(1888PressRelease)
February 19, 2009 - Los Angeles—The 2009-2010 “Economic Forecast & Industry Outlook” from the Kyser Center for Economic Research at the Los Angeles County Economic Development Corporation (LAEDC) sees difficult times ahead for the nation, the state and Southern California through most of 2009. “For now, we think the economy might reach bottom by this summer,” said Nancy D. Sidhu, Ph.D., the LAEDC’s Chief Economist. “This recession officially began in December 2007, so this would make it some 19-21 months long – the longest downturn since World War II.”
Overall, the LAEDC Forecast projects the U.S. economy will shrink by 2.9 percent during 2009 and grow modestly—by 1.5 percent—in 2010. Inflation is unlikely to be a problem in the near term, declining by
1.8 percent in 2009. “Bad news will continue in 2009 for the auto and housing industries,” observed Sidhu. About 10.4 million light vehicles are expected to be sold in 2009, compared with 16.1 million sold during 2007. The nation’s housing sector has been on a steep downtrend for three years, and the crash still has some more to go. About 525,000 housing starts are projected for 2009, compared with the recent high of 2,077,000 starts in 2005.
“The news on the employment front will reflect this, with U.S. annual nonfarm employment dropping by 4.4 million jobs during 2009,” added Sidhu. The unemployment rate will average 8.7 percent during the year, and will run up to 9.5 percent in 2010. The federal government’s stimulus plan will start to have a positive impact by year-end 2009.
“As 2009 began, California was in the throes of a serious recession, and the economic news during 2009 will be mostly bad,” continued Sidhu. The state’s economic downturn should hit bottom before the end of 2009, but when growth resumes it will be moderate at best. The state’s non-farm employment will fall by 3.0 percent or by 447,500 jobs, while the unemployment rate will average a painful 10.5 percent in 2009.
California’s housing industry will continue to be depressed, especially in the inland areas of the state. For more on the Story and the forecast visit: http://tinyurl.com/dbmj29.
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