Chapman forecasts continued modest growth

Chapman forecasts continued modest growth

It’s better than a recession. That’s about all one can say about the current economic “recovery,” which today’s Chapman University 37th annual economic forecast expected to continue over the next year.

The forecast was given before about 1,500 local business and community leaders at Segerstrom Center for the Arts in Costa Mesa by President Jim Doti and Esmael Adibi, director of the Anderson Center for Economic Research.

For the U.S. economy, Doti noted that the current recovery is 64 months old, longer than most recoveries since World War II. But it’s exceedingly shallow, with just 12 percent economic growth for the duration, compared to a 40 percent average for the other recoveries.

Chapman Economic Recoveries

The U.S. unemployment rate of 5.8 percent certainly is 德州扑克 better than the 10 percent at the height of the Great Recession. But it’s above the 4.6 percent at the height of the last recovery, in 2006.

Real GDP is expected to rise a bit, to 3.0 percent in 2015, from an average of just 2.2 percent the previous five years.

Chapman Real GDP

The main threat to the overall economy is a possible drop in demand for U.S. goods in 2015 because of economic problems in Europe and China. However, for now Chapman expects exports to increase slightly next year.

California

For California, Chapman forecasts similar modest growth, with employment picking up faster than the state Employment Development Department believes will happen.

Chapman Payroll Employment

Growth will be led by construction and positive consumer sentiment, Adibi said.

The fastest growing areas remain Silicon Valley (Santa Clara County) at 4.4 percent and San Francisco at 4.3 percent. The digital economy continues to pull the rest of the state.

Next is one non-coastal area, the Inland Empire, growing at 4 percent. That’s good news for an area hard hit by the recession. It’s become the location of the vast warehouses of Amazon, Walmart and other companies shipping goods to the Coastal metropolises.

Next are Oakland, 3.4 percent. Then Sacramento, snatching a vast infusion of higher taxpayer funds from the recovery, at 2.7 percent. Then Los Angeles and San Diego counties, at 2.6 percent each; and Orange County, at a disappointing 2.5 percent.

Chapman Regional growth

Chapman’s Manufacturing Purchasing Managers’ survey also is in positive territory, indicating continued growth. This is especially good news given the state’s hostile climate for manufacturing.

Chapman Manufacturing

Slow growth

A big problem with slow growth is that it doesn’t make up for the losses of the previous recession. And the last slump, the Great Recession, was the biggest since World War II.

Although Chapman and other forecasts expect growth to continue, eventually another recession will strike. When that happens, it will decline from a lower “base” than if the current recovery had been more robust.

But in life, you take what positive you can.

 

 

 

11 comments

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  1. Timberrrrrr......
    Timberrrrrr...... 3 December, 2014, 16:55

    Who still pays attention to Chapman forecasts? When’s the last time they got one right? Seriously. From where do they get their economists? UCLA? Sorry. I don’t even look at their numbers anymore. Do they tell us that the only reason there appears to be a recovery is due to perpetual zero interest rates and money printing out the wazoo? Once the braintrusts start spreading that message let me know. I’ll start paying attention again. 🙂

    Reply this comment
    • John Seiler
      John Seiler Author 3 December, 2014, 18:15

      They’re highly accurate. Doti graduated from the University of Chicago. Adibi was Doti’s student years ago at Chapman.

      Reply this comment
      • Timberrrrrr......
        Timberrrrrr...... 3 December, 2014, 18:55

        I read that Chapman doesn’t foresee another housing bubble? huh? The avg median price of a home in San Francisco is $1M for the first time. Over $400,000 in LA County. Requires an income of about $80,000 to buy-in on a crackerjacks box. In Orange County an average home would cost you about $610,000. How are those prices different from 2007? If that isn’t a bubble I’ll eat my hat. Correct me if I’m wrong, but I don’t recall Chapman calling the big meltdown in 2008. Again, the first university economist that tells me that the money printing and perpetual 0% interest rates are unsustainable – yet if the interest rates normalize to historical levels of 6% plus our goose is cooked – I will be all eyes and ears. And that’s the truth, John. Common sense. Think about it!

        Reply this comment
  2. Timberrrrrr......
    Timberrrrrr...... 3 December, 2014, 18:29

    Has Chapman does an analysis on the minimum $15/hr wage yet? But real world and college analyses are generally world’s apart. In Seattle where it’s been implemented mom & pop businesses are cutting way back on help. Can you blame them? The new wage would add about 30% to their operating costs. Their margins are so small that if they keep all their employees they’d have to go into liquidation. About 70% of the economy consists of small businesses. Alot of people will go from $10/hr. to $0/hr. Should they make more? Well, yeah. Everybody should make more. But economies don’t work like that. It’s basic math. Mr. Small Business has 2 choices to make his business worthwhile – lay off workers or lose his business. More unintended consequences of living in a liberal utopia!

    Reply this comment
  3. SkippingDog
    SkippingDog 3 December, 2014, 19:37

    How does the U.S. economic recovery compare with the rest of the world?

    Waiting….

    Reply this comment
  4. Ulysses Uhaul
    Ulysses Uhaul 3 December, 2014, 19:39

    Timmie Bob…..you have El Clipped-o tendencies…..doomed…..sour….depressed…angry….hopelessness.

    Reply this comment
  5. desmond
    desmond 3 December, 2014, 19:47

    What do I tell my friend that says his Mom woke up today and said her new girlfriend has a much bigger wanger than his Dad(her ex)?

    Reply this comment
  6. Queeg
    Queeg 3 December, 2014, 21:46

    Your gone Desi…….moderator….were are you.

    Reply this comment
  7. Timberrrrrr......
    Timberrrrrr...... 3 December, 2014, 22:09

    WHEN Japan snaps (And it must. It’s a total economic train wreck right now) we’re not far behind. They hold about $1.2 trillion of our debt. We’ll have to bail them out. No other choice. And that will result in a spiral nose dive. Oh my! What a crooked web we’ve woven.

    Reply this comment
  8. desmond
    desmond 4 December, 2014, 18:34

    My comment is true. It shows how screwed up families are today. Last but not least, do you identify with my friend’s dad. He has small feet.

    Reply this comment

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