WHAT THE FORECAST IS FOR YOU... IF YOU LIVE AND WORK IN CALIFORNIA.

Byline: Gregory J. Wilcox Staff Writer

The Bush administration's economic expansion has reached middle age and without dramatic shifts in the nation's and state's economies, recession looms on the horizon, according to the quarterly UCLA Anderson Forecast, which will be released today.

``The Bush expansion that we are currently enjoying is reaching the probable time of death, by historical standards,'' forecast director Edward Leamer writes. ``This ... expansion is going to a nursing home.''

He notes that the economy has been growing for 13 quarters and five of the past nine spurts terminated after 14 quarters. The record is 40 quarters during the 1990s under the two previous presidents, George H.W. Bush and Bill Clinton.

Leamer reasons that the government has already burned through a tax cut so another is probably not in the offing. And the Federal Reserve Board looks to continue slowly raising interest rates.

UCLA economists first raised the possibility of recession - a significant, months-long decline in activity in industrial production, employment, real income, and wholesale-retail trade - late last year.

That won't likely be seen this year but 2006 is a possibility, Leamer said in his assessment of the national outlook.

The outlook for California mirrors the national picture. Economists see modest job growth and a slowdown in the state's hot housing market, with sales cooling and prices flattening out.

The state can expect nonfarm job growth of 1.5 percent this year and 1.2 percent in 2006. In the December forecast, the growth rates were 1.6 percent and 1.7 percent.

That's not much of a change, said Christopher Thornberg, a senior economist at the forecast who prepared the state outlook. ``It's just kind of the natural bump and grind in the model.''

The Anderson Forecast, one of the most-watched of the many economic surveys released throughout the year, is noted for its accuracy. For last year, UCLA predicted job growth of 1.6 percent for California and it came in at 1.7 percent.

For the year ahead, Thornberg says not to expect any great leaps. ``2005 will be an OK year, the same as 2004, decent growth but not amazing, (and) 2006 is a giant question mark.''

What happens with the broader economy depends on how big a turn the housing market takes. But a slowing will have a similar impact on retail sales.

Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., agrees with the UCLA assessment.

``It's not perky,'' Kyser said of the outlook.

There is some new housing construction but developers do not want to overbuild, which contributed to the most recent big sector collapse, 15 years ago.

``You have a lot of unknowns in the outlook,'' Kyser said. ``There are a lot of things going on and a lot of moving parts.''

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com

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What the forecast is for you...