This report was truly dismal. California's unemployment rate ticked up .1%, but most importantly private payrolls actually declined by 25,000! That is not supposed to happen when you are supposedly a full year into a recovery. Including government, total payroll jobs declined by 33,500. Private sector job growth has been pathetic recently, but it has not been negative. Truly awful. And it is a broad based malaise that spans virtually all sectors and all metro areas. The state has now given back all of the modest job growth posted in the first half of the year. Even the areas like Orange County and San Jose that were showing life in the first half of the year have lost their momentum. The story is virtually the same everywhere, the private sector has been moving sideways at best for nearly a year, and now public sector employment is eroding.
I am not in the double-dip camp yet. I would estimate the probability for the U.S. to sink back into recession is 20-25%, but for California it could be 50%.