Hard Winter - Then Moving Back to Trend by 2023: UCLA Anderson Forecast

From the Forecast news release:

The California Forecast

The COVID-19 pandemic’s outsized and unpredictable impact on California is expected to continue, at the very least, for the immediate future.

As Forecast director Jerry Nickelsburg and economist Leila Bengali write, “California has responded, as before, with more restrictive non-pharmaceutical interventions (NPI) via mask mandates, closures and gathering restrictions. We expect that to continue, particularly through the holiday season, as significant traveling by Americans has thus far presaged further increases in COVID cases. We also know that at least three vaccines are in the latter stages of testing and approval. Does this mean that we are out of the woods soon? The answer is maybe.”

The economists assume that an elevated number of virus cases will persist and that caution will prevail regarding many traditional holiday activities, including in-store shopping, throughout the winter. “This will mean a weak growth rate through the balance of the year and into early 2021,” they write. “For the purposes of our forecast we also assume that a large number of people will have received one of the vaccines by summer, ushering in the beginning of a return to normalcy.”

The report notes that 1.37 million non-farm payroll jobs in California have been lost since October 2019. Although there has been a recovery of some of those jobs since April 2020, a handful of sectors will remain the state’s weakest economic sectors, bearing the brunt of the state’s employment losses: leisure and hospitality, retail and education.

The forecast for the state is that the technology sectors, residential construction and logistics will lead the recovery, and that post-pandemic California will grow faster than the U.S. as a whole, although the state’s recovery is expected to begin later.

The economists expect the state’s unemployment rate in fourth-quarter 2020 to be 8.9%, and the average unemployment rate to be 6.9% in 2021, followed by 5.2% in 2022 and 4.4% in 2023. They project total employment growth rates of 6.1% in 2021, followed by 3.4% in 2022 and 2.2% in 2023, and non-farm payroll job growth of 3.6%, 3.8% and 2.5% for the same three years...

Full release at https://www.anderson.ucla.edu/news-and-events/press-releases/anticipating-vaccine-ucla-anderson-forecast-expects-recovery-to-begin-in-spring-21

Apart from the short- to intermediate-term California forecast, the Zoom conference today discussed the national economy and the impact of climate change on the long-term economy.