The latest UCLA Anderson Forecast released Wednesday finds that slowing economic growth makes a national recession increasingly likely in 2020.
Senior economist David Shulman said national economic growth is expected to fall from 3.1% in the fourth quarter of 2018 to 2.1% in the fourth quarter of 2019 and 1.4% in final quarter of 2020.
“With job growth slowing to a crawl of about 40,000 a month in 2020, the risk of a recession in the latter part of that year is nontrivial,” said Shulman.
He said slowing job growth, lackluster housing construction and the trade war with China all weigh on the economy.
“Make no mistake, increasing the tariff from 10% to 25% on $200 billion worth of Chinese imports is not a policy that will enhance economic growth,” he said.
The UCLA economists forecast the rate of inflation at “somewhat above 2%” and predicted the Federal Reserve Board will make two rate cuts in the second half of 2020.
For California, real personal income growth is forecast to be 2.9% this year, 1.9% in 2020 and 2.1% in 2021, with the state’s unemployment rate rising slighty over the period.
Shulman concluded that “although growing, the economy is weaker than it looks.”
The UCLA Anderson Forecast, based at the Anderson School of Management, is credited as the first major U.S. economic forecasting group to declare the recession of 2001.
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