California Economic Forecast

Name: California Economic Forecast
Address: 5385 Hollister Avenue Ste 207, Santa Barbara, CA, 93111, US
Telephone: +18056922498

Home
United States
Santa Barbara, CA
California Economic Forecast

Economic Consulting and Forecasting We can provide you with updated forecasts of economic activity for any county in California.

The California Economic Forecast presents regional economic information and produces forecasts of the California economy and it's regions. We make frequent presentations on the economy of the nation and California throughout the year. During 2013, we have presented our economic forecasts in Ventura, Westlake Village, Santa Clarita, Huntington Beach, Irvine, Santa Barbara, Santa Maria, Sacramento, San Diego, Concord, Buellton, Carpinteria, and Los Angeles

08/05/2025

A Better 2025 Economy to Date Than Predicted

Seven months into the 2025 economy and we have survived tariff uncertainty and fear to date. In fact, GDP growth was higher than usual in Q2.

Most economic indicators are better today than economists predicted back in March. The tariff mania did not produce chaos and carnage as predicted.

Though we are not out of the woods yet, it is unlikely that economic conditions will meaningfully change much over the rest of 2025.

Read about it in the August newsletter:

We were told by a flurry of the analytical pundits observing the Trump administrations new polices that the proposed tariff regimen (combined with the downsizing of federal government) would crash the equities market, spike inflation, lower GDP and employment growth, resulting in recession, chaos an...

07/05/2025

During the first 6 months of 2025, job creation in California has been minimal, yet the unemployment rate is in decline. Displacement of jobs by Artificial Intelligence has long been predicted, and now it is reality.

Employment in many of the higher paying sectors of the California labor market is shrinking, and much if not all of this shrinkage is due to the rapid and widespread adoption of AI in the workplace. This poses a threat to the labor force going forward. Read about it in the July newsletter.

The key issue emerging for the California economy in 2025 is the broad based weakness of the labor market. Only 3 sectors are responsible for all of the job creation this year, and two of the three are either entirely or largely financed by public sector funding—healthcare and local government. Up...

06/16/2025

Economic activity in California this year has weakened. The aggregate labor market has demonstrated no net growth this year. Residential construction has weakened, in tandem with builder sentiment. And tough tariff talk has also weighed down container traffic at the west coast ports. Though international tourism appears to be off modestly, the visitor industry is still busy this year.

The outlook for California strong predicts slower growth for the remainder of 2025 but picking up next year when foreign trade policy has been settled and interest rates move lower. Read about it in the June newsletter.

The key issues for the California economy in 2025 include the effect of new foreign trade policy, attempts to reduce federal government spending, and the onset of AI in most industries, especially technology and advanced manufacturing.

05/06/2025

There is a chorus of new calls for an economic recession in 2025 now that Q1 GDP growth was reported at negative 0.3 percent. The general perception is that two consecutive negative quarters of growth defines an economic recession. That is not the case however. Two negative quarters are symptomatic of a recession but would not necessarily lead to one.

We explore the possibility that recession will occur this year in view of the most recent evidence, and explain why GDP went negative last quarter.

A host of important economic statistics became available last week to give us insights into the current state of the U.S. economy. There was negative quarterly growth of real GDP, with output shrinking by 0.3 percent; the unemployment rate remained unchanged at 4.2 percent but job numbers showing a....

04/08/2025

Economic conditions are not necessarily changing. However, uncertainty and fear that the recently imposed tariff regimen will slow growth and possibly elevate inflation has led to a steep selloff in the stock market. Is recession on the horizon or are investors overreacting?

Interest rates have been benefitting from the market chaos that’s been hurting stock prices, especially the freefall declines in value on April 3, 4, and 7 which represented a 15 percent decline. In tandem with stock prices, yields on the 10-year Treasury bond have also been in a freefall during t...

03/07/2025

Uncertainty in markets, characterized by difficulty in predicting future outcomes, can lead to reduced investment, increased volatility, and potentially slower economic growth. Uncertainty can erode consumer confidence, leading to reduced spending and further economic slowdown. Uncertainty makes businesses hesitant to invest in new projects or expand, as they fear potential losses or missed opportunities.

Read about how uncertainty is impacting the economy today.

With the nation now amid an age of uncertainty, I hope the “age” lasts just a month or two. Markets loathe uncertainty, especially the capital markets.

