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How Long Can The U.S. Economic Expansion Last? Leading Forecast Sees Growth Through 2021

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Health Care, Hospitality Industries Driving California Job Growth; Home Price Appreciation in State Showing Signs of Exhaustion

News Release — December 11, 2019 — Los Angeles, CA — Looking back at the turmoil and off-putting theatrics that have characterized U.S. politics for much of 2019, one item that will not make the year’s ‘list of negatives’ is the health of the nation’s economy—and that isn’t changing any time soon, according to a new forecast released by Beacon Economics. Today, the U.S. economy is in the midst of the longest expansion in recorded history and, despite dour headlines to the contrary, is expected to continue along that same growth trajectory for at least the next two years. 

“This outlook puts us squarely on the bullish side of things and outside mainstream opinion, but the facts as we see them simply don’t support a more negative narrative,” said  Christopher Thornberg, Founding Partner of Beacon Economics and one of the forecast authors. “Currently, there is little sign of the kind of collapsing imbalances or rapid shifts in aggregate demand that would be capable of pushing the economy into a downturn or even a protracted slow growth slump.” According to the new forecast, U.S. GDP will see 2% plus real growth in 2020 and will move towards 2.5% real growth in 2021. To date, the first three quarters of 2019 have averaged 2.3% growth.

This should not imply that there aren’t stressors on the economy warns the outlook, but rather that nothing on the current horizon rises to the level of imbalance or shock that could cause a downturn. However, Thornberg cautions that the outlook could change and that it is critical to maintaining vigilance in monitoring economic trends and activity given the unpredictability and hyper-partisan nature of current U.S. policymaking.

Moreover, while the nation unnecessarily flirts with short-run disasters, looming, long-run threats clearly imperil the nation’s economic health. “The healthcare cost crisis, the desperate need for pension and entitlement reform, dangerous trends in wealth inequality, among other issues are serious and growing risks that are largely being ignored and will come back to haunt us—the only question is when,” said Thornberg. 

Like the nation as a whole, California’s economy also continues along a steady growth path, even hitting a number of significant milestones in the last quarter. To date, the state’s unemployment rate has dipped to a historically low 3.9% as both worker wages and employment have reached all-time highs. “The longer the current expansion persists, the closer we are to the next recession,” said Taner Osman, Research Manager at Beacon Economics and one of the forecast authors. “But business cycles do not die of old age and, at present, there are few signs of a slowdown in the state’s economy.”

Key Findings: 

  • Much of the confidence surrounding the health of the U.S. economy lies with the consumer. A brief lull in spending growth at the end of 2018 reversed itself by the end of the first quarter of 2019. Consumer spending is now growing at roughly the same pace as U.S. GDP.
  • Falling interest rates are the reason the nation’s housing market is starting to bounce back with sales of new and existing homes up and home price appreciation beginning to accelerate. Moreover, none of the conditions for a major housing bust are in play… we’ve seen clean mortgage lending, no excess supply being built, and increases in overall affordability as measured by the housing cost share of income for U.S. households.
  • As a result of record-tight labor markets, many U.S. workers have seen significant jumps in earnings. In 2014, compensation for employees made up 60% of national income compared to 63% in 2019. Notably, most of this income has shifted from corporate profits, which fell from a near-record high of over 14% of all national income in 2014 to less than 12% this year. 
  • The one weak spot in the nation’s GDP data in 2019 was in business investment, however, spending is down in this area for a number of narrow reasons, but not many general ones. Weak export data has played some role in slowing investment, but overall, the impact of the trade war with China has been highly overrated.
  • Employment in California keeps on soaring with the state economy adding 308,000 jobs (a 1.8% growth rate) from October 2018 to October 2019. Fully 40% of this job growth came from just two sectors, Healthcare and Social Assistance, and Leisure and Hospitality, indicative of a growing elderly population and strong consumer health. Notably, the rate of job growth in the nation as a whole, at 1.4%, was lower than in the state over this period. 
  • Home price growth in California finally started to show signs of exhaustion over the past year. The median price for a single-family home in California grew 2.2%, which when adjusted for inflation, means that price growth has effectively been flat. This should not be surprising given the relentless pace of appreciation that has occurred in recent years, something that cannot realistically continue.  
  • Building needed! Building permits in California peaked in the first quarter of 2018 but turned negative in the third quarter—and have remained there throughout 2019. Constrained housing supply will continue to hinder home affordability and limit growth in the state’s labor force.

Download the full forecast here for additional insights.

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Beacon Economics is an independent economic research and consulting firm based in Los Angeles. This analysis was authored by Christopher Thornberg and Taner Osman. Learn more at www.beaconecon.com.

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

By Press Release

Asurion Tech Repair & Solutions™ Opens in Redlands 

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Asurion® Repair Experts Provide Fast Fixes on Phones, Tablets, Laptops, and More

A new electronics repair shop, Asurion Tech Repair & Solutions™, has opened in Redlands at 9980 Alabama St. The store offers professional fixes for most consumer electronics, from smartphones, tablets, and computers to game consoles, smart speakers, drones, and more.

While common repairs include cracked screens, battery issues, and water damage, the company’s repair experts have fixed millions of devices and can help with most any tech mishap, and many basic repairs can be completed in 45 minutes or less.

“I’m looking forward to the opportunity to introduce Asurion Tech Repair & Solutions to Redlands as we continue to serve this region,” said Damon Madison, Asurion Tech Repair & Solutions District Manager. “Our team prioritizes customer satisfaction above all else. By offering free diagnostics on all device issues, matching competitors’ prices, and guaranteeing fast-turnarounds on device repairs, we’re dedicated to making our customers’ experience affordable and convenient.”

