The California and national economies are expected to rebound from a sluggish first quarter and continue on an upward trend through 2016, thanks in part to a housing market that continues to improve, according to a UCLA forecast released on June 11.
In his outlook for California, UCLA Anderson Forecast senior economist Jerry Nickelsburg wrote the State would continue to benefit from improving conditions across the globe.
“The factors which have driven California employment and income growth to higher rates than the U.S. are still in play,” Nickelsburg wrote. “As the world economy improves once again, and as investment by firms in the U.S. grows, California will once again have a disproportionate share of that improvement.”
Nickelsburg predicted total statewide employment growth of 1.8 percent this year, 2.4 percent next year and 2.1 percent in 2016. Meanwhile, unemployment will continue to fall, averaging about 7.7 percent for this year, then dropping to 6.8 percent and 5.9 percent over the next two years, he wrote.
He noted that the state’s housing markets are returning to normal, despite concerns about rising home prices and flat to negative growth in new home sales.
“While construction is still not a barn burner, and is still not uniform across the state, we continue with our view that there will be a recovery in home construction before the end of the forecast horizon,” Nickelsburg wrote.
On the national front, UCLA Anderson Forecast director Edward Leamer wrote that the U.S. economy will continue to face serious issues, “the most important of which are a workforce ill-suited to the reality of a post-industrial 21st Century world, and too many elderly and not enough working stiffs.”
“Despite the longer-term concerns, we see growth of real GDP bouncing back in the second quarter,” he wrote.
Leamer said unemployment would continue to trend downward over the next two years, reaching 5.4 percent in 2016.
