UCSB Economist shares Economic Forecast at State of the County event
SANTA BARBARA, Calif.-On a gloomy day in Santa Barbara people packed a ballroom at the Hilton Santa Barbara Beachfront to hear a not so gloomy State of County economic forecast.
The Santa Barbara South Coast Chamber of Commerce hosted the event and invited Santa Barbara Economic Forecast Project Director Peter Rupert to speak.
Rupert shared an optimistic forecast before a room full of community and business leaders.
"Are we in a recession?, The evidence says nope, that means no." said Rupert.
He said consumers have been resilient and the labor market is incredibly strong.
He said there are more jobs out there than there are unemployed people for the first time in history.
"You want a job just go get it," said Rupert.
He said he is seeing a lot of people are changing jobs for the better.
He blamed the media on the the reason people think we are in a recession.
He said many falsely believe it means a decline in Gross National Product two quarters in a row.
Rupert said that is wrong, adding there is no definition of recession.
He said the National Bureau of Economic Research decides when there is a recession.
He described the bureau as a bunch of people sitting around like those in the ballroom discussing the economy six months prior to the meeting.
"Inflation is a general rise in prices, not a rise in a couple prices," said Rupert.
Personal consumption expenditures such as the price of apples are considered.
One damper on the forecast has to do with wages. Rupert said wages have lost their buying power yearly due to inflation and that the fed is trying to do something about that.
He said the target goal is to keep it near 2 percent.
During the pandemic he said the United States saw G.D.P. fall 30 percent, the largest ever, but Rupert said that wasn't because of the people.
He called it a government made "synthetic recession."
Although the first and second quarters of the year show a consecutive decline, during the third quarter the economic numbers are going up.
He said false reports of recession lead to less consumer spending.
Rupert said employment numbers come out next Friday and when they do economists will be looking closely at them.
In Santa Barbara he said employment numbers are back to where they were pre-pandemic.
In Santa Barbara County leisure and hospitality figures are up, but retail employment is down.
"Here retail employment has been said falling since 2000 in Santa Barbara County while leisure and hospitality has taken off," said Rupert.
However he said he was astounded to see nearby Ventura's retail employment higher than Santa Barbara.
Local tourism is strong.
He said that helped the Santa Barbara Airport see record volume last week.
Hotels were down one percent from last year with the average daily rates up 53 percent when compared to before the pandemic.
He said the volume is fantastic even though Thanksgiving numbers were not as strong at hotels.
Perhaps people were staying with family or out of the area.
He also said real estate prices going up 15 to percent are not sustainable and that is why they are likely to fall.
Mortgage rates have been increasing.
"The U.S. and Santa Barbara remain very strong," said Rupert, "Are we in a recession, My answer is no ."
And if we are not in a recession he said it was ridiculous to think we are heading toward a recession.
When he ran out of time he invited people to send him his questions at peter.rupert@ucsb.edu.
