While a state economic forecast report by California Lutheran University shows some strengthening of retail sales and international trade for the rest of 2010, the state economy is still expected to remain weak. The 2010 Second Quarter United States and California Economic Forecast, released by the university’s Center for Economic Research and Forecasting, made projections by quarter for the remainder of 2010 and year of 2011. Retail sales, which have been declining for years, are expected to pick up, but not enough to create rapid 2010 GDP growth, the university announced. While the state’s retail sales could see some gains, after years of decline, the gains are expected to be minimal due to the strain of high sales taxes, the weak economy, high unemployment and increasing competition through the Internet. California’s real retail sales are expected to experience 0.1 percent in year-over-year losses at the end of the second quarter of this year, but then improve with 0.9 percent year-over-year growth during the third quarter. California’s gross product is expected to experience little change in the next few quarters, resulting in little private-sector job creation, weak wage growth and sustained high unemployment. California’s international trade appears to be strengthening with the help of its prominence on the Pacific Rim as China’s economic growth. With home prices remaining high, the report forecasts California’s residential real estate markets will remain subdued, and residential construction and building will likely remain at low levels. Meanwhile, public sector job losses over the next two years are expected to partially offset gradual private sector job gains. Unemployment is expected to slowly taper but remain high as temporary workers hired during for the Census return to the labor force. Jessica Selva
University Releases Dismal Forecast for California Economy
