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Vaccination Ramp-Up will Herald Exceptional Economic Growth in 2021-2022, Says Leading Forecast; Relief in Sight for Hardest Hit Sectors

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Craving ‘Normal Activity’, Consumers Will Drive Growth; Trouble On The Horizon: The Cost Of Excessive Monetary And Fiscal Stimulus

The economic recovery from the historic COVID-19 pandemic that began last year regained steam at the start of 2021, and record savings and hot financial markets indicate an even more accelerated upturn will play out across the rest of the year. According to Beacon Economics’ latest outlook for the U.S. and California, the pandemic exacted its heaviest and most persistent damage within job markets, but a quickened pace of vaccinations and the easing of health-mandated restrictions nationwide is setting the stage for a major hiring bounce.

At the start of the pandemic the U.S. saw its payroll workforce decline by approximately 22 million jobs as the unemployment rate soared to 14.8%. The damage was not evenly distributed with some 40% of the losses occurring in the Leisure and Hospitality sector alone. But as of March 2021, 62% of the lost jobs have been recovered and the U.S. unemployment rate has fallen to 6%. Moreover, the job openings rate is currently higher than it was pre-pandemic, and wages among workers who have kept their jobs have continued to grow at a normal pace.

“As good as this data is, we’re not there yet. But even the most damaged industries are starting to see light at the end of the tunnel while industries that were essentially unscathed are facing tight job markets and having trouble hiring people,” said Christopher Thornberg, Founding Partner of Beacon Economics and one of the forecast authors. “Additionally, the depths to which badly affected labor markets sank have created conditions for exceptional growth as restrictions on activity – the only thing preventing hard-hit industries from expanding – recede.”

The new forecast estimates that the nation’s unemployment rate will shrink to 5.7% in the 2nd quarter of 2021 and to 4.9% by the end of the year.

Driven by consumer demand, other parts of the U.S. economy have already rebounded sharply, even flourishing throughout the pandemic. “Frustrated consumers who were denied an opportunity to eat at a favorite restaurant or fly to Disney World, spent unused dollars in other areas of the economy such as buying houses, campers, and home goods,” said Thornberg. “This is why worker earnings have recovered, job openings have remained remarkably high, and there was a surge in corporate profits – to their highest point ever in the second half of last year.”

While U.S. GDP experienced its largest annual decline in decades in 2020, these losses will be offset and the economy will likely return to trend this year – driven primarily by consumers, according to the new outlook.

Like the nation, California’s pace of vaccination has ramped up and the easing of restrictions will accelerate the state’s labor market recovery (assuming health criteria is met, the state is scheduled to fully open on June 15). As of March, California had 8.6% fewer jobs compared to pre-pandemic levels, while the national economy had 5.5% fewer jobs. “The state finds itself in a deeper hole with respect to jobs lost than is the case nationally,” said Taner Osman, Research Manager at Beacon Economics and one of the forecast authors. “But that relative underperformance will likely translate into higher job gains in 2021.”

The new outlook estimates that California’s unemployment rate will shrink to 7.1% in the 2nd quarter of 2021 and to 4.4% by the end of the year.

Also like the nation, while the state’s job recovery lags, many aspects of California’s economy have returned to their pre-pandemic trends, and some, such as the housing market, boomed over the past year. Home prices in the state increased 15% from the 4th quarter of 2019 to the 4th quarter of 2020, compared to just 5% growth from the 4th quarter of 2018 to the 4th quarter of 2019. Moreover, a severe shortage of housing supply in California will continue to place upward pressure on home prices in the year ahead, said Osman.

Additional Key Findings:

  • In California, sales of single-family homes have also increased, jumping by 24% from the 4th quarter of 2019 to the 4th quarter of 2020. This rate of sales is unsustainable, however, as supply and inventory constraints will act as significant headwinds.
  • The economic fallout from labor market losses in both the U.S. and California disproportionally affected the lowest wage earners. An unprecedented policy response by the federal and state governments went some way towards dulling the pain.
  • This year, the Federal deficit will be on the order of $4 trillion. In two just two years, the United States has issued $7 trillion in new debt—an amount equal to 30% of the nation’s GDP, or $24,000 for every person in the United States under the age of 70. This threatens to be an overstimulation and could have seriously distorting economic consequences in the future.
  • U.S. commercial bank deposits mushroomed during the pandemic, increasing by $3 trillion in 2020 compared to 2019 levels.
  • Over the past year, the nation’s household savings rate shot up to levels never seen in U.S. history: 25% in the 2nd quarter of 2020 and a still high 13.4% by the end of last year. This was driven by the fiscal stimulus but also by the fact that spending dropped significantly.

