CA’s Economy Poised for Better Growth, but Slow to Normalize

Golden Gate Bridge

After slowing in late 2020, California’s economic recovery is expected to kick into higher gear during early 2021 — although much hinges on the state’s reaction to weekly COVID-19 numbers, the vaccine distribution effort, and persistent restrictions on businesses and gatherings.

Credit union leaders embarking on the new year can view the California Credit Union League's entire forecast report, which compiles the most recent statewide trends and business/consumer indicators from several recent economic think-tank conferences and private consulting groups across the state.

Included are future projections and recent trends published between early December 2020 to early January 2021 by UCLA Anderson Forecast, Beacon Economics consulting firm, California Economic Forecast consulting firm, Chapman University, Claremont McKenna College, the Economic Roundtable, U.S. Bureau of Labor Statistics, Challenger Gray & Christmas Inc., U.S. Census Bureau, Caltrans economics department, Homebase, and the California Center for Jobs and the Economy.

In short:

  • California’s pre-pandemic employment level won’t fully recover until 2023, although the state’s economic growth will finally start outpacing the nation by late 2021 as it plays catch-up.
  • Two economic forecast scenarios are emerging for California in 2021: 1) business restrictions are removed with dissemination of COVID-19 vaccinations and state GDP (gross domestic product) registers 3.8 to 5 percent growth; or 2) restrictions persist even with widespread vaccinations and higher unemployment drops at a slower-than-hoped-for pace.
  • As of December 2020, California’s job market still employed 1.5 million fewer workers than it did in February.

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