A forecast for the United States and California economies
Welcome to Beaconomics, a forecast for the United States and California economies.
This succinct, quarterly outlook delivers up-to-date analysis of leading indicators driving the state and national economies, including GDP growth, employment, housing and commercial real estate markets, taxable sales, international trade, and more.
Trade Disputes, Slowing Housing Markets, Wall Street Turbulence, Political Uncertainty… Despite It All, Economic Outlook Remains Steady | Winter | 2019
The fact that the U.S. is on the edge of the longest economic expansion in the nation’s history hasn’t dampened Beacon Economics’ latest forecast. Despite handwringing over everything ranging from battles with major U.S. trading partners to a feared onset of inflation, Beacon’s new outlook has the U.S. and California economies continuing to expand through 2020.
“This isn’t optimism,” said Christopher Thornberg, Founding Partner of Beacon Economics and one of Beaconomics‘ authors. “There is simply nothing out there at the moment, whether it’s the sell off in the stock market or rising interest rates, that has the power or speed to knock the expansion off its track; and apart from a rapidly growing Federal budget deficit, the U.S. economy looks fairly well-balanced in terms of the fundamentals.”
Thornberg notes that there continues to be uncertainty about trade with China but even a major trade war wouldn’t be sufficient to end the national expansion. All the recent pessimism may be just that: Although the economy and outlook have not changed much since Beacon’s last forecast, public discourse surrounding the economy has taken a sharp turn for the worse, says Thornberg.
At the state level, California’s economy is also forecast to continue growing, having experienced an expansion in its industries in 2018 and wage and income increases that are outpacing inflation. The current outlook for the state also finds that while job growth is occurring largely in ‘population serving’ industries such as health care and hospitality, California’s economic output is coming primarily from its ‘external’ industries – especially those related to technology.
“The newly elected governor will inherit a state economy that is in good shape right now, but economic growth is constrained by an extremely tight labor market,” said Beacon Economics’ Executive Director of Research Robert Kleinhenz, one of Beaconomics‘ authors. “To ensure its future economic vitality, California will need sustained labor force growth, which means providing the education and training residents need for the 21st Century economy, and ensuring workers can afford to live here by addressing the state’s housing problems.”
See our complete analysis for additional commentary on key economic indicators.
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