View the newly designed 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

CBRE Opens Newly Renovated, Tech-Enabled Office in the Inland Empire

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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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Local Veteran and His Family Open New Graze Craze Charcuterie Business in Murrieta, California

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Southern California wine country gets another stylish culinary option, offering beautifully designed, hand-crafted grazing boards and picnic boxes

Graze Craze® has opened a new location close to the wine country of Southern California, where its artfully arranged sweet and savory grazing boards and boxes create a perfect pairing for food lovers. Located at 24530 Village Walk Place, Suite C, in Village Walk Plaza, the 1,021-square-foot store is owned and operated by disabled veteran Chris Stout and his wife, Stephanie Stout, with assistance from their teenage children.

At Graze Craze, highly trained experts known as Grazologists™ skillfully design charcuterie arrangements that feature an assortment of fine ingredients perfect for grazing, like fresh fruits and vegetables, premium meats and cheeses, artisanal sweets, nuts, house-made jams and more.

Chris Stout enlisted in the U.S. Navy in 2001 and served several deployments before being discharged in 2012. Since then, he has worked as a field service engineer for an electronics company and in manufacturing sales. Stephanie Stout has a bachelor’s degree in business accounting from the University of Phoenix and worked for an insurance broker before the couple’s first child was born; she then devoted herself full-time to raising their three children, who are now in high school.

Graze Craze charcuterie boards offer something for every lifestyle, dietary preference or palate and are available in a variety of size options to cater to any occasion, big or small. They incorporate a medley of flavors, like the fan-favorite Gone Grazey board, a perfectly balanced mix of cured meats, premium cheeses, crackers, fresh produce, nuts and more. The Vegegrazian is impeccably designed with a plethora of fresh fruits and vegetables for anyone embracing a plant-based lifestyle. Those with an undeniable sweet tooth can enjoy the Sweet & Grazey, a hand-crafted board featuring an abundance of delectable desserts like chocolates and baked goods paired with sweet dips to accent the irresistible flavors.

New to the Graze Craze menu is the Brunch Board, a gourmet and innovative twist on any morning routine. Packed with breakfast meats, fresh fruits, eggs, pastries and more, this board is the perfect bagel-and-donut brunch alternative. Grazers can also tackle watch-party cravings with a seasonal Game Day Board, featuring a feast of

crowd-pleasing ingredients, like peppered salami, Italian prosciutto, goat cheese, cranberry walnut bread, raspberry jam and chocolate bark, to name a few.

The artisan-inspired charcuterie offerings at Graze Craze are available in different size options, from Char-Cutie-Cups and Picnic Boxes for nibbling to sharing-size boards with enough fresh food to feed a large party. The food displays are ideal for elevating work meetings, family gatherings, lavish events and more, while they also make for memorable gifts that impress.

Besides sharing the flavorful menu with the area, the Stouts are actively involved in numerous local school, business and community organizations. The pair supports the Murrieta Valley High School Marching Band Boosters and California High School Rodeo Association District 8, in addition to the Boy Scouts of America California Inland Empire Council and Friends of Temecula Troop 309, where Christopher Stout is a part of the adult leadership team. The couple has also worked with Homes For Our Troops, an impactful nonprofit organization that builds specially adapted homes for post-9/11 disabled veterans.

Graze Craze Murrieta is open for pick-up, catering and free local delivery Monday through Saturday from 9 a.m. to 6 p.m. and Sunday from 10 a.m. to 2 p.m. For more information, call 951-942-7293.

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Partners in Action: How CalOSBA is bridging the gap in funding and resources for Inland Empire small businesses

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By Josaline Cuesta, California Program Director, Small Business Majority & IEBJ Content Contributor

For Tara Lynn Gray, Director of the California Office of the Small Business Advocate (CalOSBA), entrepreneurship has always been a core principle of her life. Her journey as an advocate for small businesses wasn’t built on textbooks, but on her family’s roots in small business ownership. As a young girl, she watched her grandmother empower and elevate Black women’s presences by styling their hair and instilling confidence in their personhood. She witnessed the direct impact of small businesses on community members in real time, and that’s always stayed with Tara.

