The Los Angeles Times reports that a quarterly forecast published by the UCLA Anderson School of Management suggests that "the US and California economies will experience near-record growth this year thanks to widespread vaccinations for COVID-19 and massive federal relief for struggling workers and businesses … California, buoyed by high-earning technology and professional sectors that shifted to at-home work during the pandemic, will recover somewhat faster than the U.S., even though a full rebound in the tourist-dependent leisure and hospitality businesses will lag."
“This is a very ‘good news’ forecast,” said Leo Feler, senior economist of the forecasting group. “We have finally turned the corner.”
Excerpts from the story:
• "In early December, the forecast had predicted 'the ‘20s will be roaring' after the COVID-19 pandemic caused the sharpest decline in economic growth in more than half a century. Now 'the roar is definitely getting louder,' Feler said, estimating that gross domestic product, which shrank by a devastating 3.5% in 2020, will grow 6.3% this year, 4.6% in 2022 and 2.7% in 2023.
"The growth is far faster than it was after the 2009 recession. But payrolls won’t fully recover in the near future, according to the forecast, given the severity of the downturn and the exodus of many workers from the labor force."
• "California has suffered a higher unemployment rate than the nation in part because of stringent pandemic restrictions that shut businesses and schools. In the last quarter of 2020, the state’s jobless rate was 8.4% compared with 6.7% nationwide.
"Economist Leila Bengali and Jerry Nickelsburg, authors of the California section of the forecast, predict Golden State unemployment will average 6.8% in 2021, 5.1% in 2022, and 4.1% in 2023 — still above the pre-pandemic level of 3.9%.
"Golden State payrolls, which shrank 7% in 2020, will expand by 4.1% this year to more than 16.87 million, they estimate. That’s faster than the U.S. rate of 3.6%.
California jobs will grow by 3.1% and 2.3% the following years, according to the forecast."
From their lips…
There is some of this that strikes me as wishful thinking. Though I cannot imagine that there is anyone who does not hope that these economic forecasters are right.
I also try to remind myself that even if we have a second Roaring 20's as we come out of the pandemic, it is important to factor into our thinking that the first Roaring 20's were followed by the Great Depression.