The store’s expert repair technicians fix all kinds of technology, regardless of make or model, and the store is an authorized repair provider for Samsung Galaxy and Google Pixel smartphones. Customers can book a repair appointment online or stop by the store for walk-in service. The store offers free, no-obligation diagnostics on all gadgets, as well as a 1-year limited warranty on all repairs. It even offers a price match guarantee on any local competitor’s regularly published price for the same repair.

The new Asurion Tech Repair & Solutions store brings the company’s retail footprint to more than 750 locations across the U.S. Formerly known as uBreakiFix®, all U.S. locations will rebrand as Asurion Tech Repair & Solutions throughout 2022.

“We are excited to serve people in Redlands with fast and affordable tech repair,” said Dave Barbuto, CEO of Asurion Tech Repair & Solutions. “We all rely on our phones and laptops more than ever before, and our mission is bigger than repairing shattered screens and broken charge ports. We fix tech because people depend on it to stay connected to things that are important to them. I look forward to serving this community through our new location.”

The new store is located at:

Asurion Tech Repair & Solutions

9980 Alabama St Suite C, Redlands, CA 92374

(909) 801-3008

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New Partnership Announced; Stater Bros. Markets joins Entertainment Giant

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Toyota Arena has announced a new partnership with Stater Bros. Markets effective July 1, 2022.

Guests of the arena will soon be able to experience the new branding of the North Patio, which will include live concerts featuring local bands and up-and-coming professional talent. “We are thrilled to welcome Stater Bros. Markets as a partner to Toyota Arena,” said Michael K. Krouse, President & CEO. “It’s a natural fit – this is our community’s grocery store of choice and the amazing Stater Bros. Charities provides non-profit organizations in our local region with support. We are on board to help as well.”

The marketing amenities this partnership will provide Stater Bros. will include a presence on several assets including the arena’s Interstate 10 marquee, overhead LED scoreboard, television monitors throughout the facility, website, and more. The relationship created through this agreement will also provide benefits for Toyota Arena guests, including new Stater Bros.-inspired food and beverage options.

The benefits to the community will go beyond lifestyle and entertainment, however. Stater Bros. and Toyota Arena recognize the important role they play in the overall development of the City of Ontario. The city’s vigorous commercial and residential growth, and its status as a destination location will result in economic growth, jobs, and a thriving community. The partnership will also open up new opportunities to support the giving efforts of the market’s non-profit charitable arm, Stater Bros. Charities.

“This really is an exciting day for the entire Stater Bros. team. As a company, we work hard to establish great business relationships, and with Toyota Arena, we’ve found an excellent partner,” said Stater Bros. CEO Pete Van Helden. “I look forward to the new opportunities our partnership will bring and its benefits for the City of Ontario and the Inland Empire as a whole.”

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Business

IECE Presents its Inaugural State of Entrepreneur Report on Dec. 9

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The first-ever State of Entrepreneurship Address for the Inland Empire is being held by the Cal State San Bernardino Inland Empire Center for Entrepreneurship on Thursday, Dec. 9, from 5-8 p.m. at 4th Sector Innovations in Ontario. 

IECE’s goal in producing the State of Entrepreneurship research study is to bring the voice of local entrepreneurs to those who need to hear it most – local and state policymakers, community organizations, lenders, and other resource providers. 

The Voice of the Entrepreneur survey, on which the address is based, sends powerful feedback on the challenges that entrepreneurs and business owners of the Inland Southern California region face. 

Survey results were drawn out earlier this year by reaching out to IECE’s extensive network, consisting of more than 10,000 entrepreneurs and business owners representing a diverse group of industries. The IECE will continue to distribute the Voice of the Entrepreneur survey in the spring of each calendar year to find out what Inland Empire entrepreneurs and business owners are going through. 

The report is a potent tool for policymakers, economic impact drivers, and business owners and entrepreneurs to analyze growth potential within the region. Using measurable data, the goal is to identify the challenges and opportunities facing local business owners and obstacles that may be impeding business growth. 

The result is a concise report that gives insight into how we can effectively learn and evolve together with a regional focus. 

The evening will start and end with networking and food; in between, the SOER report will be presented, which includes examining the indicators of entrepreneurial activity and how the IE measures up as a region; learning of the Voice of the Entrepreneur direct survey results and the common themes, as well as an IE Ecosystem assessment; and regional perspectives from influencers that include: 

  • Rod Vandenbos, founder and CEO, buzzbox beverages, Indio; 
  • Mike Napoli, Tech Coast Angels, Palm Springs; 
  • Edward Ornelas, Jr. President, Inland Empire Regional Chamber of Commerce
  • Ana Karina Suchánek, president, Cask Restaurant Group, Inc., Rancho Cucamonga; and 
  • Pepi Jackson, president and CEO, Riverside Black Chamber of Commerce 

Click the following link – Secure Your Spot for the 2021 State of Entrepreneurship Address – to attend, network and learn more about entrepreneurship in the region. Whether you are a seasoned or soon-to-be entrepreneur, there is a perspective for everyone who wants to know more about how to strengthen the Inland Empire economy.

The presentation will unveil breakthrough metrics and perspectives on the State of Entrepreneurship throughout the Inland Empire, including: 

  • Why a report like this is essential for the collective growth of our region; 
  • What the report consists of: indicators for entrepreneurship and what real entrepreneurs in our communities are telling us through our Voice of the Entrepreneur survey results; and
  • Regional perspectives from influencers and officials that are active in our ecosystem. 

The event will also include food and cocktails while networking within an inspirational setting at 4th Sector Innovations Ontario. 

To learn more, visit the IECE State of Entrepreneurship Report website

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