02/10/2025

The U.S. economy has started out the year with above average growth amid mixed fundamentals that include rising gasoline prices, high food prices and interest rates, tariff fears, changing developments overseas, and a labor market this is moderating. Despite the current environment of unknowns regarding the policies of the new administration, many of the principal economic indicators are positive, with the potential for 2025 growth to exceed expectations.

GDP rose 2.3 percent in the fourth quarter of 2024, and 2.5 percent for the calendar year. GDP growth in the first quarter to date is estimated at 2.9 percent (February 7) by the Atlanta Federal Reserve’s GDPNOW model.

01/06/2025

The policy issues promised by the incoming Trump administration include improving the economy, defeating inflation, restoring peace in the world, and securing the southern and northern borders of the United States. Getting control of the federal debt by reducing government spending will also help to control inflation and lower interest rates.

Read about the new administration’s principal goals and how they impact the economy in the January newsletter.

A meaningful reduction in government spending recommended by DOGE and sanctioned by Congress could actually balance the annual federal budget and make inroads on debt reduction. This would be the first time since the 1990s. However, we all know there are inefficiencies in government program spending...

12/03/2024

With only a few days remaining in 2024, we can summarize the year’s economic conditions as a precursor to how 2025 might unfold.

The year was better than economists originally expected. Job creation remained positive, unemployment did not rise much, consumers kept spending and businesses kept investing.
Capital markets rallied for most of the year, and although there was global instability, it did not manifest in trauma to the U.S. economy.

The momentum that characterized 2024 will carry into 2025. Read more about the epilogue to 2024 in this month’s newsletter.

This year—2024—was a much better year than economists predicted. A year ago, there was more talk of a looming recession, or very slow growth predicted for 2024. The labor markets however, remained strong, consumers continued to spend, investor buying extended the bull market into its third year,...

11/08/2024

Why are longer term rates moving higher after rate cuts by the Fed ?

The Federal Reserve has cut interest rates by 75 basis points since mid-September. However, longer term rates have moved higher since, driving up mortgage rates and other consumer borrowing costs. The principal issues for the apparent paradox include the optimistic growth prospects for the U.S. economy going forward, and the rapid and rising trajectory of federal debt.

Read all about this in the November newsletter.

The 30 year fixed rate mortgage yield plunged 100 basis point between May and September 2024. The Fed cut short term rates in September, and again on Thursday November 6.

09/02/2024

Unresolved and New Issues Impacting U.S. Economic Growth

The economy remains in an expansion, now 52 months old, but growth in 2023 and 2024 has been below trend.
A number of pandemic related issues still linger, producing headwinds, including inflation, slow labor force growth, and vacant office buildings.
Newer issues like massive immigration, housing unaffordability, and global instability are rattling consumers.
And though it is still low, the rate of unemployment is rising. When this occurs, it tends to continue its upward path.
Rate cuts expected this month and in November by the Fed will likely provide some new energy to the economy.
But will this occur at the expense of continued progress extinguishing inflation?

Read more about it in this months newsletter!

The economy remains in an expansion through growth has moderated this year. It has been 52 months since the last recession and there is low probability that another one is in the forecast anytime soon. Some lingering issues still remain from the last recession amidst new issues that have emerged.

08/12/2024

A Softening Labor Market?

Recent data would suggest that the labor market is softening. Unemployment is higher and job openings are in steady decline. However, at the same time, foreign born workers are now dominating the growth of the workforce, which is still positive. The surge in potential workers from immigration has pushed unemployment higher, rather than a decline in job creation. The labor market may simply not be as weak as recent data might imply.

Read more about it in the August Newsletter!

In the August 2023 newsletter, I wrote about the tight labor market. Unemployment at that time was below 4 percent, Unfilled job openings exceeded ten million and workers quitting their jobs (for a better job elsewhere) was still quite high.

Address

5385 Hollister Avenue Ste 207
Santa Barbara, CA
93111

Telephone

+18056922498

Website

http://www.californiaforecast.com/

Alerts

Be the first to know and let us send you an email when California Economic Forecast posts news and promotions. Your email address will not be used for any other purpose, and you can unsubscribe at any time.

Contact The Business

Send a message to California Economic Forecast:

Shortcuts

Want your business to be the top-listed Advertising & Marketing Company in Santa Barbara?