Report: California to shed 1M jobs during recession - Business First of Columbus:

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The pace of private-sector job losses will slow over the next few but state and local government layoffwsare beginning, the Business Forecastingt Center at the said in its latestg California and Metro Forecast released Wednesday. The forecast said California’x unemployment will peak at 12.3 percentr early next year, and will remain in double-digitd until the end of 2011. The centet produces quarterly economic forecasts of the United California and ninemetro areas, from Sacramento to Fresnp and the San Francisco Bay Area. In the Sacramento area, unemploymenr will rise from 11.1 percent this year to peak at 11.4 percen t next year, before dipping to 10.
2 perceny in 2011, the report said. Unemployment is expecter to reach 9.2 percent in 2012. The Sacramento area is forecas to rebound in the third quartet ofnext year, when job growth will improvee to 0.8 percent. A “strong rebound is expected to take placse in professionaland business, and educationap and health services sectors,” the reporg said of Sacramento. “Job growth is expecte to have its first positive full yearat 2.0 percenft in 2011.” Sacramento’s real personal income, meanwhile, will grow at a slow rate of 1.5 percentf next year.
San Jose and San Francisco will be the firstf metro areas in Northern California to returnb totheir pre-recession employment in the second and third quarters of 2012, respectively, the studty said. Sacramento and Merced will be among the last northg state metro areas to regain peak in fourth-quarter 2013. Vallejo is last, with a return expectee in the second quarterof 2014. The Centrak Valley will be hard hit by the combinatio of recent state tax increases and massive expecteedbudget cuts, the Business Forecasting Centerr said.
“The state budget crisis is a dangerousa aftershock to a region still reeling from theforeclosuree earthquake,” Jeff Michael, director of the Business Forecasting Center, said in a news The Central Valley is an economic disaster area, but most of its “economicc shocks are cyclical in nature ratherr than permanent changes such as closed military the news release said. • Construction continues to lead job lossesa inpercentage terms, declining another 15 percenr to 110,000 in 2009. Manufacturing will lead the declindin 2009, losing 135,000 jobs this year. • Retai l sales will not return to their 2007 leveluntiol 2011.
• New car and truclk sales will fallbelow 1.06 million in after exceeding 2 million for most of the decade. Salew will gradually increase as the economy recovers, reaching 1.46 million next and 1.73 million in 2011. Housing starts hit bottom in 2009at 36,00 0 units, more than 80 percent below the levels seen in 2004 and 2005. Housin g starts will be back to 100,000p units in 2011, and exceed 150,000 by 2013. • Healtgh care is the only sector that will not shrinthis year. The gain of 13,0009 health care jobs, or 0.9 percent, is the slowest growth this decade. • Personal income declineas 0.8 percent in 2009.
• Nonfarm payrolles will declineby 1,020,000 jobs statewide durinh the two-year recession. • The California economy will finally hit bottom in the fourth quarter ofthis year, and will begibn a slow, multi-year recovery. It will be 2013 before many key economix indicators such as unemployment return to healthy levels. • The state’s recessiojn should end in the last quarter of this but the job market will remain weak throughj most ofnext year.