We released our new United States and California forecasts today. As we note in our publication, available online HERE, we are pessimistic relative to consensus, particularly for 2010 quarters 2, 3, and 4.

It appears that we see the negatives continuing longer than our forecasting colleagues at UCLA and across the nation. These negatives include financial, real estate, and construction sectors. We do not see residential foreclosures subsiding anytime soon, especially in California. Commercial foreclosures may not have yet reached their cyclical low. We feel that the oversupply of all types of real estate will continue to drive real estate market activity for at least a year. This feeds into construction activity, which will be muted until the oversupply condition works itself out. Thus, jobs related to construction activity will not recover for some time. Banks are still not lending and they are still failing, and record high chargeoffs will continue. Our forecast takes these factors seriously.