Calif. job market slows down but recession won’t hit until 2018: forecast
California's job market is slowing down but the state is not facing a recession or economic crisis until at least 2018, according to the UCLA Anderson Forecast.
In the newly published report, economic forecasters said that California's growth is on the decline but the tech boom and the still-strong job market in Silicon Valley and the Bay Area will likely help the state ward off a recession at least the next two to three years.
They noted that a slowdown in the U.S. economy has started affecting the economy of the Golden State, causing the state's economic activity to slow down.
Jerry Nickelsburg, a senior economist for the Anderson Forecast, said, "At least through the end of 2018, we are not forecasting a recession in California or the U.S. . The expansion has been going on for a number of years, but expansions do not have calendar lives. Expansions end when you have imbalances."
Californians' personal income is expected to come down and inflation will likely worsen.
Adjusted for inflation, California residents' personal income jumped 4.5 per cent last year, and is expected to rise 3.6 per cent, 3.2 per cent and just 3 per cent in 2016, 2017 and 2018, respectively.
On the other hand, inflation is expected to worsen from 1.5 per cent in 2015 to 2.3 per cent in 2016. In 2017, California will likely see inflation rate to jump to 3.5 per cent.
Nickelsburg explained that the supply of labor, products and services has not outstripped the demand thus far. So, the kinds of severe imbalances pave way to recessions or economic slumps have yet to sprout.
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