Slow economic recovery predicted in Calif.


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The respected University of California, Los Angeles Anderson Forecast says the budget deficit is so bad it could push the state's unemployment rate from 11 percent to just over 12 percent, compared to the most recent national figure of 9.4 percent.

This recession can be thought of as a one two punch. The economy everywhere is in a slump and in California that is compounded because California relies so heavily on income taxes. So when people lose their jobs, the state takes a beating.

The line at a job fair in San Francisco Tuesday morning says all you need to know about how grim the job market is these days.

"The unemployment rate, which is now at 11 percent, will continue to go up," UCLA economist Jerry Nickelsburg said.

Nickelsburg is the chief economist for UCLA's Anderson Forecast. He says the state's unemployment will peak above 12 percent driven to new highs by cuts the state is making in education, health care, social services and prisons.

"Those cuts are going to result in about 24,000 fewer jobs in California," Nickelsburg said.

In all, 60,000 state workers will be laid off through 2010 and that will slow the state's recovery.

"We're going to grow more slowly than the rest of the U.S. in the initial part that's 2010 and that's principally because of the reduction of state and local government," Nickelsburg said.

Nickelsburg says California is in for a jobless recovery.

At Tuesday morning's job fair the longest line was in front of the Comcast recruiter; that is where Dan Brawner was waiting.

"I've been in accounting management for the last 25 years, I have over 35 years experience," unemployed accountant Dan Brawner said.

But when he got to the front of the line his MBA degree was not going to help.

Brawner says he has filled out several hundred job applications.

"I've had about six interviews in the last nine months," Brawner said.

The only bright spot outlined in the UCLA forecast was in the building industry. Permits for new apartment buildings are up; even single family permits have picked up a little.

Wednesday, a builders' trade show opens at Moscone Center.

"You know talking with some of the builders out there, they are beginning to move some dirt around and put some sticks up, even in spite of where we are today, so it can only be better, it can only get better," HC Muddox sales manager Doug Fitzgerald said.

If the forecast from UCLA is correct California will lag in its recovery next year and the year after.

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