California’ rebound forecast to lag behind nation’s
California’s economic recovery will lag behind the nation’s in 2010, but then overtake it as U.S. consumers start buying again and goods come through the region’s ports and transportation hubs, according to a forecast released Wednesday by economists at the UCLA Anderson School of Business.
The state’s unemployment rate won’t fall below double digits until 2012, economists predicted.
“It’s going to take a while,” said Jerry Nickelsburg, a senior economist with the forecast. “We dug a pretty big hole.”
The state will benefit from U.S. consumer spending as imports come through the ports and generate jobs in logistics and transportation. But consumers aren’t yet spending very much, indicating this year will be a slow one for the state.
The economy will start to pick up in 2011 as California ships its manufactured goods and agricultural products to Asia and U.S. consumers start to spend again, economists said. The unemployment rate will average 11.8% in 2010, economists said. The rate was 12.5% in January, the highest since World War II.
In both California and the nation, the economy seems to be growing, but job growth hasn’t yet appeared.
“We’ve had the economy growing for the past three quarters while employment has been contracting,” said David Shulman, senior economist with the forecast. “That’s what we call the bipolar disorder.”
When the country’s gross domestic product increases by more than 5%, payroll growth typically expands at a rate of 2% or 3%. But in the fourth quarter of 2009, GDP rose 5.9% and employment shrunk 1.3%.
Federal tax cuts and stimulus spending might be leading to this confusion, Shulman said. Companies were wary to make long-term hiring decisions amid growth that might not last, he said.
Although job numbers will probably increase this month, Shulman said, the country will still end 2012 with 2 million fewer jobs than it had in 2007. He predicts the national unemployment rate will remain high, at 9.5%, at the end of the year. It was 9.7% in February.
The U.S. recovery will be led by exports and a revival in the national residential construction market. The forecast also includes a new feature that tracks truck drivers’ purchases at rest stops to look at the volume of products being moved across the country.
This feature, called the Ceridian-UCLA pulse of commerce index, shows a different perspective on the “bipolar” economy. The index jumped 2.8% in December and has remained essentially flat since then. That means the country has held on to the gains from the rise in GDP, said Ed Leamer, director of the forecast.
Still, local truck traffic is nowhere near its pre-recession peak. Truck traffic on Interstate 5 fell 20% in 2008 and gained in 2009 only to fall again recently.
Truck traffic from Flagstaff, Ariz., to Barstow dropped dramatically in mid-2007 and has stayed low since then. Routes such as Interstate 15 through Nevada and California, Highway 99 from Modesto to Bakersfield and Interstate 80 from Utah to Sacramento have started climbing back to pre-recession levels but are below their 2007-08 peaks.
Breaking this traffic down by state, however, Leamer said that California trucking has almost fully recovered in relation to its peaks, while Utah, Arizona and Nevada are still suffering declines.
alana.semuels@
latimes.com
