(CNS) Posted Wednesday December 7, 2011– 11:10am

California saw a surprising increase in jobs in September and October, raising hope that the state is crawling out of its economic doldrums, but the anticipated sluggishness of the national and international financial picture should temper those expectations, according to a UCLA economic forecast released today.

"The employment numbers continue to be encouraging, but the trade numbers do not reflect a robust recovery," UCLA Anderson School of Management senior economist Jerry Nickelsburg wrote in his quarterly forecast.

"In the broader picture there is slow growth in consumption in the U.S., there is a slowing of growth to the point of double-dip recessions for some of California's trading partners abroad and there is an economic policy in Washington, which is now for all intents and purposes played out," he wrote.

Nickelsburg predicted in the report that the recent surge in employment will abate quickly, and the state's economy will show slow growth through 2012. The unemployment rate will gradually drop over the next several quarters, putting it on a track toward single digits, although it likely won't get there, staying around 11.6 percent through next year, Nickelsburg wrote.

The rate will average about 10.5 percent in 2013, and it could potentially drop into the single digits by 2014, he predicted.

"We might be witnessing the return of the recovery, indeed the indications are strong enough to slightly boost our forecast, but the headwinds are substantial and the resumption of employment growth we are seeing shifts our view of the recovery forward, but it does not change our general view of how the recovery will play out in the coming years," according to the forecast.

Nickelsburg noted in the report that there has been job growth across California, pushing the unemployment rate down from 12.1 percent to 11.7 percent, while the national unemployment rate dropped by only 0.1 percent. Nationwide, however, the unemployment rate is still about 2.7 percent less than California, "an improvement over July, but the gap remains wide."

On the national front, UCLA economists opined that modest economic growth -- at about 2 percent for the current quarter but below 2 percent for most of next year -- won't be enough to significantly drive down the unemployment rate.

"Put simply, there are currently 25 million Americans looking for full- time work," senior economist David Shulman wrote.

"... Furthermore, government policy seems to be incapable of noticeably improving the situation," he wrote. "Indeed, the federal government will be reducing purchases during the forecast period. The economy will be sustained by modest increases in consumption and business investment along with the beginnings of a housing recovery in 2013."

Copyright © 2011 City News Service

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