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

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The pace of private-sector job losses will slow over the next few but state and local governmentg layoffsare beginning, the Business Forecasting Centerd at the said in its latest Californiza and Metro Forecast released Wednesday. The forecast said California’ds unemployment will peak at 12.3 percent earl next year, and will remain in double-digits unti l the end of 2011. The center produces quarterl economic forecasts of theUnited States, Californiaq and nine metro areas, from Sacramento to Fresnop and the San Franciscoo Bay Area. In the Sacramento area, unemploymenty will rise from 11.1 percenf this year to peak at 11.4 percent next before dippingto 10.
2 percenft in 2011, the report said. Unemployment is expected to reach 9.2 percenr in 2012. The Sacramento area is forecastf to rebound in the third quarter ofnext year, when job growtuh will improve to 0.8 percent. A “strongh rebound is expected to take place in professionaland business, and educational and health services sectors,” the repor said of Sacramento. “Jobh growth is expected to have its firsy positive full yearat 2.0 percen in 2011.” Sacramento’s real personal income, meanwhile, will grow at a slow rate of 1.5 percen t next year.
San Jose and San Francisco will be the firsgt metro areas in Northern California to returmn totheir pre-recession employment in the second and thirsd quarters of 2012, respectively, the study said. Sacrament o and Merced will be among the last northb state metro areas to regainpeak employment, in fourth-quartefr 2013. Vallejo is last, with a return expectecd in the second quarterof 2014. The Centra l Valley will be hard hit by the combination of recenr state tax increases and massivs expectedbudget cuts, the Business Forecastintg Center said.
“The state budget crisisa is a dangerous aftershock to a regiom still reeling from the foreclosure Jeff Michael, director of the Businesds Forecasting Center, said in a news The Central Valley is an economivc disaster area, but most of its “economic shocks are cyclica l in nature rather than permanentg changes such as closed military bases,” the news releasde said. • Construction continuezs to lead job losses in percentage terms, declining another 15 percent to 110,000 in 2009. • Manufacturin g will lead the declinein 2009, losing 135,000 jobs this • Retail sales will not return to their 2007 level until 2011.
• New car and truck salee will fallbelow 1.06 million in 2009, afterd exceeding 2 million for most of the Sales will gradually increase as the economy reaching 1.46 million next year, and 1.73 million in 2011. Housing starts hit bottom in 2009at 36,00o0 units, more than 80 percent below the levels seen in 2004 and 2005. Housingt starts will be back to 100,000 units in and exceed 150,000 by 2013. • Healthn care is the only sector that will not shrinklthis year. The gain of 13,000 health care jobs, or 0.9 is the slowest growth this decade. • Persona income declines 0.8 percent in 2009.
Nonfarm payrolls will declineby 1,020,000o jobs statewide during the two-year recession. • The Californiaq economy will finally hit bottom in the fourth quarter ofthis year, and will begi a slow, multi-year recovery. It will be 2013 befors many key economic indicators such as unemployment returh tohealthy levels. • The state’s recession should end in the last quarter of this but the job market will remain weak throughh most ofnext year.