Economists forecast possible 2020 recession

After days of turbulence, Wall Street has settled down
Posted at 1:17 PM, Jul 31, 2019
and last updated 2019-07-31 16:17:03-04

SAN DIEGO (KGTV) -- Economic forecasters are beginning to warn of a possible 2020 recession, and the impact they say will be felt in the Golden State, according to a new report by UCLA.

“Don’t celebrate the 3.1% GDP growth estimate for the first quarter of 2019,” writes UCLA Anderson Professor Emeritus Edward Leamer.

Leamer is quoted in a recent report produced by the UCLA Anderson School of Management.

According to Leamer, the data actually increases the risk of a recession at some point in the next couple of years.

Nationally, economic growth is expected to slow marginally to 2.1 percent in the fourth quarter of 2019 and 1.4 percent in the fourth quarter of 2020.

RELATED: Fed cuts interest rates for the first time since recession

The good news is that the report predicts an economic rebound, growing again to 2.1 percent in the fourth quarter of 2021.

So what picture does the report paint for California? One forecaster says you can expect California unemployment to rise modestly.

“Weakness in housing as well as the slowing U.S. economy is reflected in a very modest growth rate in the U.S. in late 2020,” UCLA Anderson Forecast director Jerry Nickelsburg writes.

“As a consequence, we expect California’s average unemployment rate to rise slightly to an average of 4.6% in the first quarter of 2021. For the entire year for 2020 and 2021, we expect average unemployment rates of 4.3% and 4.4%, respectively.”

Meanwhile, personal income growth in the state of California is forecast at 2.9 percent in 2019.

But the report warns that income growth is expected to slow to 1.9 percent by 2020.

It’s not all bad news, however, income growth is expected to rise fairly quickly again in 2021, and is forecast to reach 2.1 percent by the end of the year.

There's more good news. The Federal Reserve Wednesday lowered interest rates for the first time since the Great Recession in 2008 to help prevent an economic downturn.