LOS ANGELES, July 16 (Xinhua) -- California's economy is on the brink of recession because of the housing market crash, problems in the financial sector and soaring oil prices, according to an economic forecast released Wednesday.
Some areas, including Orange, Riverside and San Bernardino counties, are already in the midst of a recession, but Los Angeles and San Diego counties may dodge job losses this year, according to the nonprofit Los Angeles Economic Development Corp. (LAEDC).
"The housing market crash, problems in the financial sector, and soaring prices for gasoline and diesel have severely hammered the state and local economies," said LAEDC Chief Economist Jack Kyser in a statement accompanying the forecast. "They are on the brink of falling into a recession."
The report, a mid-year edition of the LAEDC's California 2008-09 Economic Forecast, said a housing recovery might come as late as 2010, and high gasoline and diesel prices will continue to hurt both businesses and consumers.
Kyser said employment in California will slip by 0.2 percent, or 29,600 jobs, in 2008, leaving the unemployment rate for the year averaging "a painful 6.4 percent."
"Muted growth will return in 2009, with non-farm employment increasing by 0.6 percent or by 85,600 jobs," he said.
In the meantime, Los Angeles and San Diego counties should escape job losses in 2008, with L.A. County adding 2,300 jobs and San Diego County adding 1,200, according to the forecast.
But both will see spikes in their unemployment rates, with L.A. County jumping from 5 percent in 2007 to 6.2 percent in 2008 and San Diego County rising from 4.6 percent in 2007 to 5.7 percent in2008.
One area that may experience job losses is entertainment -- possibly 5,500 in 2008, according to the forecast.
Offering the best prospects for job growth in California for the remainder of 2008 are technology and bio-medicine, the forecast said.
