CA Economy Will Grow Faster Than U.S. in Coming Years, UCLA Predicts

Recent approval of a measure to temporarily boost some taxes in the state will help shore up fiscal woes for the near term, Anderson Forecast says

By Sharon Bernstein
|  Wednesday, Dec 5, 2012  |  Updated 9:58 AM PDT
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UCLA: CA Economy Will Beat U.S.

Economists at UCLA are predicting that California will grow at a faster rate than the rest of the country in 2014, the university said Wednesday.

In its quarterly Anderson Forecast, the school said that the state’s fiscal condition will be boosted at least in the short term by last month’s passage of a ballot initiative to temporarily increase income taxes on the state’s highest earners. Sales tax will also be increased temporarily.

However, Jerry Nickelsburg, the senior economist for the report, said that the state still needs to address its long-term economic needs and budgeting issues. Those concerns were not addressed in the budgeting measure, which had been listed as Proposition 30 on last month's general election ballot.

The report predicted that employment in the state would grow 1.3 percent next year, and 2.4 percent in 2014. By the end of 2014, the report said, unemployment in California would be about 8.4 percent.

By contrast, the report predicted that the national unemployment rate would drop to 7.2 percent by that time.

Nickelsburg also wrote in the report that inflation would top 2 percent nationally in 2014, possibly bringing an end to the Federal Reserve Bank’s zero-percent interest rate policy.
 

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