Economists with the UCLA Anderson Forecast see slower growth ahead for California because of disruptions caused by President Trump’s immigration and trade policies.
“California, having already reached near full-employment, will benefit less from further stimulus than Rust Belt states and the fact that deportations of unskilled workers will impact food harvesting and food processing,” wrote Senior Economist Jerry Nickelsburg in the latest quarterly forecast released Wednesday.
While an increase in defense spending would likely benefit the state, a trade war with Mexico would not.
“The administration’s outspoken hostility to NAFTA, especially with respect to Mexico, risks a major disruption in economic activity,” noted Senior Economist David Shulman.
The UCLA forecast calls for employment in the Golden State to grow by 2.1 percent in 2017, 1.2 percent in 2018, and 0.9 percent in 2019.
Real personal income growth is forecast to be 3.4 percent in 2017, 3.7 percent in 2018, and 3.2 percent in 2019. Home building is expected to be a steady 118,000 units a year.
At the national level, the UCLA economists are skeptical that Trump’s proposed tax cuts will have as big an impact as promised, and expressed concern about “trillion dollar annual deficits” in future years.
“Simply put, there is not enough slack in the economy to enable the 4 percent economic growth the administration is calling for and it will likely lead to more inflation,” according to Shulman.
“Because of the Trump administration’s rocky start, we have become more concerned about the risks associated with their stated trade and immigration policies,” he wrote.
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