurring in the residential construction sector.
The forecast calls for 1.7% employment growth in 2011, 2.4% in 2012 and 3.1% in 2013. Unemployment will continue to fall through the year, averaging 11.7% in 2011. Employment growth won’t push the unemployment rate below double-digits until the second quarter of 2013, reaching 9.2% by the end of that year. Real personal income growth is forecast to be 1.7% in 2011, and 3.3% and 3.8% in 2012 and 2013 respectively.