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Excessive Stimulus ‘Dangerously’ Overheating the U.S. Economy; Near Term Forecast Still Strong But Long Run Instabilities Loom

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Home Price Surge Intensifying California’s Workforce Shortage

The 3rd quarter’s real U.S. GDP growth rate disappointed many observers and set off calls to continue various Federal government stimulus programs, or at least slow their reduction. However, a well-regarded economic forecast argues that there is nothing intrinsically worrisome about the 2.1% GDP growth rate (in the nine years leading up to the pandemic, the U.S. economy grew at this same pace or slower for 16 out of 36 quarters) and that over stimulus is now the real threat to the economy.

According to Beacon Economics latest outlook for the United States and California, the U.S. economy has recovered from the pandemic recession, which ‘officially’ ended in May 2020 (peak to trough), and is now becoming dangerously overheated as a result of excessive stimulus – triggering today’s hyperinflation, labor shortages, and severe supply chain disruptions.

“In a normal year, this rate would be applauded as a solid growth trend, but because job numbers and real economic output are still lower than they would have been had the pandemic not happened, we’re hitting the panic button,” said Christopher Thornberg, Founding Partner of Beacon Economics and one of the forecast authors. “Numerous metrics combine to constitute an economic recovery and so many are currently at red hot growth levels that continuing to pump stimulus into the economy in an effort to chase down raw job counts and domestic output will do more harm than good.”

According to the new analysis, job and output numbers are not the sole, and sometimes not even the most important, metrics in terms of economic recovery after a recession. The outlook points to a host of key indicators that are overheated or flourishing including consumer spending, government spending on public services, business investment, real estate markets, personal wealth and earnings… and job opportunities. While there are 4 million fewer payroll jobs in the United States today (2.6% less than pre-pandemic), there are 10 million job openings – a result of record high retirements and quitting. The nation’s unemployment rate has also fallen to 4.2%, just 0.7 percentage points higher than its pre-pandemic low, which was itself one of the lowest in U.S. history.

“The real problem in today’s jobs market is the 3-million-person decrease that has hit the U.S. labor force; it isn’t normal,” said Thornberg. “We’ve been facing a looming labor shortage for years, driven by basic demographics, but the excessive stimulus has hastened the process and we need to step off the accelerator.”

Many parts of California’s economy have also returned to pre-pandemic levels, but like the nation, the state is challenged by a diminished labor force which has led to a severe shortage of workers. According to the outlook, California’s labor force has 414,700 fewer workers than it did pre-pandemic.

“The state’s shrunken workforce has emerged as the biggest constraint on future employment expansion,” said Taner Osman, Research Manager at Beacon Economics and one of the forecast authors. “Although Governor Newsom has just reinstated a statewide indoor mask mandate, restrictions on business activity have been removed for months and are not the main driver of California’s labor market issues – worker supply is.”

There are still 5% (900,000) fewer jobs in California than there were prior to the pandemic, compared to 2.8% fewer jobs nationally. In some other states, the number of jobs has exceeded pre-pandemic levels.

The underlying issue that is most exacerbating California’s struggle to attract and retain the workforce it needs, is the price of housing. In the third quarter of 2021, California’s median home price surged to $651,383, compared to the national median of $404,700. “That kind of price disparity is bound to have a major impact on where workers choose to live, most especially lower-income workers who are impossibly strained in California’s housing environment,” said Osman. The new outlook is forecasting home prices in the state to steadily climb throughout 2022.

Overall, the near-term economic forecast in both the United States and California boils down to a strong run over the next couple of years (with labor supply being the biggest constraint), but with long-term storm clouds on the horizon. U.S. GDP is forecast to grow by 5.3% in the 4th quarter, falling to a more sustainable 3.7% in the 1st quarter of 2022.

View The Beacon Outlook here.

The Inland Empire Business Journal (IEBJ) is the official business news publication of Southern California’s Inland Empire region - covering San Bernardino & Riverside Counties.

Business

Fire Helmet Manufacturer Helps Disabled Community find Employment

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Riverside’s Phenix Technology Leads with Inclusion, Empowering the Disabled Community Through Workforce Training and Employer Education

Written by Logan Rosselli, IEBJ Content Contributor

In the heart of Riverside, off of Chicago Avenue, a small, but mighty team has been quietly manufacturing life-saving equipment for firefighters across the world for over 50 years. Phenix Technology Inc. is an internationally recognized fire helmet manufacturer who builds their products from start to finish right here in the Inland Empire. For their great products, they’ve received numerous awards such as the Greater Riverside Chamber of Commerce’s 2025 Innovator of the Year, a 2016 “E” for Exports award from the U.S. Department of Commerce, a finalist position in the “Coolest Thing Made in California” competition and more. However, their most recent accolade doesn’t involve their products at all.

In 2024, Phenix founded the ground breaking “Opportunity for All” program to provide disabled community members with the opportunity to access career education, hands-on experience and employment opportunities through an 11 week training cohort. In this program, neurodivergent individuals wanting to find stable employment learn about standard hiring practices, writing a resume, effective interviewing and professional attire while getting on-the-job training with a partnered employer in the community. It has helped dozens of disabled community members to find a new sense of independence and achieve their full potential while helping local employers find dependable employees who bring a unique perspective to the workplace.

It’s for this program that the National Association of Workforce Development Boards (NAWB), a representative of over 570 workforce development boards across the United States, honored Phenix with the prestigious W.O. Lawton Business Leadership Award in late March.

