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The Highlights of the California outlook are below. It has not changed much over the past year. I'll discuss the metro areas tomorrow when the EDD releases new data tomorrow - yes, tomorrow is unemployment Friday!
Highlights of the July 2010 California Forecast
• California remains in the sluggish, early stages of a long, slow five year recovery.
• California unemployment peaked at 12.6% in the first quarter of 2010, and will remain at or above 12% through the end of 2010, and above 10% through all of 2011.
• Payroll jobs bottomed out this winter nearly 1.35 million jobs below their 15.2 million job peak in Summer 2007. Although California will add 250,000 jobs over the next 12 months, this is less than one-fifth the total lost. Jobs will not recover their pre-recession peak until the 1st quarter of 2015.
• After 7.5 years of zero net job growth from 2007 through 2014, the state’s population will have grown by over 2.4 million people, keeping unemployment above 8% through most of 2014.
• Growth in real gross state product will average a modest 3.1% over the next four years.
• Construction has lost 390,000 jobs, by far the most battered sector through the recession, and will lose another 10,000 jobs by year-end. This cyclical sector will eventually bounce back, and should experience almost 11% job growth during 2012 and 2013.
• With the NUMMI closure in the past, manufacturing is growing again. Next year could bring the first annual increase in California manufacturing employment in a decade.
• Retail jobs have bottomed out after declining more than 10%, and are projected to rebound by 47,000 jobs (3%) over the next 12 to 18 months.
• Professional and Scientific Service jobs are projected to increase by 55,000 (5.5%) over the next year after a steep decline in 2009.
• State and local governments, including public schools, will drive most remaining job loss and shed 36,000 jobs over the next year.
• Housing starts bottomed in 2009 at a record low 36,000 units. Although housing starts will recover to 45,000 units in 2010, this is still the 2nd lowest level in 50 years. By 2014, housing starts will be back to normal levels exceeding 150,000 units as foreclosures finally ebb and existing home prices recover to close the gap with construction costs.
• Retail sales are growing again, but will not recover their 2007 level until 2011.