UCLA Forecasts Rapid Economic Recovery from Pandemic in California

Patrons pack Blanco Tacos Tequila on the second floor of Fashion Valley on Feb. 6, 2021.
Outdoor patrons pack Blanco Tacos Tequila on the second floor of Fashion Valley. Photo by Chris Stone

The easing of the COVID-19 pandemic and rapid lifting of restrictions on business activity and public gatherings point to a more rapid economic recovery for the state than initially predicted, according to a UCLA Anderson School of Management forecast released Wednesday.

But uncertainties still remain in the lingering effects of the pandemic, along with outside factors such as national immigration policy, according to the report. And while California’s strict restrictions have pushed the state’s unemployment rate higher than the national average, such stringent responses to the pandemic appear to have resulted in better health and economic outcomes than states with looser restrictions.

“The roll out of multiple vaccines as well as the general easing of the number of new cases from the latest peak suggests a reduced economic impact of the pandemic in 2021,” UCLA Anderson Forecast Director Jerry Nickelsburg wrote in his report on the California economy.

“Though California responded, as before, with more restrictive non-pharmaceutical interventions (NPIs) via mask mandates, closures and gathering restrictions than elsewhere in the nation, the current rapid opening of the economy and low infection rates indicate a faster recovery this year than we have previously been forecasting.

“Still there is much that is not fully known,” he wrote. “The potential for domestic out-migration, national immigration policy, the future of work-from-home, and the impact of California’s more stringent NPIs are each important to the growth and prosperity of the state.”