Recession

Schafer Bros. furniture was just another small manufacturer that couldn't make it through the hard times. In January of last year, the 52-year-old Orange County company--victim to higher overhead and lower sales--closed its doors. Two months later, on the night before the company's equipment was sold at auction, former salesperson Janette Fling walked through the huge, quiet warehouse, looking at the rolls of leather and woodworking equipment tagged for sale.

With signs that the worst of the recession may have passed, President Obama is trying to keep the nation focused on a still-troubled economy and regain momentum in Congress for his plan to revamp healthcare, energy, education and financial regulation -- thorny issues that have long defied solution. "By no means are we out of the woods just yet," Obama said in what amounted to an economic State of the Union address Tuesday.

It's official: This recession is the worst the United States has experienced in more than 25 years, the government said Friday. And it appears likely to get worse before it gets better. At the White House, where the new administration is working on a broad strategy to combat the crisis, President Obama described the downturn as "a continuing disaster for America's working families."

The shaky economy is rattling the summer music festival. In the months leading up to the Southland's premier concert event, the Coachella Valley Music and Arts Festival -- which kicks off its 10th edition in Indio today with performances by such pop luminaries as Paul McCartney and Leonard Cohen -- recession-era fiscal realities have led to a string of cancellations by respected festivals. Florida's Langerado Music Festival was canceled because of poor ticket sales.

The economy's yearlong downturn, officially declared a recession Monday, could last well into next year or even beyond, challenging the government to devise new responses as traditional methods show limited results.

Unemployment in California shot up to its highest level in nearly 26 years in January, leaving more than 1 in 10 workers without a job. Figures released Friday show that 79,300 jobs were lost in the state last month, bringing the total number of unemployed to 1,863,000, or 10.1% of the workforce. That's the highest since the rate touched 10.4% in 1983. Conditions are even worse in Los Angeles County, which saw its unemployment rate jump to 10.5% in January from 9.2% the month before.

The depth of the recession became much clearer Friday as the federal government announced that the economy shrank at a dramatic 6.2% pace in the final three months of last year, the country's worst economic performance since 1982. The Commerce Department sharply revised its earlier estimate of a 3.8% contraction in gross domestic product, the value of all goods and services produced. That initial figure was more optimistic than the 5% to 6% drop most economists had predicted.

Happy hour is getting happier, and that's making restaurants sadder. As the recession drags on, drinkers such as Luis Romero of Anaheim are gravitating to happy hour -- that late-afternoon period when bars and restaurants sell discounted drinks and food to attract customers during what otherwise would be a slow time. "You start watching your pennies a bit more," said Romero as he sipped a $3.

This year the Lakers e-mailed Christmas cards to save postage. The team cut back on corporate gifts, created an installment payment plan for season-ticket holders and noticed many fans didn't buy season parking passes. Blame the recession. Even the Lakers, the NBA's most valuable franchise (worth $607 million and with a $51.1-million operating profit last season, according to Forbes magazine) is pinching pennies. "We're doing cost-cutting," said Tim Harris, the Lakers' senior vice president of business operations.

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.

The state's children found no escape from harder times last year whether at school, where they endured larger classes, unfamiliar teachers and scarce supplies -- or at home, where they faced family stresses from emptier refrigerators, job losses and more frequent dislocation. The grim compilation comes in a report to be released today by UCLA's Institute for Democracy, Education and Access and the University of California All Campus Consortium on Research for Diversity. "It's the bleakest I've ever seen," said one Los Angeles County school principal, who, like others in the principals survey, participated anonymously.

The United States has more poor children now than it did a year ago. As more families are hammered by the recession, more are using food stamps to feed their kids, according to a study by the Brookings Institution and First Focus, a bipartisan child advocacy group. "They are a really good barometer, a kind of economic-needs test," said Mark R. Rank, an expert on social welfare programs at Washington University in St. Louis. "If you're receiving food stamps and you're a child, by definition, you're in poverty."

Between dealing with terrorism threats and crises abroad, President Obama is unwinding in Hawaii with his family this week. They've snorkeled in pristine bays and dined in fashionable restaurants. Tourism officials only wish there were thousands more visitors like them. Tourism is the glue that holds this island state's finances together, keeping its streets clean, its workers paid and its children educated. But for the last two years, vacationers and conventioneers alike have abandoned Hawaii in favor of less exotic destinations closer to home.

This year the Lakers e-mailed Christmas cards to save postage. The team cut back on corporate gifts, created an installment payment plan for season-ticket holders and noticed many fans didn't buy season parking passes. Blame the recession. Even the Lakers, the NBA's most valuable franchise (worth $607 million and with a $51.1-million operating profit last season, according to Forbes magazine) is pinching pennies. "We're doing cost-cutting," said Tim Harris, the Lakers' senior vice president of business operations.

Step through the glass doors of Eso Won Bookstore, the landmark but struggling Leimert Park shop specializing in African American titles, and you'll see shelves stacked with civil rights classics by Martin Luther King Jr., poetry by Maya Angelou and important fiction including James Baldwin's "Another Country." Their ranks will be thinned substantially when co-owner James Fugate switches to more bargain-priced books when restocking his shelves next year in a bid to boost sales. Too much money is tied up in the slow-moving back-list tomes, which sell for $15 or more, he said.

Single and unemployed, Adam Holguin knows he could find better opportunities outside California, where the unemployment rate is 12.3%. But with little savings, and college loans and credit card bills to pay, he can't afford to leave. "I don't have the finances at this time to move," said Holguin, 31, of Rancho Cucamonga. One of the hallmarks of the American worker has been mobility -- the speed with which people like Holguin have moved to find opportunities. But the recession of the last two years has produced a profound change, creating conditions that have tethered many people where they are. Since 2007, the nation's mobility rate has fallen to its lowest level since World War II, says William Frey, a demographer at the Brookings Institution.

Six years ago, when Jason Reitman set out to write a dramatic comedy about a "corporate downsizer" who flies around the country and fires employees, the economy was booming and jobs were plentiful. By the time the young director, known for his 2007 hit "Juno," got around to making "Up in the Air," the world had drastically changed. The great recession hit, unemployment soared to nearly 10% and adult audiences had largely forsaken films with weighty topics, instead favoring escapist fare.

Dubai is a clever blend of audacity and architecture, a shiny monument to the egos and ambition that turned a tiny emirate into a Middle East financial giant. Russian oligarchs stroll along man-made islands shaped like palm trees, and sheiks race down a ski slope built inside a shopping mall. Lacking the oil reserves of the emirate's neighbors, Dubai's ruling family created a parallel economic reality fueled by real estate, international investment and the art of the possible. The emirate was fashioned into a sleek cityscape of startling images: Islam balanced against the seduction of Western capitalism, and tribal traditions brushing the fleeting trends of globalization.

Two young actors are rehearsing a pivotal fight scene in a new short play opening tonight at a small theater in Lower Manhattan. They are portraying out-of-work laborers from the Midwest who have been flown to New York to participate in a kill-or-be-killed social experiment that earns the survivor $25,000. For what feels like a very long minute, the actors struggle, their faces and bodies contorted, over a (fake) knife until finally they crash onto the stage floor. The thump shakes every inch of this 75-seat theater.

The U.S. economy expanded at an annual rate of 3.5% in the third quarter, unofficially marking the end of the worst recession since World War II. The growth reported Thursday by the Commerce Department for July to September snapped four straight quarters of economic contraction and slightly exceeded most analysts' forecasts. The quarterly increase reflected a rebound in consumer spending supported by federal stimulus programs as well as improved business investments and home building.