Business
U.S. Economic Growth: Better Than Expected But Not as Good at IT Appears Says New Forecast; Still, no Recession in Sight
California Shifts To A Lower Pace of Job Growth
June 13, 2019—LOS ANGELES, CALIFORNIA—Despite the United States economy being on the edge of its longest expansion in history and a plethora of negative outlooks on the economy, a new forecast released today by Beacon Economics says there is no reason to anticipate a downturn until at least beyond 2020. While the new outlook warns of a slowdown in the nation’s economy, something that is already occurring, it argues that nothing on near-term horizon has the capacity to cause a contraction.
“We simply do not see the kinds of imbalances or rapid shifts that would be forceful enough or deep enough to push the economy into recession,” said Christopher Thornberg, Founding Partner of Beacon Economics and one of the forecast authors. “It’s certainly not going to happen in 2019, and highly unlikely to occur next year.” Thornberg is quick to point out, however, that no one should expect the expansion to reach or maintain 2018 levels and is forecasting the pace of U.S. economic growth to decelerate to approximately 2% this year. The slowdown is being driven by a number of sources including the end of the short-term stimulative effects created by the 2017 Tax Cuts and Jobs Act, intensifying trade disputes with key trading partners, and financial market wobbles that will keep investors looking for safety.
The new forecast points to the first quarter of 2019 as evidence of moderating growth. Although on the surface the nation’s 3.1% growth rate was one of the fastest in recent years, half of that expansion comes from highly transitional sources, including a large drop in imports and a build-up in business inventories. Growth in final demand in the first quarter was a weak 1.5%, the worst showing since 2015.
Perhaps the biggest threat currently facing the U.S. economy is the potential of spiraling trade disputes with China, and possibly Mexico and Europe. However, even that threat has been hyped to a level that exceeds reality, according to the forecast. The tariffs have indeed been a negative challenge for the groups and businesses directly impacted by them, but at its current level, the turbulence is not a threat to broader economic growth. That could change, however, if the disputes balloon or spread.
Additionally, the forecast raises concerns about the potential long-run consequence of conflating trade policy with foreign policy, as it appears the current administration is willing to do. “The trade-related actions now being taken by the U.S. undermine the nation as a protector of free trade in the broader global community,” said Thornberg. “Even if we win a specific trade war, the chaotic threats and unilateral policy choices destabilize the international trading system, and harm cooperative global political efforts at a time when governments around the world really need to address challenges in a collective way.”
Key Findings:
- U.S. consumer spending was weak in January and February, but in March recorded one of the largest jumps in a decade and was solid in April. The U.S. personal savings rate also increased in the first quarter indicating that the slower growth in spending was not being generated by income issues. All this suggests solid consumer spending numbers for the balance of 2019.
- Residential real estate has been a modest drag on the U.S. economy for over a year now. The market has swooned but will likely get a boost in the second half of the year given strong fundamentals and one of the tightest housing markets in decades.
- A counter-weight on the otherwise good fundamentals of the U.S. economy is the nation’s debt. The Federal government borrowed over $1 trillion in 2018 to cover the gap between revenues and expenses, twice the pace of 2017 and the worst showing since 2012 when the nation was clawing its way out of the Great Recession. While a public debt crisis is still far in the future, such misguided policy choices bring the day of reckoning closer.
- California’s economy has shifted to a lower pace of job growth in the first part of 2019 and will remain on that slower trajectory. Job growth in the state will continue, however, led by the tech-fueled economies of the San Francisco Bay Area.
- Despite the jobs slowdown, California continues on an impressive growth path with Gross State Product advancing by a 3.5% rate in 2018, faster than the nation as a whole and among the fastest growing states.
- California’s housing market may perform better this year than many expect. The 30-year fixed interest rate recently dropped to 4% and softer prices are expected due to an increase in the supply of homes for sale. Expect sales to improve in the second and third quarters of 2019 and the median price to advance modestly.
Download the full forecast for additional insights.
Beacon Economics is an independent economic research and consulting firm based in Los Angeles. This analysis was authored by Christopher Thornberg and Robert Kleinhenz. Learn more at www.beaconecon.com.
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.
Business
Strengthening Community Connections: Our Exciting New Partnership with Toyota Arena, Ontario Convention Center, and GOCAL
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.
Honoring Visionary Leaders Driving Innovation and Community Impact
The Spirit of the Entrepreneur Awards Gala, held at the Riverside Convention Center, celebrated the brightest entrepreneurial talent across the Inland Empire. Among the evening’s finalists was Edward Ornelas, Jr., President & CEO of the Inland Empire Regional Chamber of Commerce, who was honored in the Social Entrepreneur category for his outstanding leadership and commitment to the region.
Although Ornelas did not win, the Social Entrepreneur award went to Cesar Navarrete, President & CEO of Children’s Fund, a proud Chamber member. “Being a finalist alongside such remarkable leaders is an incredible honor,” said Ornelas. “I am especially thrilled to see Cesar, a Chamber member, recognized for the transformative work he’s doing to improve the lives of children in our community. It’s a proud moment for us all.”
Another highlight of the evening was the recognition of Hilda Kennedy, President & Founder of AMPAC Business Capital, another Chamber member, who was awarded the Top Female Entrepreneur category. Hilda’s leadership at AMPAC, a mission-driven business lender, has been instrumental in empowering small businesses and fostering economic growth across the region.
“It’s amazing to see leaders like Hilda and Cesar being celebrated for their contributions,” added Ornelas. “Their achievements underscore the talent and dedication of entrepreneurs in our Chamber and across the Inland Empire. They are setting the standard for excellence and impact in their fields.”
The evening also featured the prestigious “Best of the Best” Award, sponsored by Best Best & Krieger LLP, which was awarded to Mauro Gomez, Chief Growth Officer of Anita’s Mexican Foods Corp.. Based in San Bernardino, Anita’s Mexican Foods has grown from modest beginnings into a leader in the food production industry under Gomez’s strategic direction.
The Spirit of the Entrepreneur Awards Gala continues to shine a spotlight on the transformative work of Inland Empire entrepreneurs, celebrating their innovation, resilience, and commitment to the community.
For more information about the Spirit of the Entrepreneur Awards, visit https://www.spiritawardsie.com.
For more details about the Inland Empire Regional Chamber of Commerce and its members, visit www.iechamber.org.
|
Business Journal Newsletter
|
-
Construction2 months agoTricon Residential Expands California Housing with New Built-to-Rent Community in Corona
-
Entertainment3 months agoMain Event Joins Inland Empire Regional Chamber of Commerce: Bringing Premier Family Entertainment to Montclair
-
Commercial Real Estate4 months agoValore Ventures Sells SoCal Single-Tenant NNN Retail Property
-
Business2 months agoStrengthening Community Connections: Our Exciting New Partnership with Toyota Arena, Ontario Convention Center, and GOCAL
-
Travel & Tourism3 months agoOntario International Airport to welcome STARLUX as its newest airline partner in June 2025
-
Travel & Tourism3 months agoOntario International Airport Expands Reach with New Daily Flights to Chicago O’Hare