California’s Unemployment Rate Predicted to Soar Even Higher
According to the forecasts released by UCLA and UC Santa Barbara, California’s unemployment rate will soar between 12% and 15% by next spring, and remain in the double digits until at least the beginning of 2012.
The UCLA forecast projected the jobless rate will average 11.3% this summer, and hit a peak of 11.9% in the spring of 2010. UCLA also predicts unemployment will average 11.7% in 2010 and 10.8% in 2011.
UCLA’s projections (although depressing) are much more optimistic then UCSB. The UCSB economists predict unemployment peaking at 14.7% at the start of 2010, and remaining above 13% until at least 2011.
Both universities economist believe the job market will worsen despite Obama’s $787 billion national stimulus package. David Shulman from UCLA believes the stimulus package may be too small compared to the $14.5 trillion in wealth Americans have lost ($9 trillion in the stock market and $5.5 trillion in home values).
Both universities believe that retail spending will also continue to decline through at least the first half of 2010.
UCSB projects income declining through the end of 2010 and will be 7% lower by the 4th quarter of 2009 then it was in 2008. UCLA however only predicts a decline of 1.2%. Regardless, both predict it to drop.
UCSB project that home prices will experience double-digit declines in 2009 and 2010, while UCLA believes the downturn in construction of new homes will eventually lead to a shortage that could help stabilize the market by as early as the end of this year.
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Source:
Dean Calbreath – Union-Tribune Staff Writer
State’s jobless rate forecast to pass 12%
Posted: March 25, 2009 2:00 a.m.
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