Yesterday, Pepperdine University’s Graziadio School of Business, in partnership with Beacon Economics, released its outlook for the California economy—exactly one day after UCLA’s Anderson Forecast came out.
Beacon principal and founder — and frequent KPCC guest on "Airtalk" and "The Patt Morrison Show — Chris Thornberg gently ribbed the Bruin economists. "Yesterday was the rookie game," he said. "Today in the slam-dunk contest!"
The Anderson Forecast for the U.S., California, and L.A. economies is cautiously optimistic. Pepperdine and Beacon are more bullish.
But there is one big difference between the two forecasts, and it comes down to an analysis on the changing — or not changing — economic geography of the state.
The UCLA economists say that California is two states — the recovering coastal regions and the still-depressed inland areas. A cratered housing market and unemployed construction workers are what’s holding back inland California. Meanwhile, in the Bay Area, Silicon Valley is hiring.
Thornberg thinks this isn’t exactly right. He says the state’s inland regions took the biggest hit on the housing front. But he sees housing turning a corner there.
When it comes to our core industrial regions, the contest is still between north and south — and the south is lagging. For L.A. this is what economists call a “structural problem” — we just have the wrong mix of businesses to meet demand that is growing.
But there is one bright spot: tourism. It’s tough to get a job in L.A., but people still want to visit. And after "Forecast Week" in L.A., I kind of feel like I could use one!