Economists are predicting the California unemployment rate will hit nearly 12% this year and to stay there for the majority of 2010.
According to UCLA’s Anderson Forecast, the unemployment rate will average 11% this year and increase to 11.7% next year.
With the collapse in consumer demand and the huge job losses (280,000 in January alone), both taxable sales and personal incomes have declined, making economic recovery something we won’t see the glimmers of here in California until at least 2011. Even then, don’t expect to see the unemployment rate drop below 10% until 2012.
first tuesday take: This article from The Mercury News is forward- looking regarding the economics of California’s real estate sales and rental markets. For the reader who properly believes that it is better to look ahead for guidance than back at numbers we know and feel certain about, it still tells us little about tomorrow’s action.
Without a job, even the most willing of homebuyers won’t be ready and able to take on a mortgage, regardless of how low the mortgage rates are or how lucrative the tax credit incentives the federal and state governments are using as political carrots (mostly feel-good stuff). Without sufficient (financially ready and able job-holder) demand, don’t expect to see a permanent jump in housing starts or sales here in California, regardless of what goes on in the rest of the nation until, that is, the job losses peak, diminish, and end, and growth in the number of Californians employed takes hold – probably in 2012 at the very earliest. (See “The Economic Restructuring of Real Estate”, “Home sales volume and price peaks”, and “Housing starts exceed expectations”)
Re: “State’s economy to see longer recession” from The Mercury News
