California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

According to two new economic forecasts, Californians are still going to be confronted with a
recession for the foreseeable future. 

In a new economic forecast, economists from UCLA Anderson Forecast, California will be in a
deeper and longer recession than previously thought. The state will be mired in a “very weak”
economy for the first three quarters of 2009 and will see virtually no growth in the fourth quarter
of this year, the forecast predicts. The California economy will begin to pick up by 2010 and by
the end of next year the state’s economy will begin to grow at something resembling normal levels,
it says. The UCLA Anderson Forecast expects the unemployment rate for the state to rise to 11.9
percent in the second quarter of 2010 and average 11.7 percent for the year

In yet another forecast, the Business Forecasting Center at the Eberhardt School of Business at
the University of the Pacific identified that the California economy is currently in the steepest part
of a two-year decline. The state’s recession should end in the fourth quarter of 2009, but the job
market will remain weak through most of 2010, the report predicts. The forecast identifies that after
a year of mild recession between September 2007 and September 2008, the California economy
entered a steep nosedive last fall along with the U.S. and global economy. The unemployment rate
is forecast to peak just over 12 percent at the end of the year, surpassing the previous peak of 11
percent in 1982-83. The long recovery from the deep downturn is expected to keep unemployment
in double digits until the end of 2011.

I am Tim Johnson and this has been the California Business Minute.