The latest UCLA Anderson Forecast quarterly report states that the U.S. will not hit a recession - but we will find it could be perceived to be close because of decline in some jobs and the national badgering daily talking about the subprime mortgage crisis.
Yes, I agree that some lenders should not have given loans to some of the borrowers, but the news media continually sensationalizes certain subjects - and they seem to be continuing to attack the housing and lending industry. Do they not know the housing industry drives the entire economy? I recently spoke with a national news media person and they tell me that their advertising revenues are down - and they've done it to themselves. I have to say "Duh" to that.
The predictions from the UCLA Anderson Forecast are that we will continue to see some subprime fallout and some decline in jobs. They stated that the housing market will continue to drag on the state's economy until early 2009, with expected job growth of less than 1 percent through Sept. 2008 and unemployment should top-out at approximately 5.9% at the end of next year.
"California is in for at least another year of economic doldrums, with rising unemployment, weak job growth, and a slowdown in all broad indicators," said UCLA economist Ryan Ratcliff.
The prediction also states a slow move toward economic recovery in 2008. UCLA's forecast calls for growth in the gross domestic product (GDP) of more than 1 percent for the fourth quarter of 2007 and first quarter of 2008, and returning to 3% in 2009, avoiding the traditional definition of a recession, which is two consecutive quarters of a GDP decline.
UCLA's forecast also stated lowered predictions for U.S. housing starts total for this year, 2007, to more than 1.1 million units, but predicts a climb to 1.4 million homes by the end of 2009.