Region's Economic Outlook

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Gloomy Indicators Don't Dampen Experts' Forecast

By Art Garcia

A budget-busting expensive war, hurricanes costing billions for recovery, an overhanging federal de?cit of around $400 billion, company employee lay-offs in the tens of thousands, pension promises fading, housing sales in low gear, fears of in?ation….
     All are elements potentially contributing to a dark cloud over the 2006 economy for the nation, the state and the Sacramento Metro Market. 
     Yet a Prosper survey of some of the leading economists in the region turns up mostly positive forecasts for the year ahead. Even the most reserved are cautiously optimistic, which is a plus, given the apparent gloomy prospects for the overall key economic indicators such as the consumer price index, GNP, unemployment numbers, rate of inflation and the money supply.
     “I’m very optimistic, quite optimistic,” is how Professor of Wine Studies and Dean Emeritus Robert Smiley at the University of California, Davis Graduate School of Management describes his 2006 outlook for the metro region.
     “The most important factor for us in 2006 is the condition of the rest of the 49 states, who are our major trading partners, and their condition is quite excel-lent,” he says. “The nation’s economy is looking very healthy, with a Federal Reserve Board that is pay-ing attention and keeping in? ation in check. Interest rates remain at near historic lows.
     “So the national economy is doing very well, and that’s the most im-portant factor for California and the Sacramento region,” Smiley says. 
Continued...

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