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Associate Professor Chris Schwarz and Dr. Richard Afable, lecturer at the UCI Paul Merage School of Business, offered up their predictions on the economy and the pandemic at the 2021 Economic Forecast presented by the Newport Beach Chamber of Commerce. Schwarz serves as the faculty director of the Merage School’s Center for Investment and Wealth Management and Afable is the former President & CEO of St. Joseph Hoag Health and executive vice president of Providence St. Joseph Health Southern California Region. The forecast was moderated by president and CEO of the Newport Beach Chamber of Commerce Steve Rosansky. 

1. Economy will show positive growth in 2021…

But according to Schwarz, this growth will be less than 4%, as unemployment will be slow to improve and some of the economic damage of 2020 will be permanent. We will likely begin to see some of the industries hardest hit by the pandemic begin to recover as testing improves and we get closer to a vaccine.

2. …Barring election chaos or a deepening of the public health crisis.

He defines election chaos as a contested election or one without a defined winner. He says: “There’s not much correlation between the party in office and how stocks do…In the short term, as long as somebody clearly wins, that’s good for the market.”

3. We are not in a housing bubble (or any other bubble)

Schwarz demonstrated that U.S. bonds, stocks, real estate and even baseball card prices are sitting at an all-time high. However, he argues that these assets are valued correctly and therefore there is no bubble. For those predicting a crash of the U.S. dollar—Schwarz also disagrees.

4. The pandemic will continue to wax and wane

Afable described the current tests and therapies available for Covid-19 and predicted the distribution of various vaccines in mid-2021. His advice? Stop waiting for the world to go back to normal. “Stop waiting and continue adapting. That’s the way you work and succeed in this new reality,” he explained. Afable predicted 60% to 70% herd immunity in mid-2022.

The entire 2021 forecast can be found here.

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