Economists Give Moderately Optimistic Forecast
GDP, Jobs and Housing Give Positive Signs for Nation, OC
April 19, 2013
Anil Puri, dean of Mihaylo College of Business and Economics, discusses the economy at the Midyear Economic Forecast April 18.
"This is probably the most optimistic forecast in the last 4-5 years," said Anil Puri, dean of the Mihaylo College of Business and Economics, during yesterday's Midyear Economic Forecast delivered before an audience of about 200 business and campus leaders.
"Overall, we are much better today than in October," he added alluding to last fall's forecast.
Puri then delved into specific areas that point to an improving economic future — increases in the gross domestic product (GDP) and upticks in the private sector, real estate and financial sectors. "Household wealth has recovered to levels before the recession, and household debt is the lowest it has been in 30 years," he explained. "Corporate profits are at record highs."
The only thing that might pull back on the economy, Puri noted, is the government or public sector.
"Deficits are declining," he said. "That's a good thing, but it also means a drag on the economy."
What is most of concern, especially regarding federal debt, are entitlements, the economist explained. Left unaddressed, federal debt will increase, rather than improve, he said.
For national forecasts, Puri believes that real Gross National Product will grow 1.9 percent this year; consumer prices by 1.8 percent and payroll employment by 1.6. He expects unemployment to drop to 7.5, down from last year's 8.1 percent.
There are risk factors to consider for both the short and long term, said Mira Farka, associate professor of economics, citing lower production growth and a demographic change with more seniors and fewer in the labor force.
On the energy front, Farka sees positives, with America becoming the largest producer of natural gas in the world and having the technological skills to become the largest producer in oil.
For Orange County, both Puri and Farka see a similar trend in the economy, though at a slightly more upbeat pace than nationally.
Puri ended the presentation saying that he sees increasing innovation helping to develop substantial growth for the county, the region and the nation.
The complete midyear report is available online.
By: Pamela McLaren, 657-278-4852