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EconoMeter: Will economy improve in 2012?

Panelists give predictions for Dow, jobless rate, GDP on Election Day


Sunday, January 1, 2012

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Kelly Cunningham, National University System
Answer: No

It is difficult to foresee the economy improving much in 2012, as economic problems continue to compound and there is little prospect for government doing much to solve budget problems in an election year. We forecast San Diego’s economy to grow 1.8 percent in 2012, the strongest increase of six years, but continuing tepid improvement. Employment will only reach halfway to full recovery of job numbers, as unemployment remains in mid-9 percent range. Employment gains are nearly matched by increases in labor force numbers. Middle-skilled jobs, once forming the broad-base of the middle class, continue to disappear, as most jobs created are either relatively low-skilled (and low-paid) and not easily replaced by technology or sent offshore, or are highly paid science, engineering and management positions. This is particularly true for high-cost areas such as San Diego where job growth is limited by the state’s onerous taxes and draconian regulatory environment.