As a key partner of Small Business Majority, she stands as a champion for the dreamers and risk-takers; the pillars of the communities across California and in the Inland Empire. I chatted with her to share more about her work at CalOSBA, what entrepreneurs can expect when they meet with a CalOSBA advisor, and the resources and community support available to help boost entrepreneurship in the Golden State.

Tell us about CalOSBA’s role in the small business community.

“California has the biggest small business community in the country, accounting for 4.1 million small businesses in 2023 alone. The overwhelming majority have no employees at all, except themselves, which means they don’t have a Board of Directors, expensive consultants, and they definitely don’t have lobbyists. I take my role as their advocate seriously, talking with and listening to small business owners from up and down the state. During the pandemic, we were under a very bright spotlight, administering nearly $5 billion in direct relief funding and we’re proud of the grant programs we still oversee. But that’s only a small part of what we do at CalOSBA.

My team connects small business owners to information and resources to help them get started, manage their business and, most importantly, to grow. If they’re looking for help, we want to be the first door they knock on. In addition, we offer Outsmart Disaster training, which focuses on how to mitigate risks associated with natural disasters and recovery avenues available to them. I always say the flagship of our office is our support for the statewide network of Small Business Centers, providing 1:1 business assistance and training for small business owners of all industries and in dozens of languages. In addition, supporting partners that deliver these services–all the federally funded centers like the Small Business Development Centers and the Women’s Business Centers but also Chambers of Commerce and other nonprofits—is a core function of my office. And a big source of pride because we know what a difference they make for their clients.”

What can small business owners expect from meeting with a California Small Business Center advisor?

“Small business owners can expect to meet someone who is fully invested in them. Our Centers cover the full spectrum of business needs, from writing a business plan and obtaining the right permits and licenses, to finding capital, planning a succession strategy and marketing to e-commerce. Our business advisors provide the experience and the objective perspective to help business owners optimize their best assets: ideas, energy, and ability to keep adapting and learning. And they do it because they love helping other people succeed. What’s more, business ownership can become isolating and it may be challenging for entrepreneurs to find assistance. But they don’t have to go at it alone–and they shouldn’t, when these no-cost and low-cost services are available to them.”

What’s the most rewarding part of your role at CalOSBA?

“I always say I have the best job in the state. And it’s because I frequently have the honor to watch someone’s dream come true. I love a ribbon-cutting ceremony–Every time, big or small. It means someone dreamed of accomplishing something and worked hard for it: They opened the doors to their business, they made a sale, and hopefully they will hire their first employee and then it’s off to the races. But no matter what happens to that business, that ribbon-cutting is a milestone they made happen for themselves. There are many other events I get invited to, where you can just see the hope and pride, and even fear in their faces. I’m often overwhelmed by the sheer emotion of it, and I’m always humbled that I get to participate in that person’s big milestone.”

What are some new programs that can benefit small business owners in the Inland Empire?

“The number one question my office gets asked is how to access small business financing. To help address this key need, we’re launching the Technical Assistance for Capital Readiness program this February. The program is part of a bigger effort to fill well-known funding gaps in the state to benefit very small businesses and Socially and Economically Disadvantaged Individuals (SEDI). Through investments from the U.S. Treasury, the State Treasurer’s Office and IBank, the program is going to support lenders to facilitate “high risk” loans that they normally would not approve.

In addition to supporting lenders, my office also received $25.3 million in U.S. Treasury funding to start the new Capital Readiness network. The Capital Readiness Coaches in this network will help business owners get ready for the lending marketplace, help them make the best choices in a high interest-rate environment, and optimize the use of the capital once they receive it. The network is also designed to help spread the word about this opportunity to these SEDI-owned businesses, and some of those partners will be focused on supporting the Inland Empire small business ecosystem.”

How can business owners get in touch with CalOSBA?

“That’s simple! Check out calosba.ca.gov and sign up for our monthly newsletter, where I write a column and showcase success stories from our network, along with deadlines and updates on grant and workforce support programs. We’re also on social media, so I would encourage business owners to check out all of our channels.”

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