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.
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
Inland Empire Chamber President Edward Ornelas, Jr. Named Finalist for Spirit of the Entrepreneur Awards
Celebrating Leadership and Innovation: Ornelas Recognized for Advancing Business Growth and Social Impact in the Inland Empire.
Edward Ornelas Jr., President of the Inland Empire Regional Chamber of Commerce and owner of the Inland Empire Business Journal, has been named a finalist in the famed 2024 Spirit of the Entrepreneur Awards. Ornelas is honored in the Social Entrepreneur category for his remarkable leadership and vision in fostering business growth and development across the Inland Empire. The award ceremony will take place on November 21, 2024, at the Riverside Convention Center, celebrating the best of entrepreneurship throughout the region.
The Spirit of the Entrepreneur Awards, often regarded as the “Oscars of Business” in the Inland Empire, recognizes the innovation, leadership, and impact of outstanding entrepreneurs across various sectors. Ornelas joins a select group of 34 finalists, each representing the entrepreneurial spirit and resilience that define the I.E. business community. The Social Entrepreneur category highlights individuals like Ornelas, whose work goes beyond profit to positively impact society.
In his role as President of the Inland Empire Regional Chamber of Commerce, Ornelas has been a powerful advocate for the business community, connecting small businesses with essential resources and creating opportunities for growth. As the owner of the IE Business Journal, the only publication in the region dedicated solely to business news, Ornelas has provided a platform for local businesses to thrive by sharing their stories and promoting their success. His innovative, forward-thinking approach to marketing has earned him a reputation as a “visionary” and a “get-things-done” leader across both public and private sectors.
“I’m deeply honored to be recognized as a finalist for the 2024 Spirit of the Entrepreneur Awards. This nomination is a reflection of the incredible businesses and community leaders across the Inland Empire who inspire me every day. At the Inland Empire Regional Chamber of Commerce, our mission is to empower businesses and foster economic growth, and this recognition highlights the collective efforts of our entire community. I’m excited for what the future holds as we continue to work together to make a lasting impact,” said Ornelas.
Other notable finalists for the 2024 Spirit of the Entrepreneur Awards include leaders in healthcare innovation, green technology, and digital transformation. Each finalist, selected by a distinguished panel of judges, represents the best in their respective industries and contributes to the Inland Empire’s continued growth as a hub of innovation and entrepreneurship.
The Spirit of the Entrepreneur Awards is an annual event that brings together business leaders, community advocates, and entrepreneurs to celebrate the entrepreneurial excellence that drives the region’s economy. This year’s event promises to be a night of inspiration and recognition, showcasing the achievements of finalists like Ornelas, who continue to elevate the Inland Empire’s business landscape.
For more information about the Spirit of the Entrepreneur Awards and to see the full list of finalists, visit www.spiritawardsie.com.
The office is designed to support hybrid work and employee wellbeing
CBRE announced the opening of its new 10,159-sq.-ft. office suite on the ground floor of 4141 Inland Empire Blvd., in Ontario, Calif.
The office is part of CBRE’s Workplace360 program, which features innovative office designs and functionality, including in-office technology and a wider variety of collaborative spaces designed to support hybrid working. CBRE launched its Workplace360 program over a decade ago in its downtown LA office. Since then, the company has opened more than 100 Workplace360 offices worldwide, continually updating the program as work habits have changed over the years, especially with the increase in hybrid work.
“Our newly renovated space provides us with a great opportunity to deliver a collaborative, experience-driven workplace that supports hybrid work,” said Ian Britton, managing director and market leader for CBRE in Inland Empire. “Our Workplace360 office will also serve as a showpiece to help clients conceptualize flexible work strategies for their employees.”
The renovated office has several different work areas including focus, huddle, living, and conference rooms. The open-space lobby, known as the “Heart,” features a variety of seating and a communal space for collaboration. A large 86” media display with a speaker system welcomes employees, visitors, and clients and assists with onsite events.
New office technology, including touch-enabled video conference rooms, allows for hybrid work collaboration between in-office and remote employees and clients. Additionally, the Mt. Baldy conference room has Liquid Galaxy, a geospatial visualization platform set across large format curved screens providing a cinematic presentation experience. This room has an operable wall that opens to the Heart, creating an onsite event space.
A cornerstone of the Workplace360 model is its free-address approach, in which there is no dedicated seating. The free-address approach allows employees who are in the office on a given day to use any workstation or office.
The office’s design led by CBRE Design Collective, took inspiration from the Inland Empire’s orange groves and mountainous landscapes of Mt. Baldy. Images of Route 66 from local photographer VC Torneden features the role the highway plays in the area.
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