LOS ANGELES AND SACRAMENTO — California's unemployment rate soared to a 14-year high in October, hitting 8.2%, and economists predicted that it could rise substantially over the next year and a half.
The state's economy shed 26,400 people from its payroll last month, raising the total number of lost jobs to 101,300 since October 2007, the California Employment Development Department reported Friday.
And the situation is about to get worse, predicted Ross DeVol, director of regional economics at the Santa Monica-based Milken Institute. The unemployment rate is seen reaching 9.9% in the first quarter of 2010, with the loss of 360,000 more jobs before then.
The hemorrhaging of jobs is "another indication that the state is plunging into what is likely to be a long and deep recession," said Stephen Levy, chief economist and director of the Center for the Continuing Study of the California Economy in Palo Alto.
The 0.5-percentage-point jump in the state's unemployment rate, from 7.7% in September, was even larger than the recently posted increase in the national rate, up 0.4 of a percentage point to 6.5%. The state's rate ranks third in the U.S., exceeded only by those of Michigan and Rhode Island, at 9.3% each.
Joblessness increased throughout Southern California in October. It reached 8.4% in Los Angeles County, 9.5% in the Inland Empire, 6% in Orange County and 7.2% in Ventura County.
"A financial market crisis, the loss of wealth for consumers and the growing worldwide recession are feeding on themselves as consumers and businesses grow scared and cautious," Levy said.
The upshot, he warned, is "a continuing decline in consumer spending" that is threatening to make the holiday shopping season less than jolly for retailers.
The drop in spending has flattened seasonal hiring of salespeople and pushed retail employment into negative territory along with housing, construction, finance and some types of manufacturing, said Jerry Nickelsburg, a senior economist with the UCLA Anderson Forecast who specializes in California and L.A.
"This is a consumption-driven downturn," he said.
Growing joblessness, combined with the fear of becoming unemployed, is turning normally free-spending consumers into penny pinchers.
Sahar Sedadi, 36, of San Pedro, laid off a year ago as a nonprofit organization executive, has depleted her savings account, maxed out her credit cards and gone without medical insurance.
