Californians are in for some good news from Governor Gavin Newsom as a recent forecast says that the economy is on the road to recovery. There will be near-growth in the Golden State and it will be higher than the rest of the U.S. Widespread COVID-19 vaccinations as well huge relief for struggling businesses as well as workers are the factors that are responsible for the recovery and growth according to the UCLA forecaster’s predictions.
On Wednesday, the quarterly economic outlook was released and it stated that a waning pandemic combined with fiscal relief meant that 2021 would be a strong year of growth, one of the strongest years in the last 60 years and it would be followed by “sustained higher growth rates in 2022 and 2023.”
The forecast also reports that California will recover faster than the rest of the nation as it has been boosted by high-earning technology as well as from the fact that professional sectors shifted to at-home work as the pandemic swept across the nation. However, the leisure and hospitality businesses will fall behind as they depend on tourists.
Leo Feler, senior economist of the forecasting group called it very good news. The economist based at UCLA’s Anderson School of Management said, “We have finally turned the corner.”
The forecast also said that growth is much faster that what was seen at the 2009 recession. Some less optimistic news was that payrolls would not see a total recovery in the near future as the downturn had been severe and many workers had left the labor force.
California has a higher unemployment rate when compared with the rest of the U.S. because it put in place stricter restrictions to control the pandemic. However, the technology and logistics sectors, which are proportionately larger than other states, will accelerate recovery.
Bank of West economist Scott Andersen is less optimistic when compared with the UCLA economists. He said that the pandemic has increased the long standing inequality in California. Tech and other workers saw stability or increase in earnings while the undocumented or lower earners have borne the brunt of the sliding economy.
Feler says that accumulated savings will be spent and the hospitality and leisure industry will also see growth.
California is recovering but the extent of its recovery whether it will be as UCLA economists’ predictions or Bloomberg or Bank of West’s economists’ predictions remains to be seen.
Source LA Times