The latest UCLA Anderson Forecast calls for robust national economic growth through 2016 with steady gains in employment for California.
Despite a winter hiccup for the second year in a row, the nation’s economic growth is expected to return to a 3 percent rate by the third quarter and that pace should hold through the end of 2016, according to the forecast released Wednesday.
“At that rate of growth, the economy will likely be generating jobs at a 250,000 per month clip and the unemployment rate will close out 2015 at just below 5 percent,” the economists said.
The California forecast, authored by Senior Economist Jerry Nickelsburg, said that the increase in U.S. growth rates from construction, automobiles, and business investment, as well as higher consumer demand, will translate into a steady decrease in the unemployment rate in California during the next eighteen months. The rate will hover around 6.2 percent for the rest of 2015, then fall through next year, averaging about 5.2 percent.
“We expect California’s unemployment rate to be insignificantly different from the U.S. rate at 4.9 percent during the forecast period,” says Nickelsburg, “and employment growth to then be constrained by the growth in the U.S., immigration, and natural growth in the working age population.”
“For those who fear the impact of higher short-term interest rates on the stock market, we would remind them that history suggests that it takes several rate hikes to cause a significant correction in stock prices,” Shulman said.
The UCLA Anderson Forecast is one of the most widely watched and often-cited economic outlooks for California and the nation and predicted both the seriousness of the early-1990s downturn in California and the strength of the state’s rebound since 1993. More recently, the forecast was credited as the first major U.S. economic forecasting group to declare the recession of 2001.