The California jobs picture remains discouraging. Data released on Friday showed that the unemployment rate for December remained at 12.4%, hovering around this same level for about five months. But nearly 40,000 jobs were lost last month, bringing California’s overall employment to a level not seen in more than a decade. California has shed more than a million jobs since the beginning of the recession, losing nearly seven percent of its employment base.
Job losses for this recession are still outpacing the last two California downturns, and we probably have not yet hit bottom. We’re two years into this recession: recovery from the 1991 defense realignment recession didn’t begin until the 34th month; job losses from the 1990 recession after the tech bubble didn’t bottom out until 28 months into the downturn.
If you assume a “U-shaped” recession, with recovery (optimistically) beginning at about the 32nd month, then we won’t be back at our pre-recession levels of employment until at least the Spring of 2013. If the bottom is toward the end of this year, then full recovery to our 2007 level of jobs won’t occur until 2014, during which time California’s population will have increased by more than two million persons.
Recent economic forecasts for California support this view – or are more pessimistic.
The UC Santa Barbara forecast sees continuing job losses and declining real GDP into the first quarter of 2011. The UCLA Anderson forecast sees no net new job creation in 2010, remarking that “the economy will begin to pick up slightly in the beginning of 2011, and by the middle of 2011, will begin to grow at more normal levels.” The University of the Pacific forecast