Home Front

A blog about the economy and the Sacramento-area real estate market.

October 2, 2009
The economy: One step forward, two steps back?

The recovery of the US economy seems to be sputtering a bit. The job losses in September reached 263,000, significantly higher than August's and worse than economists had been expecting.

The national unemployment rate ticked up a tenth of a point, to 9.8 percent.

Sung Won Sohn, economist at CSU's Channel Islands campus in Camarillo, called the report "dismal and disappointing" and added, "Technically, the economy may have bottomed but the job market is lagging behind and struggling."

Where does this leave California? The state and local unemployment figures for September won't come out until Oct. 16. The last couple of monthly reports have been encouraging, with job losses totalling a relatively paltry 12,300 in August even though the statewide unemployment rate rose to 12.2 percent.

We saw another glimmer of hope earlier this week, when the state Board of Equalization reported that gasoline usage has ticked back up for the first time in three years.

Look for California unemployment rate to keep climbing. In a forecast released this week, Los Angeles economic consultant Chris Thornberg said the rate will peak at 12.8 percent later this year.

Thornberg, head of Beacon Economics, said the job losses will continue until the second quarter of 2010.

Nevertheless, Thornberg maintains a pretty positive long-term outlook.

"The fundamentals for growth remain strong," he wrote. "Once this cycle has been worked through, not only will growth return, it will return with a vengeance."


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