Welcome!

News Feed Item

Following Harsh Winter in the East and Drought in the West, UCLA Anderson Forecast Predicts Employment Growth in U.S. and California

LOS ANGELES, April 2, 2014 /PRNewswire/ -- In its first quarterly report of 2014, the UCLA Anderson Forecast asserts that the harsh winter weather that ravaged much of the country caused slower than expected national growth in the first quarter of the year. However, the economy should rebound in the spring. Weather-impacted activities, such as factory production, automobile sales and construction, are expected to make up for time lost over the winter, leading to GDP growth in the 3 percent range. That rate is forecasted to persist through 2016, boosted by increased housing and business investments, as well as gains in consumer spending.

The first forecast report of the year for California focuses on the recent drought, analyzing the impact of the dry weather and the complex relationship between the state's economy and its water supply. While the drought may affect certain agricultural sectors, the state overall will not be greatly affected by the unseasonably dry weather conditions.

In a companion piece to the national and state forecasts, the UCLA Anderson Forecast team takes a hard look at a variety of problems plaguing the Los Angeles economy, including the high cost of housing and commuting, a poor environment for business and the relatively low education levels of the local population.

The National Forecast

In light of the nation's expected 3 percent GDP growth, UCLA Anderson Forecast Senior Economist David Shulman forecasts increases in overall job opportunities. In his report, he writes, "We can visualize the economy creating between 200,000-250,000 jobs a month with the unemployment rate dropping to 5.4 percent by late 2016 ... total payroll employment will surpass the prior 2007 peak, but the economy will remain well below its pre-Great Recession growth path."

Shulman also expects an uptick in inflation, expecting the core consumer price index to increase from 1.8 percent in 2013 to 2.5 percent in 2016. As inflation rises, Shulman anticipates that wages will rise as well. "To be sure, for most Americans, the increase in wages will be most welcome," Shulman says. "But for those wary of inflation, it will be signaling a cautionary yellow light. Specifically, we are forecasting total compensation per hour to increase by 2.4 percent, 3.5 percent and 4 percent in 2014, 2015 and 2016, respectively, compared to a very low increase of 1.6 percent in 2013." Shulman also says that the Federal Reserve's long experiments with zero interest rates and quantitative easing are slowly coming to an end. He expects that the monthly $85 billion bond buying program, now at $55 billion, will be all but wound down by September. "We forecast that the Federal Funds rate will rise, to use 'Fedspeak,' at a measured pace, reaching 3 percent by the end of 2016," says Shulman. "In essence, the 'Yellen Fed' will be very much like the Bernanke Fed."

The California Forecast

The California forecast report, authored by UCLA Anderson Forecast Senior Economist Jerry Nickelsburg, examines the impacts that the ongoing drought and dry weather are having on the California economy. Nickelsburg examines the key economic components of a drought – demand, supply and a forecast of future drought conditions – and notes that in California there are four sources of demand: agriculture, fisheries and the environment, households and industry. Agriculture, by far the largest segment of demand, consumes about 80 percent of all delivered water. On the surface, rainfall and the transpiration of ground water appear to be the major components of 'supply,' but here water authorities may choose to pump more or less reservoir water to meet specific demands. Meteorological forecasts are relevant because the expected length of a drought affects both demand and supply.

Nickelsburg notes that aridity and recurrent drought conditions are not, in and of themselves, detrimental to economic growth. Arid states have not seen their economies perform worse than states with more rainfall during the past decade. Because California and its residents have historically endured dry weather conditions, they have found ways to mitigate the impact of droughts. In fact, the amount of water used in Southern California is no higher now than it was 20 years ago, despite a much larger population today.

According to Nickelsburg, while the drought has negatively affected California's economy, particularly in some agricultural areas, "Overall the state is not likely to be greatly impacted.  But given our fragile recovery from the Great Recession, and the potential for this drought to drive industrial and agricultural structural change towards an adaptation to a more arid environment, a prudent incorporation of the drought impact would be to lower the forecast employment growth rates for the next few years by about 0.2 percent. This is more a recognition that disruptions are not without cost than a significant change in our economic forecast for the Golden State."

