Economic activity is increasing across a number of important sectors in California, according to the latest UCLA Anderson Forecast for California. The outlook for an expansion of the workforce shows momentum building into 2012, according to economic models presented by UCLA Professor and Senior Economist Jerry Nickelsburg. He suggested that statewide unemployment would drop to 11.4% by the end of this year and 10.3% in 2012. It is presently, 12.4% “The forecast also suggested that the unemployment rate for some of the hi-tech driven coastal communities could fall as low as 8.5% next year, and to 7.4 percent in 2012.” Professor Nickelsburg reported that job creation has been positive, especially in coastal California, for much of the calendar year, while inland communities are still under high unemployment pressure. However, job creation still remains below levels expected in a well-functioning job market. Even with a large deficit, looming record pension debt, and high unemployment, “California is economically much better off than the 10 most populous states – maybe even Texas,” Nickelsburg also indicated that the data does not support the mass exodus of businesses to other states outside California, which is suggested may be a myth.

The UCLA Anderson Forecast for the third quarter of 2009 has just been released, and says that while this huge recession may have ended, unemployment will stay in double digits and the “negative impact of the downturn will last well into the next decade”. Unemployment going to get worse and is expected to rise to 12.7 percent in the fourth quarter of 2009. Though the economy will be growing in 2011, it will not be generating enough jobs to drive the unemployment rate below double digits until 2012. Economist Jerry Nickelsburg called the unemployment situation “ugly” and will remain so for some time to come. “More rapid growth than can be expected over the next twelve months would be required to bring the unemployment rate down,” he said.

There is one possible silver lining in all these dark clouds, however – exports may be improving. According to Nickelsburg, “In trade and manufacturing, there is new evidence that demand for California-produced goods is increasing. He believes that the keys to the California recovery are exports of manufactured and agricultural goods, a recovery in U.S., increased public works construction and increased investment in business equipment and software.