SLOWER ECONOMY AHEAD UCLA FORECAST PREDICTS TEPID 2006, 2007.Byline: Gregory J. Wilcox Staff Writer A leaking housing price bubble will slow the state and local economy next year but it should not sink into a recession in that time, 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 widely watched 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. Economists call for less robust job growth that in the last forecast and the one a year ago. And they also say a recession is possible, but not likely in the next several years, a point made in several previous outlooks. ``The California Economy, like the U.S.'s, seems healthy on the surface, but scratch away and what you see is not encouraging news,'' Christopher Thornberg, a forecast senior economist, wrote in his assessment. The forecast calls for the state's economy, as measured by jobs, to grow by 1.6 percent this year then slip to 1.2 percent in 2006 and 0.8 percent in 2007. 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's outlook is more tepid tep·id adj. 1. Moderately warm; lukewarm. 2. Lacking in emotional warmth or enthusiasm; halfhearted: "the tepid conservatism of the fifties" Irving Howe. with job growth of 0.8 percent this year, 0.9 percent next year and 0.7 percent in 2007. Thornberg said that recent growth has been driven by consumer spending Consumer demand or consumption is also known as personal consumption expenditure. It is the largest part of aggregate demand or effective demand at the macroeconomic level. that resulted from appreciation rates of historic proportions." ``To me the biggest risk of all is the one we have probably the least direct grasp on, and that's the relationship between real wealth and the massive amount of consumer spending,'' he said. This Anderson Forecast is similar to the one issued in the second quarter. The only difference is the timing of the arrival of the bad news from a cooling residential real estate market. In their July outlook, UCLA's economists expected it to arrive in the latter half of this year. But the real estate market has exhibited remarkable staying power so the turn is likely six months away. ``In some sense none of the fundamentals have changed. It just didn't materialize as quickly as expected,'' said senior economist Ryan Ratcliff, who wrote the county report. He maintains that trouble in the real estate sector will lead to wider economic malaise malaise /mal·aise/ (mal-az´) a vague feeling of discomfort. mal·aise n. A vague feeling of bodily discomfort, as at the beginning of an illness. in the latter half of next year and 2007. ``At this time there is not enough evidence ... to suggest that this slowdown will become a full-blown recession,'' he said. The economists say that the real estate bubble This article is about the general phenomenon of housing bubbles. For housing bubbles in various countries, see below. A real estate bubble or property bubble (or housing bubble won't deflate (file format, compression) deflate - A compression standard derived from LZ77; it is reportedly used in zip, gzip, PKZIP, and png, among others. Unlike LZW, deflate compression does not use patented compression algorithms. with the kind of whoosh whoosh also woosh n. 1. A sibilant sound: the whoosh of the high-speed elevator. 2. A swift movement or flow; a rush or spurt. intr.v. that that comes with a popping stock market bubble A stock market bubble is a type of economic bubble taking place in stock markets when price of stocks rise and become overvalued by any measure of stock valuation. The existence of stock market bubbles is at odds with the assumptions of efficient market theory which assumes in which equity values suddenly plunge. It will happen over time and result in smaller smaller rates of appreciation. But it probably won't be a repeat of the early 1990s, when the local economy took a blow from falling real estate prices and widespread job losses, Ratcliff said. Nevertheless, he does view the future out past six months with caution. ``We haven't seen and (indicators) go in the direction that screams there is a recession on the horizon but you can almost smell it on the wind that it's coming,'' he said. Locally the information sector, which includes the entertainment industry, has been driving the economy. It's added 15,7000 jobs in the last year and 85 percent of them were in motion picture and sound recording. And most of these were due to a surge in television production. Ratcliff notes that the Entertainment Industry Development Corp. said that at least 96 of the 130 primetime television programs are produced in the county. And television employees twice as many workers as movie production locally. The next biggest sector growth came in construction, which will take a hit from any real estate retreat. 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 nonprofit A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive. Nonprofits are also called not-for-profit corporations. Nonprofit corporations are created according to state law. Los Angeles County Economic Development Corp., thinks that UCLA is taking a conservative approach in its outlook. ``If you go around and talk to businesses they are pretty positive. I had one business say it's the best it's been in years,'' he said. Gregory J. Wilcox, (818) 713-3743 greg.wilcox(at)dailynews.com THE FORECAST This time: Real estate market to soften next year Job growth 0.8 percent this year Last quarter: Real estate bubble to grow Job growth 1.6 percent this year Last year: State's budget crisis a problem Job growth of 2 percent this year Source: UCLA Anderson Forecast CAPTION(S): box Box: THE FORECAST (see text) |
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