Economists at Beacon expect to see "sustained" job growth in the state in the second quarter of 2010. The unemployment rate will peak this year at 12.4%, they said, and it will remain around 10% for two years. Home prices have bottomed and probably won't inflate wildly again as they did during the real estate bubble.
Although California was hit harder than the rest of the nation because of its dependence on trade and tourism, the nation's rebound will help the state, Thornberg said.
The innovative bent of California entrepreneurs also will help power the state's recovery, said Dana Johnson, senior vice president and chief economist at Comerica Bank. Comerica on Tuesday released its monthly California economic activity index, which held steady in October after increasing for six consecutive months.
Healthcare and high-tech companies are already generating new jobs, Johnson said, and demand from outside California will help the state's recovery. That means that although Californians may be feeling pain now, it will subside eventually.
"It's very clear to me that a national and global recovery is underway," he said. "As a result, the environment in California will continue to improve."