San Diego Economic Forecast Predicts Muddled Year Ahead
Friday, December 16, 2011
Aired 12/16/11 on KPBS News.
A new forecast finds San Diego's economic picture will brighten a bit next year, but the National University System report doesn't expect a full-blown recovery.
SAN DIEGO The Institute for Policy Research report says the economy will grow about 1.8 percent next year. That's the best growth projection in six years. San Diego has regained about half the jobs lost during the great recession, according to Institute economist Kelly Cunningham, and job gains will continue next year, but not enough to bring the jobless rate down. The region is dealing with familiar problems.
"Consumers are still highly indebted. The housing market still is having problems," said Cunningham.
The Institute's report expects consumer spending to jump about 5 percent. That's an improvement, but not enough to be considered an economic recovery.
"That's partly because consumers are still heavily in debt, and we're now seeing inflation starting to creep up," said Cunningham. "We're seeing it at about 3 percent now. We're spending so much on gas prices, energy prices, commodity prices and food."
Cunningham said military cutbacks could also slow growth in the economy in the coming year.