The latest forecast for California calls for total employment growth (payroll, farm and self-employed) of 1.8 percent in 2014, 2.2 percent in 2015 and 2.1 percent in 2016. Nonfarm payroll employment is expected to grow at 2.2 percent, 2.3 percent and 2.0 percent for the three forecast years. Real personal income growth is forecast to be 3.1 percent in 2014 followed by 3.8 percent and 3.7 percent in 2015 and 2016. The unemployment rate for the three forecast years are expected to be 7.8 percent, 6.9 percent and 6.0 percent respectively, with the rate going as low as 5.7 percent by fourth quarter 2016.

Problems and Solutions for Los Angeles' Economy: Human Capital, Public Education, and Migration

In a companion piece, UCLA Forecast Economist William Yu examines a variety of conditions plaguing the Los Angeles economy. These include the high cost of housing and commuting amid an unfriendly business environment. He continues his examination of the First 5 L.A./UCLA City Human Capital Index, which measures the education levels of various metropolitan populations.

Yu's piece notes that Los Angeles has ranked near the bottom of major U.S. metropolitan areas in terms of job growth since 1990, joining only Cleveland and Detroit as cities with negative job growth in the last 23 years. His report, titled "Problems and Solutions for Los Angeles' Economy: Human Capital, Public Education, and Migration," suggests that Los Angeles' economy is somewhat bifurcated, as better-educated West Los Angeles has had healthier job recovery compared to other parts of the city.

Yu also proposes that Los Angeles advance its human capital by improving local public schools and finding ways to attract highly educated individuals to the city. Los Angeles could also find ways to become more business friendly as a means to create jobs for the less educated.

Solutions for Our City

Yu's report will be presented (along with the U.S. and California forecasts) at the UCLA Anderson Forecast's quarterly conference today, April 2, 2014, at the J.W. Marriott L.A. Live in downtown Los Angeles. The event's keynote speaker is Los Angeles Mayor Eric Garcetti. In addition, the event features a pair of panel discussions focused on job availability and job preparedness. Additional event details can be found here.

About UCLA Anderson Forecast

UCLA Anderson Forecast is one of the most widely watched and often-cited economic outlooks for California and the nation and was unique in predicting both the seriousness of the early-1990s downturn in California and the strength of the state's rebound since 1993. More recently, the Forecast was credited as the first major U.S. economic forecasting group to declare the recession of 2001. Visit UCLA Anderson Forecast at http://uclaforecast.com. For a historical timeline of the Forecast, click here.

About UCLA Anderson School of Management

UCLA Anderson School of Management is among the leading business schools in the world, with faculty members globally renowned for their teaching excellence and research in advancing management thinking. Located in Los Angeles, gateway to the growing economies of Latin America and Asia and a city that personifies innovation in a diverse range of endeavors, UCLA Anderson's MBA, Fully-Employed MBA, Executive MBA, Global Executive MBA for Asia Pacific, Global Executive MBA for the Americas, Master of Financial Engineering, doctoral and executive education programs embody the school's Think In The Next ethos. Annually, some 1,800 students are trained to be global leaders seeking the business models and community solutions of tomorrow. Follow UCLA Anderson on Twitter at http://twitter.com/UCLAAnderson or on Facebook at http://www.facebook.com/uclaanderson.

 

Infographic: Health of Job Market in 32 Major U.S. Cities

 

UCLA Anderson Forecast - www.uclaforecast.com

 

UCLA Anderson School of Management

 

Video - http://origin-qps.onstreammedia.com/origin/multivu_archive/PRNA/ENR/FX-LA95903-20140402-1.mp4 
Photo - http://photos.prnewswire.com/prnh/20140402/LA95903-INFO 
Logo - http://photos.prnewswire.com/prnh/20130605/LA26150LOGO 
Logo - http://photos.prnewswire.com/prnh/20140225/LA71820LOGO

