Anderson forecasts economic recovery
By Claire Makepeace
June 21, 2009 11:48 p.m.
The national economy is recovering, though slowly, according to the most recent forecast from the Anderson School of Management.
The Anderson Forecast is compiled quarterly by three UCLA economists who use computer models to predict economic trends two years in advance, according to the forecast Web site.
The new forecast was released on June 16. It stated that the national gross domestic product, which has been affected by a downward trend for the past four quarters, will see slight growth in the coming quarter.
Due to its massive budget deficit, California is expected to recover slower than the rest of the nation and will likely not see much improvement until the national economy improves, the forecast continued. California’s economy will likely be weak until the third quarter of 2009 and return to normal growth levels by 2011.
The forecast stated that recovery will be “the weakest economic recovery of the postwar era,” with a growth of only 2 to 3 percent each year.
“The normal driver of the economy comes from sales of homes and cars,” said Edward E. Leamer, a professor of economics and the forecast’s director. “Consumer deadlock makes it very difficult for the normal driver to operate with its usual force.”
The forecast predicted economic recovery will be slowed by the conservative consumer market, as many consumers will be focused on saving rather than on spending.
“The budget crisis is due to government spending, which means a lot of jobs will be cut in the public sector, slowing down recovery,” said Jerry Nickelsburg, an economist who works on the forecast.
The forecast also stated that unemployment rates will continue to rise until and possibly after 2010. The current unemployment rate in California is 10.9 percent, according to the U.S. Bureau of Labor Statistics.
“California has always had and will continue to have above average unemployment rates,” Leamer said.
This trend is caused by California’s unusually large housing bust and sizeable immigrant population, Nickelsburg said.
