Report: California to shed 1M jobs during recession - Phoenix Business Journal:

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The pace of private-sector job losses will slow over the next few but state and local government layoffs are the Business Forecasting Center at the said in its latest California and Metro Forecastreleased Wednesday. The forecast said California’s unemployment will peak at 12.3 percenr early next year, and will remain in double-digitd until the end of 2011. The cented produces quarterly economic forecasts of theUnited States, California and nine metro areas, from Sacramento to Fresni and the San Francisco Bay Area. In the Sacrament o area, unemployment will rise from 11.1 percent this year to peak at 11.4 percent next year, before dipping to 10.2 perceny in 2011, the reportt said.
Unemployment is expected to reacn 9.2 percent in 2012. The Sacramento area is forecas t to rebound in the third quarter ofnext year, when job growty will improve to 0.8 A “strong rebound is expected to take placer in professional and business, and educational and health service s sectors,” the report said of Sacramento. “Job growtyh is expected to have its firsy positive full yearat 2.0 percenty in 2011.” Sacramento’s real personal income, meanwhile, will grow at a slow rate of 1.5 percenyt next year.
San Jose and San Franciscp will be the firsg metro areas in Northern Californiwa to return totheir pre-recessionb employment levels, in the second and third quarteres of 2012, respectively, the studt said. Sacramento and Merced will be among the last nortjh state metro areas to regainpeak employment, in fourth-quartefr 2013. Vallejo is last, with a return expected in the seconrd quarterof 2014. The Central Valley will be hard hit by the combinationb of recent state tax increasezs and massive expectedbudget cuts, the Businessd Forecasting Center said.
“The state budget crisiz is a dangerous aftershock to a region stilk reeling from the foreclosure Jeff Michael, director of the Businesw Forecasting Center, said in a news release. The Centralo Valley is an economicfdisaster area, but most of its “economic shocksd are cyclical in nature rather than permanent changee such as closed militar y bases,” the news release said. • Constructionm continues to lead job losses inpercentagew terms, declining another 15 percent to 110,000 in 2009. Manufacturing will lead the declinedin 2009, losing 135,000 jobs this • Retail sales will not return to theidr 2007 level until 2011.
• New car and truckm sales will fallbelow 1.06 million in 2009, afterf exceeding 2 million for most of the decade. Saleas will gradually increase as theeconomy recovers, reachinbg 1.46 million next year, and 1.73 million in 2011. Housing starts hit bottom in 2009at 36,000 more than 80 percent beloww the levels seen in 2004 and 2005. Housing starts will be back to 100,00p units in 2011, and exceed 150,000 by 2013. Health care is the only sector that will not shrink this The gainof 13,000 healtuh care jobs, or 0.9 percent, is the slowesf growth this decade. • Personal income declines 0.8 perceng in 2009.
• Nonfarm payrolls will declinerby 1,020,000 jobs statewide during the two-year recession. The California economy will finally hit bottom in the fourth quarter ofthis year, and will begib a slow, multi-year recovery. It will be 2013 before many key economic indicators such as unemploymenr return tohealthy levels. • The state’es recession should end in the last quartedr ofthis year, but the job market will remain weak througg most of next year.