UCLA Forecast says National Recovery depends on World Trade

The UCLA Anderson Forecast, an economic think tank, has linked the current national recession to slumping international economic conditions that will impact the timing and pace of any national recovery. The Forecast asserts that a turnaround in the U.S. economy depends upon a recovery in world trade. The report also states that regardless of the steps taken by the U.S. government, national solutions will not be enough to restore growth and therefore global solutions are essential. In California, it’s forecasted that the economy will remain in turmoil for the foreseeable future as the twin sector engines of consumers and construction continue to drag, according to a press release that summarized the report.

According to UCLA Anderson Forecast Senior Economist Jerry Nickelsburg, the current forecast (for California) “reflects a deeper and longer recession than we previously thought.” The UCLA Anderson Forecast for California is for a very weak first three quarters of 2009 and virtually no growth in the fourth quarter of this year. The economy will begin to pick up by 2010 and by the end of next year the state’s economy will begin to grow at something resembling normal levels. Nickelsburg writes, “The keys to California’s recovery are (a) recovery in U.S. consumption improving the demands for imports from Asia and the demand from California’s factories, the resumption of non-residential public works and multi-family residential construction growth and the return of growth to the retail sector.” As for the State’s unemployment situation, it is expected to only get worse. UCLA Anderson Forecast expects the unemployment rate for California to rise to 11.9% in the second quarter of 2010 and average 11.7% for the year. “Though the California economy will be growing in 2011, it will not be generating enough jobs to drive the unemployment rate below double digits until the following year.”