Subscribe to INT Podcast
|March 31, 2020|
Economists proclaim recession; California braces for a hit
LOS ANGELES – (INT) – Economists at UCLA have proclaimed that the nation is in a recession that has quickly developed because of the coronavirus. It brings to an end an expansion that began in 2009.
It’s also predicted that it could end by September. But, the economist foresee a much sharper decline in California because it has a larger proportion of economic activity in tourism and trans-Pacific transportation.
The UCLA Anderson forecast issued Monday was based on data reflecting a rapidly changing U.S. economy and a review of an influenza pandemic that swept across the nation in 1957-58.
As for specifics, the escalating effects of the coronavirus pandemic this month have reduced the first-quarter 2020 forecast of GDP growth to 0.4%. GDP for the second quarter of the year is now forecast to slow by 6.5%, and by 1.9% for the third quarter. With the assumption of an end to the pandemic and repaired supply chains by this summer, the Forecast predicts the resumption of normal activity in the fourth quarter of 2020 and a GDP growth rate of 4.0%.
Employment in California is expected to contract by 0.7% this year with employment contracting during the second and third quarters at an annual rate of 2.6%. The state's unemployment rate will rise to 6.3% by the end of this year and is expected to continue to increase into 2021 with an average for 2021 of 6.6%. By the first quarter of 2021, California is expected to lose more than 280,000 payroll jobs with more than one-third of those in the leisure and hospitality and transportation and warehousing sectors.
For the full 2020 year, it is expected that GDP will have declined by 0.4%. In 2021, with the abatement of governmental pandemic expenditures and the continued contraction of residential and commercial construction, the economy is forecast to grow at 1.5%. The full recovery and return to trend is not expected until 2022.
Story Date: March 17, 2020