NO RECESSION FORECAST FOR STATE HOUSING MARKET TO REMAIN A DRAG, REPORT SAYS.Byline: GREGORY J. WILCOX Staff Writer A deflating housing market will significantly slow California's economy but won't push it into a recession unless another major employment sector collapses, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. the latest UCLA UCLA University of California at Los Angeles UCLA University Center for Learning Assistance (Illinois State University) UCLA University of Carrollton, TX and Lower Addison, TX Anderson forecast released today. The forecast, similar to the university's past three, calls for job growth of 1.5 percent this year then moderating to 0.5 percent and 1 percent the next two years. ``If you look back at pretty much every recession we've had since the end of World War II End of World War II can refer to:
Noun informal a devastating setback made up of two elements double whammy n (col) → palo doble double whammy n (inf ,'' said Anderson economist Ryan Ratcliff, who authored the California report. Forecast director Edward Leamer offers a similar take on the nation's outlook, pointing out that job losses, especially in manufacturing, accompany recessions. ``This time, unlike every other time, the problems in housing will stay in housing. If you are a builder or a broker, it will feel like a deep recession. But the rest of us will hardly notice,'' Leamer wrote. Two potential areas of trouble, Ratcliff said, are the real estate sector's impact on retail trade and California's budget situation. Retail rut Since October 2005 retail trade lost 9,000 jobs, most of them from department stores This is a list of department stores. In the case of department store groups the location of the flagship store is given. This list does not include large specialist stores, which sometimes resemble department stores. . Some of this loss resulted from the housing slowdown but most of them are tied to the Federated/May Co. merger, he said. That prompted the consolidation of Macy's and Robinson's May stores during this year's second and third quarters. Wealth created in the scorching scorch v. scorched, scorch·ing, scorch·es v.tr. 1. To burn superficially so as to discolor or damage the texture of. See Synonyms at burn1. 2. appreciation of housing prices prompted many owners to pull some of that cash out for big-ticket items big-ticket item Managed care A popular term for an expensive therapeutic or diagnostic procedure such as cars and trucks. Ratcliff said that auto sales Auto Sales The major producers of domestic automobiles report sales monthly. These numbers are seasonally adjusted by the U.S. Department of Commerce and are available to the public one to five business days after the end of each month. have softened with dealership employment falling by 1,000 jobs statewide from the summer of 2005. And new-car registrations have declined 10 percent since then. This could be a housing sector fallout fallout, minute particles of radioactive material produced by nuclear explosions (see atomic bomb; hydrogen bomb; Chernobyl) or by discharge from nuclear-power or atomic installations and scattered throughout the earth's atmosphere by winds and convection currents. or simply buyers responding to aggressive pricing programs; purchases planned for this year were pushed up Fewer gains for state coffers The other issue is the housing slowdown impact on state revenues and a deficit-financing scheme passed in 2004. Revenues surged during the boom, with property tax revenues increasing 58 percent between 2001 and this year. Housing transactions also boosted capital gains tax revenue by 9.3 percent. ``Unfortunately, flat home prices and lower sales volumes suggest that these gains will disappear in coming years,'' Ratcliff said. This raises the possibility of government spending Government spending or government expenditure consists of government purchases, which can be financed by seigniorage, taxes, or government borrowing. It is considered to be one of the major components of gross domestic product. and job cuts that could be the second source of weakness. And while payments on those 2004 bonds must be paid, state officials have the ability to smooth them out while the economy is throttling back, Ratcliff said. But the weakness that may surface in these two areas could be offset by what Ratcliff calls ``savior sectors,'' professional business services and leisure and hospitality. Both were critical components of the recovery from the 2001 recession and have been the top two generators since October 2003. The business services sector is slowing from rapid to normal growth patterns and is not expected to pick up the slack from the housing market. Leisure and hospitality show no signs of slowing and the restaurant component should grow as major new developments create population centers, the report said. ``I don't think they are poised on the brink of an explosion of growth. I think they will slow down a little bit but still grow enough to keep us in the sluggish mode and out of recession,'' Ratcliff said of these two sectors. Jack Kyser, chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the at the Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. County Economic Development Corp., agrees with the Anderson economists' assessment. He notes that Los Angeles County's unemployment rate is 4.2 percent, the state's is 4.5 percent and the nation's 4.4 percent. All are considered at full employment, Kyser said. ``There are a lot of jobs out there, a lot of jobs are paying well and the stock market has done surprisingly well,'' Kyser said. ``There will be pain in the housing industry and that will continue through 2007.'' greg.wilcox(at)dailynews.com (818) 713-3743 CAPTION(S): chart Chart: Sluggish outlook SOURCE: UCLA Anderson Forecast Gregg Miller/Staff Artist |
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