Promising economic report for CA

[Evil Chocula]

Tuesday, March 11, 2008 - 7:42 AM PDT
California economy slowing, but recession seen unlikely


Silicon Valley / San Jose Business Journal

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The California economy is slowing but should avoid slipping into a recession, according to a widely followed quarterly economic forecast Tuesday.
But if it does, the nation will almost surely follow, according to the economists who publish the Anderson Forecast at the University of California at Los Angeles.
That's because the state contributes 13 percent of the country's gross domestic product and has never gone into a recession without the rest of the country doing the same.
"Both statistically and conceptually, today's economy is something new - stinky," economists Ryan Ratcliff and Jerry Nickelsburg wrote.
"Some California indicators look like the beginnings of a minor recession, but both the national situation and the balance of the California economy remain ambiguous," they add in their report.
The ongoing real estate slump isn't enough to push the state into recession by itself, the UCLA economists say. "Real estate weakness will remain a significant drag on the economy, leaving us treading water - but not slipping under the waves into recession."
In some key findings and forecasts in the report:

• Job growth is expected to pick up next year but remain under 2 percent through the third quarter of 2010.
• Five of 11 non-farm employment sectors lost jobs in the fourth quarter with construction hardest hit, with an 11.8 percent drop.
• The number of sectors shedding jobs is expected to grow to eight, with construction again being hardest hit, while education and health services show the biggest gains.
• The state added 104,000 jobs from a year earlier in the fourth quarter, mostly in Los Angeles County and the Bay Area.