UCLA Anderson School Economic Forecast

In its fourth quarterly report of 2006, the UCLA Anderson Forecast refuses to join the growing chorus of experts predicting a recession. The Forecast notes in particular that, “manufacturing is not poised to contribute much to job loss,” and, “real interest rates are very low and there is no evident credit crunch, not on the horizon.” The report concludes that in light of these conditions, the problems in the housing sector are less severe than they would be otherwise. In short, the decline in the housing sector will be isolated and, while a drag on the national economy, is not enough to cause a recession during the forecast period. The forecast for California is much the same with a declining housing market slowing the economy but, without a secondary source of economic distress, it’s not enough to cause a recession.