UCLA: Jobless Rate To Top Double-Digits Through 2013
LOS ANGELES (CBS) — The recent slowdown in the U.S. jobs market may just be the beginning of what could be another long year for millions of unemployed Americans, according to a new economic forecast.
The report released by the UCLA Anderson School of Management on Wednesday points to a sharp dip in hiring over in the second quarter of 2011, with one economist predicting even more pain to come.
California's unemployment rate could spike another 1.7 percent over the remainder of the year, said UCLA Anderson Forecast senior economist Jerry Nickelsburg.
And while Nickelsburg expects hiring to pick up in the next two years, he warns the unemployment rate isn't expected to drop below double-digits until the second quarter of 2013.
"This shift is in part due to demographics and does not bode well for robust recovery in residential construction in the near future," Nickelsburg wrote. "Our national forecast has slower growth in consumer spending. "
"But, as with employment, growth is slow and uneven," he added.
Nickelsburg told KNX 1070's John Brooks that jobs building single-family homes are not likely to return anytime soon, which could force millions of Southland residents to relocate.
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"I wouldn't call it the death of suburbia, but you're going to see some difficulties on the periphery for some time to come," said Nickelsburg.
The dragging pace in employment gains this year can be attributed to slow growth in consumer spending nationally, and a shift in statewide housing demand toward condominiums and apartments instead of homes — causing a significant shift on the construction industry.
Nickelsburg also noted that the unexpected start of the year — when 95,000 new payroll jobs were added to the market — led forecasters to consider revising their prediction of slow growth for the year.
"The balance of the first quarter, as well as April and May in the current quarter, showed our hesitation to be justified," Nickelsburg wrote.
"While California is still adding jobs, it is at a much more subdued pace and unfortunately, we are on course to grow at our previously forecast slow rate."
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