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UCLA Anderson Forecast Predicts Two Years of Job Weakness
The UCLA Anderson Forecast team updated its views, downgrading the near-term outlook in response to the rapid decline of the U.S. economy amid the coronavirus pandemic. Real GDP is now on track to decline in the second quarter of 2020 by 7.5% from the previous quarter (an annual rate of -30%), and decline by an additional 1.25% in the third quarter (an annual rate of -5%), according to senior economist David Shulman.
This contraction will drive the official unemployment rate to a peak of around 13% in the fourth quarter, and total job loss to approximately 17 million. The economy is forecast to rebound by 1% in the fourth quarter (an annual rate of 4%). The rate of growth is expected to accelerate in early 2021 as the effects of COVID-19 abate; however, a recovery to an employment level equivalent to the last months of 2019 will not occur until late 2022.
UCLA Anderson Forecast Director Jerry Nickelsburg expects California’s unemployment rate to be higher than for the U.S., predicting that it will peak at more than 16% with 2.2 million jobs lost in the state. A sharp contraction in income and taxable sales will cause increased stress for state and local government at a time when the demands on them are increasing. As with the U.S., employment in California will not return to its previous peak levels until late 2022.
For comments, questions or concerns, please contact Dennis Kaiser
- ◦Economy