“While we take tremendous pride in the products we make, we also believe we have a mission to create a better world through developing opportunities,” said Angel Sanchez, CEO of Phenix Technology in a statement released in early April. “Opportunity for All has helped prove that individuals who have historically been excluded from the workforce don’t just contribute — they elevate organizations. We are honored to receive this national award and grateful to the partners who have helped us make this vision a reality.”

CEO Angel Sanchez Jr. accepts the NAWB Award

CEO Angel Sanchez Jr. accepts the NAWB Award

Though “Opportunity for All” is certainly the cornerstone program for the company, Phenix’s leadership team was not satisfied to leave their mission there. Thus, in 2024, the company founded its nonprofit arm, Phenix Gateway to offer more programs and advocacy to the community. Through Phenix Gateway, the company offers workforce development workshops for individuals who don’t need the full scale of the “Opportunity for All” program, but want to improve a specific skill like resume writing or workplace social skills.

However, Phenix knows that preparing disabled people for the workforce is only one end of the equation; the workforce also has to be prepared to accept the unique skills, perspectives and challenges of the disabled community. For this reason, Phenix Gateway offers employer training workshops as well as educational materials available to businesses and the community. Training programs cover a lot of ground, ranging from assistance with optimizing interviews for people with neurodevelopmental disorders to creating sensory-friendly environments in the workplace.

In Riverside, these programs have had a huge impact on the local community. As of March 2025, Phenix’s Opportunity for All program has had over two dozen participants and 44% found stable employment through or after the program. Their one-off workforce development workshops have seen over 200 participants learn new skills and help them find employment and the nonprofit currently partners with close to 90 businesses to assist them in their endeavor to create a more inclusive workforce.

Phenix Gateway staff helps a program participant with his skills

For businesses or community members interested in learning how they can support or participate in these programs, Phenix encourages them to reach out by email to info@phenixgateway.org and to attend their First Annual Gala: Rising Together, A Phenix Gateway Celebration, on Thursday, May 15th. Tickets for this event are available at phenixgateway.org.

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Supported by Local Leaders, CALED’s Annual Conference will be in Ontario this May

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Empowering Economic Growth: CALED Conference Set to Unite Industry Leaders in Ontario

CALED’s ‘Growing Local Economies from the Ground Up’ Conference is being held in Ontario at the DoubleTree by Hilton Hotel Ontario Airport on May 7-9. This event is co-hosted by the City of Ontario and San Bernardino County, with Jennifer McLain Hiramoto, CALED’s Chair of the Board and Derek Armstrong respectively representing their city and county as Co-Chairs of the event.

With over 950 members and 45 years of empowering economic developers, CALED is the largest economic development association in the country and the annual conference is the number one place to meet and connect with the boots-on-the -ground, decision makers in our communities. 

The conference will include a pre-conference teaching tour, ‘Building & Paying for Development Projects’ on May 6th and then begin in full on May 7th, with a welcome session and breakouts. Overall, there will be four general assembly sessions and 18 breakout sessions, which will delve into local economic development practices and innovative tools.

In addition to compelling content, the conference will have numerous opportunities to connect with community leaders and valued peers through networking receptions, the culinary crawl, and new this year, the Tournament of Champions, where conference attendees will navigate a gauntlet of games to win the grand prize on the evening of Thursday, May 8th.

To learn more about the conference and register, visit the CALED website at www.caled.org.

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Strengthening Community Connections: Our Exciting New Partnership with Toyota Arena, Ontario Convention Center, and GOCAL

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Contributed Content | By Chris Venhoff, Senior Vice President and Inland Empire Market Leader for Consumer and Business Banking at U.S. Bank

As the Inland Empire market leader for U.S. Bank, I’m thrilled to share some exciting news: we are proud to be the Official Bank Partner of Toyota Arena and Ontario Convention Center. This partnership represents a reflection of our deep commitment to the Inland Empire and our dedication to fostering a vibrant, thriving community.

At U.S. Bank, we believe that strong partnerships drive meaningful progress. Toyota Arena and Ontario Convention Center are at the heart of the region’s culture and economy, bringing people together for world-class entertainment, business conventions, and community events. By joining forces, we’re not only expanding our presence but also creating opportunities to engage with residents, businesses, and organizations in ways that make a lasting impact.

Through our sponsorship, we’ll support concerts, sporting events, and conventions that showcase the diversity and energy of the Inland Empire. But this is only the beginning. As our partnership evolves, we’ll work closely with Toyota Arena, Ontario Convention Center, and GOCAL to introduce community-focused programs, including financial literacy workshops and charitable giving initiatives.

This partnership is designed to bring added value to the people we serve. For our customers, we’re introducing the U.S. Bank Fast Pass Lanes, providing priority access at Toyota Arena events. Special offers, exclusive event experiences, and tailored financial solutions for businesses operating in the region are just a few of the many perks we’re excited to roll out.

Our employees are at the core of our success, and this partnership allows us to recognize their dedication. Through exclusive access to events, corporate hospitality opportunities, and community volunteer programs, our team will have new ways to engage with and celebrate the community they serve.

The Inland Empire is a dynamic, fast-growing region, and we’re committed to supporting its continued success. By investing in Toyota Arena and Ontario Convention Center, we’re helping to create and sustain jobs while driving local business growth. These venues bring in visitors, revenue, and visibility, strengthening the region’s economy.

This collaboration is about more than just sponsorship—it’s about making a difference. By working together, we can elevate not just these venues but the entire Inland Empire. At U.S. Bank, we’re committed to being a partner in progress, supporting our customers, businesses, and communities every step of the way.

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