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Thursday, Feb 22, 2024

Economists at VICA Event Forecast Slow Recovery

Economists saw slow but stable economic recovery for the region, state and nation as they gave their forecasts at the Valley Industry & Commerce Association’s 22nd Business Forecast breakfast on Oct. 28. James Paulsen, chief investment strategist for Wells Capital Management, began the forecast with optimism, saying the current recovery period is faring better than those of the past. “This is the best recovery we’ve had in 25 years,” Paulsen said, adding that the real growth domestic product rates grew by 3 percent in the first year of recovery. That is far better than growth during the recession recoveries of the early 1990s and 2000s, he added. He also said it took a year to see positive payroll gains in the early 1990s and a year and nine months for the gains in the early 2000s. Meanwhile, it only took six months to see payroll gains in the current recovery period. Paulsen said he believes the effects of federal stimulus spending still have yet to fully kick in, which should help improve the economy. William Roberts, director of the San Fernando Valley Economic Research Center at California State University Northridge, said that while the economy is in recovery mode, overall improvement is expected to move at a very slow pace. “I see the economy is recovering, but we’re going to get modest GDP growth for at least the next nine months,” said Roberts, adding that he estimates growth of about 2 percent. The private business sector is seeing improvement, with employment rates in the greater Los Angeles area having increased by 1.1 percent over the last 10 months and average weekly wages having increased over the same period by 3.2 percent, he added. “The private business sector is doing a really good job,” he said, addressing an audience of business executives and leaders. “You’ve been hit, slammed, regulated, taxed, they’re changing the rules of the game on you all the time, but you pop back and you chug us forward.” However, he added that overall unemployment rates will not likely decrease more significantly until the middle of next year. Meanwhile, housing prices and sales in the San Fernando Valley have stabilized. Roberts said the San Fernando Valley region will be able to use its diversity to its advantage in its recovery process. “The Valley is diverse in employment (and) diverse in its population,” he said. “So, we’re going to kind of take advantage of that diversity, and slowly and gradually in different areas we’ll expand.” Bill Watkins, executive director of the Center for Economic Research & Forecasting at California Lutheran University, agreed with Roberts that recovery is going to occur slowly. His center is forecasting no economic growth for the state the rest of the year, more job losses over the next four quarters and unemployment rates in the double digits for the next two years. However, he added that the San Fernando Valley region is likely to recover faster than most of the state.

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