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US economy continues slow, but outlook for California bright: report

DESPITE the strong second quarter growth rate, the US economy is moving at a slow pace it has been for the past two years, according to an economic forecast by Beacon Economics.

US economy continues slow, but outlook for California bright: report
24 August 2014 - 19:59

US economy continues slow, but outlook for California bright: report

DESPITE the strong second quarter growth rate, the US economy is moving at a slow pace it has been for the past two years, according to an economic forecast by Beacon Economics.

Nonetheless, the outlook remains bright, with 2015 expected to have the strongest growth since the very start of the recovery. 

California leads the pack with every key economic indicator from GDP to employment to personal income in growth mode-trends are expected to continue their upward climbs over the next two years. 

According to the new forecast, the US economy is expected to grow at slightly more than three per cent over the next two quarters, less than the four per cent estimated growth in the second quarter.

"The second quarter numbers have been a relief for Democrats rather than a negative one for Republicans," says Beacon Economics founding partner and one of the forecast's lead authors, Christopher Thornberg.

"However, although the second quarter did make a decent showing, it wasn't enough to make up for weakness seen earlier in the year. Overall growth for 2014 will be slower than last year," he said.

The forecast has 2014 growth averaging 2.2 per cent per quarter compared to three per cent last year. "The culprit is trade deficit as there was more demand for imports and less demand for US exports," said Mr Thornberg. Expect annual growth in 2015 to average three to 3.5 per cent, the strongest showing since the initial quarters of the recovery. The improvement will be driven by construction and better global growth, he said.

On the other hand, California's economy will continue to steadily and consistently improve throughout the life of the state forecast in 2019, according to the analysis.

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