The UCLA Anderson School of Management predict California’s unemployment will top out in December of 2009 at 12.7%. The forecast for the future remains relatively bleak: unemployment will not dip below 10% until 2012. Beacon Economics expects this to come in the second quarter of 2012. (For more information on the previous UCLA Anderson forecast, see the March 2009 first tuesday blog article The long road out of the recession.)
Forecasters look for future job growth in the healthcare, education, tech and renewable energy fields to pick up the slack of the negative growth, especially the struggling real estate, government and manufacturing industries.
first tuesday take: Over-construction, flush real estate prices and the supposed economic prosperity of the early 2000s certainly helped buoy a large proportion of California’s employment. We’re now in a rather stark correction of that wayward period.
The bright side: unemployment is a lagging indicator of economic distress. If we are seeing a bottoming out of job loss, the economy is most likely in a recovery period. Of course, it won’t be an easy recovery, but the massive panic and failures of the early financial crisis are over.
For brokers and agents, slow job growth means that there will be a relative dearth of buyers. This in turn will create desperate lenders with an excess of REO inventory of all types of property and a sluggish market, with only a few small blips of high activity attributable to temporary tax credits and other fleeting incentives.
California has a uniquely entrepreneurial spirit and will rally again, but it will take time.
Re: California’s jobless rate is peaking, experts say from the Los Angeles Times