The UCLA Anderson School’s latest forecast calls for the U.S. economy to grow 3 percent annually through 2016, with unemployment falling nationwide and in California.
The forecast predicts the economy will generate 200,000 to 260,000 jobs monthly, reducing the unemployment rate nationally to 5 percent by the end of 2016. Unemployment in California will drop to 5.3 percent by then.
Senior Economist David Shulman, the author of the national forecast, sand this growth will bring “a sense of economic progress on Main Street.”
He said the recent drop in oil prices from around $100 to under $75 per barrel will be a significant benefit for the national economy. “Should the oil price remain at this level, and we expect it will, there will be huge benefits to consumers,” he said.
California’s unemployment rate will come down over the next two years, averaging 6.6 percent in 2015 and 5.6 percent in 2016, according to the forecast. As the employment situation improves, growth in real personal income will exceed the national average by rising 4.5 percent in both 2015 and 2016.
“The transformation of the Golden State to the information economy of the 21st Century will continue apace,” said Senior Economist Jerry Nickelsburg. “The real implication is that having the appropriate skills in the labor force is critical to keep the faster-than-the-U.S. economic growth going for the long-term.”
Economist William Yu said Los Angeles must invest in transportation and residential infrastructure because it has become the most congested metropolitan area in the United States. Making these investments will bring down the cost of housing, and make it easier to attract talent.
The UCLA Anderson Forecast is one of the most widely watched economic forecasts for California and the nation.
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