Unemployment in California and Los Angeles County will increase well into 2010, continuing to exceed the highest levels since at least the end of World War II, according to a local economist whose projections for the Southland economy are among the most negative to date.
Continued sluggishness in key industries such as construction, retail, international trade and hospitality will keep the state from a full recovery until 2011, said the report, released by the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp.
Personal income will drop 2% in the state this year, the report said, the first annual decline since 1938.
"Most people haven't experienced anything like this in their lifetimes," said Jack Kyser, founding economist of the Kyser Center.
California's jobless rate, which was 11.6% in June, will average 12.6% next year, according to Kyser, who also projected that Los Angeles County's unemployment rate will be even higher, averaging 12.8% in 2010. The county's jobless rate was 11.3% last month.
Home construction will continue to fall, and the commercial real estate market will go through more distress as vacancies climb, the report predicts. As a result, it says, Los Angeles County will lose 168,000 jobs this year, led by the manufacturing sector, which is projected to shed 38,800 positions.
Some areas outside Los Angeles County are expected to fare even worse.
In San Bernardino and Riverside counties, where unemployment already tops 13%, the jobless rate will climb next year to an average of 14.7%, the forecast said.
"The Inland Empire will experience a longer and deeper recession than the rest of Southern California," the report said. Escalating foreclosures and falling home values have created the region's "worst-ever economic crisis."
The Inland Empire has lost 80,000 jobs in the last year alone, battered by the slowdown in international trade. The region is a major distribution hub for companies that move goods from the ports of Los Angeles and Long Beach to the rest of the country.
Even quiet Ventura County is in for a rough ride, pulled down by layoffs at corporate giants Countrywide Financial and Amgen. The county will shed 5.1% of its jobs in 2009, pushing average unemployment for 2010 to 10.3%, the forecast said. Ventura posted a jobless rate of 10.2% last month, up from 5.9% in June 2008.
