No Recession in Sight as CA Economy Continues Cooling Off

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California’s economic growth should continue in 2020 and well into 2021, as there is no foreseeable reason for it to stop. However, the economic expansion will continue slowing down due to an ever-tightening labor market, fading government fiscal stimulus, geo-political trade tension, and other drivers.

That’s according to the most recent forecasts published by Chapman University, the UCLA Anderson Forecast, Beacon Economics, the California and Nevada Credit Union Leagues, Filene Research Institute, and Moody’s Analytics in November and December.

The keynote speakers’ opinions spotlight intriguing viewpoints, trends and projections so your credit union can plan appropriately (click here to view the entire forecast report/news coverage):

  • As the economy continues slowing, California’s payroll employment growth rate (companies and organizations) will continue to decrease and stoop to an annual 1.5 percent in 2020. On one hand, economic growth in California is slowing. On the other hand, this is — in part — because unemployment rates are very low.

  • U.S. Gross Domestic Product (GDP) — the traditional measurement of economic growth — will register 1.7 percent in 2020 and 1.9 percent in 2021. Currently, there is little sign of the kind of collapsing imbalances or rapid shifts in aggregate demand that would be capable of pushing the economy into a downturn or even a protracted slow-growth slump.

  • A “mild” recession may hit the economy sometime in 2021 or 2022. At the very least, uncertainty will rise going into the summer of 2020.

  • What credit union members may perceive is happening in the economy, geo-politics and the financial markets as it’s reported in the news media versus what’s realistically happening doesn’t always align. Credit unions can immediately prepare for the next economic recession whether it happens in two months or two years. Those working in financial services should focus on the severity of the next recession.

  • The economy is in fairly good shape to deal with a recession when it comes. The wildcard is whether both monetary policymakers and fiscal policymakers are ready to act.

  • Just released (or will be soon): local county-level perspectives, occupational and industry trends, local and regional GDP, income and poverty estimates, and demographic profile and projections.

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