Despite the sluggish pace of recovery, Beacon Economics analysts Chris Thornberg and Brad Kemp said key economic indicators show the economic situation is improving, just not as rapidly as people would like.
The economists presented their forecast Thursday morning at the Riverside Convention Center. The School of Business Administration at UC Riverside hosted the event.
Thornberg and Kemp's predictions of gradual recovery include forecasts that the Inland Empire's employment situation will improve - slowly - over the next two years.
Nonfarm employment has grown from July through September in San Bernardino and Riverside counties, Kemp said, signalling an upward trend in the labor markets.
"While it's lagging we can clearly see a trend shift," Kemp said.
The Inland Empire added roughly 1,100 nonfarm jobs in September.
Beacon Economics also predicts a slow increase in taxable sales and home prices over the next few years, but cautioned that people should not expect a rush to the frenzied home markets of the mid-2000s.
"If you're expecting your 2007 home price to come back, you're chasing your invisible child," said Kemp, Beacon's director of regional research.
On the subject of home prices, Beacon predicts median prices in San Bernardino and
The prospect of modest price increases may not console homeowners saddled with mortgage debt after buying at the peak of the last decade's housing boom.
But Thornberg often says - as he did Thursday - that California's expensive homes and apartments put the state at a competitive disadvantage, making it harder for companies to attract out-of-state hires and limiting current households' abilities to pay for goods and services.
"You need to stop thinking of higher home prices," Thornberg said. "You should want them to go down."
Thornberg, one of Beacon's founding partners, acquired something of a doomsayer's reputation in the early months of the post-2007 housing downturn and the deep recession that followed.
Predicting a long, slow recovery when other analysts hoped for a soft landing, Thornberg is now more optimistic than other voices fearing a second recession, perhaps as the result of the chain reaction from the Greek government's failure to pay its debts.
But Thornberg insisted Thursday that those fears are misplaced.
If the Greek or other European governments are indeed unable to make good on their debt obligations, Thornberg said he is sure the French and German governments will intervene to stem a banking crisis in their own countries that could spread across the Atlantic.
And unlike the case of Lehman Bros., the investment bank that shocked the markets by collapsing in 2008, no one will be surprised if Athens goes bust, Thornberg said.
Thornberg also said that in the short term, he is more concerned that the U.S. government might give preference to tackling the national debt over supporting economic recovery.
Although the debt needs to be reduced over the long term, he said, he would prefer to see the federal government support the economy through infrastructure investments and tax credits for business investments.
"If you want a double-dip recession, not raising the (national) debt ceiling is the easiest way to do it," he said.