SOURCE UCLA Anderson School of Management

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
"We are a monitoring company. We work with Salesforce, BBC, and quite a few other big logos. We basically provide monitoring for them, structure for their cloud services and we fit into the DevOps world" explained David Gildeh, Co-founder and CEO of Outlyer, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
The Internet giants are fully embracing AI. All the services they offer to their customers are aimed at drawing a map of the world with the data they get. The AIs from these companies are used to build disruptive approaches that cannot be used by established enterprises, which are threatened by these disruptions. However, most leaders underestimate the effect this will have on their businesses. In his session at 21st Cloud Expo, Rene Buest, Director Market Research & Technology Evangelism at Ara...
SYS-CON Events announced today that Silicon India has been named “Media Sponsor” of SYS-CON's 21st International Cloud Expo, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Published in Silicon Valley, Silicon India magazine is the premiere platform for CIOs to discuss their innovative enterprise solutions and allows IT vendors to learn about new solutions that can help grow their business.
Join us at Cloud Expo June 6-8 to find out how to securely connect your cloud app to any cloud or on-premises data source – without complex firewall changes. More users are demanding access to on-premises data from their cloud applications. It’s no longer a “nice-to-have” but an important differentiator that drives competitive advantages. It’s the new “must have” in the hybrid era. Users want capabilities that give them a unified view of the data to get closer to customers and grow business. The...
Amazon started as an online bookseller 20 years ago. Since then, it has evolved into a technology juggernaut that has disrupted multiple markets and industries and touches many aspects of our lives. It is a relentless technology and business model innovator driving disruption throughout numerous ecosystems. Amazon’s AWS revenues alone are approaching $16B a year making it one of the largest IT companies in the world. With dominant offerings in Cloud, IoT, eCommerce, Big Data, AI, Digital Assista...
The current age of digital transformation means that IT organizations must adapt their toolset to cover all digital experiences, beyond just the end users’. Today’s businesses can no longer focus solely on the digital interactions they manage with employees or customers; they must now contend with non-traditional factors. Whether it's the power of brand to make or break a company, the need to monitor across all locations 24/7, or the ability to proactively resolve issues, companies must adapt to...
"Loom is applying artificial intelligence and machine learning into the entire log analysis process, from start to finish and at the end you will get a human touch,” explained Sabo Taylor Diab, Vice President, Marketing at Loom Systems, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
@DevOpsSummit at Cloud Expo taking place Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center, Santa Clara, CA, is co-located with the 21st International Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is ...
After more than five years of DevOps, definitions are evolving, boundaries are expanding, ‘unicorns’ are no longer rare, enterprises are on board, and pundits are moving on. Can we now look at an evolution of DevOps? Should we? Is the foundation of DevOps ‘done’, or is there still too much left to do? What is mature, and what is still missing? What does the next 5 years of DevOps look like? In this Power Panel at DevOps Summit, moderated by DevOps Summit Conference Chair Andi Mann, panelists loo...
Cloud applications are seeing a deluge of requests to support the exploding advanced analytics market. “Open analytics” is the emerging strategy to deliver that data through an open data access layer, in the cloud, to be directly consumed by external analytics tools and popular programming languages. An increasing number of data engineers and data scientists use a variety of platforms and advanced analytics languages such as SAS, R, Python and Java, as well as frameworks such as Hadoop and Spark...
"MobiDev is a Ukraine-based software development company. We do mobile development, and we're specialists in that. But we do full stack software development for entrepreneurs, for emerging companies, and for enterprise ventures," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
A look across the tech landscape at the disruptive technologies that are increasing in prominence and speculate as to which will be most impactful for communications – namely, AI and Cloud Computing. In his session at 20th Cloud Expo, Curtis Peterson, VP of Operations at RingCentral, highlighted the current challenges of these transformative technologies and shared strategies for preparing your organization for these changes. This “view from the top” outlined the latest trends and developments i...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
For organizations that have amassed large sums of software complexity, taking a microservices approach is the first step toward DevOps and continuous improvement / development. Integrating system-level analysis with microservices makes it easier to change and add functionality to applications at any time without the increase of risk. Before you start big transformation projects or a cloud migration, make sure these changes won’t take down your entire organization.
Automation is enabling enterprises to design, deploy, and manage more complex, hybrid cloud environments. Yet the people who manage these environments must be trained in and understanding these environments better than ever before. A new era of analytics and cognitive computing is adding intelligence, but also more complexity, to these cloud environments. How smart is your cloud? How smart should it be? In this power panel at 20th Cloud Expo, moderated by Conference Chair Roger Strukhoff, paneli...