Economic Forecasts

California's jobless rate is close to peaking, but the recovery will be sluggish, with employers not expected to resume hiring until at least next spring, according to new forecasts by UCLA and other analysts. The state's unemployment rate, which hit 12.5% in October, will probably peak at 12.7% this month. Still, it won't fall below 10% until 2012, according to a UCLA Anderson forecast released today. That means California's economy almost certainly will continue to struggle for the foreseeable future.

WASHINGTON Like a centenarian on steroids, America's economic boom is closing in on the longevity record with no sign of slowing down. Unless something goes unexpectedly haywire, next January it will become the longest upswing in U.S. history. Is it a freak, the economic equivalent of a 100-year flood? A growing number of experts think not.

Brushing aside conventional wisdom, UCLA economists say California and the nation will survive the housing slump and job losses without plunging into recession -- although it will still be miserable for many Americans. "We are holding firm: no recession this time," UCLA Anderson Forecast Director Edward Leamer said in a report being released today.

In case you missed it, Treasury Secretary Timothy F. Geithner this week promised America that there won't be another financial crisis in 2010. "We're not going to have a second wave of financial crisis," Geithner said in an interview with National Public Radio. "We'll do what is necessary to prevent that. We cannot afford to let the country live again with a risk that we're going to have another series of events like we had last year." Well, there it is. And you wonder why the stock market is at 14-month highs?

The landscape is already littered with remnants of the go-go 1980s. BMW automobile sales cascaded as the German mark strengthened. Pasta salads became passe. Executive women are eschewing the navy-blue power suit. Then there is the mini-blind. The popularity of mini-blinds soared in the '80s. Mini-blind dealers joined video stores and fitness clubs among the hot new-business ventures of the decade. Now, however, mini-blind sales are as flat as day-old Perrier.

Like a gigantic, multilingual flea market, the nations of the world are blending inexorably into a single, global economy. At least, that is what we are often told.

The nation's worsening economy will continue to hemorrhage jobs next year, prolonging a deep recession that won't recover until at least 2010, forecasters at Chapman University said Tuesday. The U.S. unemployment rate is expected to climb from an estimated 5.7% this year to 7.8% next year as consumers pull back their spending, sending businesses already hurting from the credit crunch into further despair.

As the recession drags on, local businesses keep going out of business at an alarming rate. At least 260 businesses in the San Fernando and Antelope valleys and Ventura County have been forced into bankruptcy court in the last six months alone. That figure is up 17% from a year ago, according to Bankruptcy Bulletin Weekly Inc., a Nacogdoches, Tex., company that tracks bankruptcy filings for The Times.

On Saturday, Susan Roos called a meeting of employees at the Bessie Walls restaurant to serve up some bad news. Business was slow, she told them, and the restaurant was going to cut costs by reducing some waiters, cooks and other staff members to two shifts a week, down from four or five. "It worries us as managers," Roos said of the situation as she surveyed a dining room that had once been the master bedroom of the former Walls mansion in Anaheim.

So far, so good. Ventura County's economy has remained healthy as a business downturn batters a nation headed toward recession. Several benchmarks of prosperity are still strong locally--jobs, housing sales and construction of new homes, offices and business parks. Even industries jolted by the nation's economic downturn and the Sept. 11 attacks are rebounding: Hotels are filling back up, and many stores are back to the sales levels of last year.

2010 will not be the year the hiring floodgates open. Although certain sectors of the economy are showing signs of a thaw, employers say they plan to tread carefully in the coming year, and those that are hiring say they will wait until the second half to fill jobs. But there is hope for employees who saw hours and benefits slashed, or who took on extra responsibilities as companies tried to hold on to the talent that kept them afloat in tough times. Tom Wilson, managing director at investment management firm Brinker Capital, said unemployment was expected to decline by 1 percentage point each year as the economy recovers, meaning that by the end of 2010, unemployment would hover at about 9%. Over the last 18 months, people have "hunkered down" at their jobs, said Brian Kropp, managing director of the Corporate Leadership Council, which surveys about 300,000 employees each quarter.

In case you missed it, Treasury Secretary Timothy F. Geithner this week promised America that there won't be another financial crisis in 2010. "We're not going to have a second wave of financial crisis," Geithner said in an interview with National Public Radio. "We'll do what is necessary to prevent that. We cannot afford to let the country live again with a risk that we're going to have another series of events like we had last year." Well, there it is. And you wonder why the stock market is at 14-month highs?

The airline industry will rebound modestly next year, losing only about half of what it is expects to lose in 2009, a trade group predicted Tuesday. "The worst is likely behind us," said Giovanni Bisignani, director general of the International Air Transport Assn., the trade group that issued the financial outlook. The association represents about 230 airlines worldwide. The group's forecast for $5.6 billion in net losses next year attributes the improving picture partly to growing passenger and cargo demand.

From appliance stores in Brazil to auto assembly lines in Mexico, signs are evident that Latin America has seen the worst of the global economic crisis and is poised for solid expansion. The region is expected to post economic growth of 4.1% next year, according to a forecast released Thursday by the United Nations' Economic Commission for Latin America and the Caribbean. That's a stronger rebound than previously anticipated. Emerging powerhouse Brazil is expected to lead the way with projected gross domestic product growth of 5.5% in 2010.

California's jobless rate is close to peaking, but the recovery will be sluggish, with employers not expected to resume hiring until at least next spring, according to new forecasts by UCLA and other analysts. The state's unemployment rate, which hit 12.5% in October, will probably peak at 12.7% this month. Still, it won't fall below 10% until 2012, according to a UCLA Anderson forecast released today. That means California's economy almost certainly will continue to struggle for the foreseeable future.

It still won't look a lot like Christmas for retailers this year. Retail sales during the crucial November-December period are projected to fall 1%, to $437.6 billion, from the same period in 2008, the National Retail Federation said in its holiday forecast to be released today. That's bad, but not quite so dismal as the 3.4% drop last year, the trade group said. "The expectation of another challenging holiday season does not come as news to retailers," said Tracy Mullin, the group's president.

After months of nearly unmitigated gloom, glimmers of improvement are emerging in the U.S. economy. On Thursday, retail sales figures showed that the decline in consumer spending that began with a miserable Christmas shopping season might be stabilizing. Wells Fargo & Co. surprised analysts by saying it expected to report a record first-quarter profit despite setting aside $4.6 billion for potential loan losses.

Airlines face a global downdraft far worse than the turbulence after the Sept. 11 terrorist attacks that sent four major U.S. carriers into bankruptcy, an airline trade group warned Tuesday. The International Air Transport Assn. predicts that airlines worldwide will lose $4.7 billion in 2009 as plunging traffic offsets a deep drop in fuel prices, one of the carriers' largest expenses. Industry revenue is expected to fall 12% to $467 billion, the association said.

The declining Southern California economy may bottom out as soon as this summer, but more financial grief is coming as local industries struggle to cope with the recession, a prominent business trade group said in a forecast to be released today. Economic news this year will be "mostly bad," according to the 2009-10 forecast by the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp. The state's economic downturn is expected to hit bottom before the end of 2009, but when growth resumes it will be moderate at best, the Kyser Center said.

Chinese Premier Wen Jiabao brought cautious optimism to the World Economic Forum on Wednesday, predicting that his country will achieve its target of 8% economic growth this year despite the global financial meltdown. Wen called for enhanced U.S.-China cooperation to address the issue, even as he and Russian Prime Minister Vladimir Putin obliquely criticized the United States, blaming a relentless pursuit of profit for the worst financial crisis since the Great Depression.