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Source: Market Watch
Date: 10/27/2008
Authors: Hilary Rehder

News Bite

UCLA Anderson Forecast: Gloomy Outlook for Orange County Economy

The economic outlook for California and Orange County has become more pessimistic over the last few weeks according to the latest UCLA Anderson Forecast for Orange County. The Forecast projects the U.S. and state economies will move in tandem over the next few years, with income and employment deteriorating further before the housing market hits bottom.

"Our forecast for slow growth in the 4th quarter was dependent upon consumer demand holding up. The consumer is now uncertain about the effect of current economic policy and is pulling back. Consequently, economic growth projected for the current quarter in California is not going to occur," said Jerry Nickelsburg, senior economist, UCLA Anderson Forecast, who authored the California Report. "Moreover, the shrinkage in the mortgage finance market in Orange County creates a deep hole in Orange County employment, and history tells us it will be a five to six year process to fill it in with new jobs."

"The real estate sector begins its recovery next year as home sales pick up beginning in the second quarter of 2009 and home prices stabilize in the summer," the Forecast says.

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