The report was issued by researchers at the university's Anderson School of Business, which has established a reputation for being among the most accurate forecasting groups in the country. The study also marks the first time a major forecast group has said California's power crisis will indeed push the entire US into recession.
"We still expect sluggish growth through the rest of the year and two quarters of negative growth commencing no later than (the first quarter) of 2002," says Edward E. Leamer, the economist who leads the forecasting team. "Although the interest- and tax-rate cuts may help the train move faster, there is no light at the end of the tunnel."
The soaring cost and uncertain supply of power in California are already causing many firms to delay expansion projects, which has slowed growth here and is having a ripple effect across the US, the UCLA report says. Troubles have been compounded by the problems facing dot-coms and the tens of thousands of jobs those companies have eliminated.
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