New Forecast Indicates Slowdown of Growth in GDP and Personal Income throughout California, LA.
LAEDC Releases Annual Economic Forecast Report
February 23, 2023 – LOS ANGELES – Today, the Los Angeles County Economic Development Corporation (LAEDC) released its 2023 Economic Forecast Report at its annual event in Downtown Los Angeles. As the national, state and local economies move beyond recovering from the damage caused by the COVID-19 pandemic, we face more uncertainty. This time due to high inflation and aggressive national monetary policies intended to control it.
Rapidly rising prices for goods and services in 2022 – inflation unseen since the 1970s and early 1980s – were met with sudden and sharp rate hikes by the Federal Reserve, the most dramatic seen in decades. This has created real concerns that a policy overcorrection may lead us into a recession, which would create its own problems in terms of business closures, job losses and reductions in household income and tax revenue. Today we find ourselves at a critical juncture, where the Federal Reserve must skillfully plan and execute a soft landing for the economy to control inflation while avoiding a significant slowdown or even reversal in our recovery.
“With continued economic uncertainty on the horizon, we know there is a need for those engaged in economic development to construct more resilient, industrially diverse and inclusive economic systems to provide defense against uncertain futures,” said Stephen Cheung, President and CEO of LAEDC. “It is essential that organizations advocate for economic security, assist those most vulnerable to economic shocks and connect more of our region’s residents to the industrial drivers of our economy.”
“Small businesses in particular, which have spent the last two years rebounding from the economic dislocations caused by the COVID-19 pandemic, are very exposed to the impacts of inflation and a potential recession,” said Shannon Sedgwick, Director of LAEDC’s Institute for Applied Economics and lead author of the report. “These businesses will need support through the difficult economic headwinds. “
While the risk of a national economic downturn persists, there is optimism around investments from the federal and state governments. It is estimated that California will receive $41.9 billion as well as additional grants as part of the Bipartisan Infrastructure Deal during the next five years. It’s estimated that $3.25 billion already invested in California has already generated 42,300 jobs to date.
Despite the uncertainties, LAEDC expects that California will likely see only a slowdown in the growth of Real GDP and Real Personal Income, thereby hanging onto gains made since 2021. Real GDP and Real Personal Income for Los Angeles County are expected to flatline over 2023, with a rebound occurring in 2024.
LAEDC’s annual Economic Forecast is a highly anticipated and publicly visible event that offers a valuable look ahead at national, state and local economic projections, all with global implications. This year Amazon was the presenting sponsor.
“Amazon is proud to be the presenting sponsor for this year’s Economic Forecast. We value the actionable insights that LAEDC’s Economic Forecast skilled research and economic development analysis provides to business leaders in and around Los Angeles,” said Ron Frierson, Director of Economic Development, U.S. West Region at Amazon. Frierson joined LAEDC’s Executive Committee in December 2022 and joins 79 other regional leaders and change-makers that support equitable economic growth. “I wanted to be part of this event and join the LAEDC board to support economic development and equitable opportunity in the region.”
Learn more and read the full report at https://laedc.org/economicforecast2023/