UCLA Anderson Forecast Projects High Unemployment Through 2012

UCLA Anderson Forecast economists presented their quarterly economic outlook for the nation and California Tuesday, predicting that the state's unemployment rate will remain high at 12 percent through 2012.

However, UCLA Anderson Forecast Senior Economist Jerry Nickelsburg believes that a period of recovery is in sight.

"With the economy in stall mode, the most likely scenario will be a slow build over the next 12 months followed by an incipent recovery period," Nickelsburg wrote in his report, which was presented Tuesday at the Skirball Cultural Center in Los Angeles.

Nickelsburg believes that as we approach 2013, unempoyment will begin to fall and will average out at about 11 percent.

"Employment growth in 2011 and 2012 will push unemployment down marginally, and therefore, we do not expect it to reach single digits until 2014," Nickelsburg wrote.

His report states that while unemployment rates will remain high in inland areas for the next few years, coastal regions are expected to recover more quickly and have already outpaced the rest of the nation. The skilled labor market and advance manufacturing in coastal areas is what Nickelsburg believes is contributing to their speedier recovery.

This prediction, however, would mean a widening gap between inland and coastal regions.

"Averaged together, these two Californias - a contracting (inland area) and expanding (coastal area) - will generate muted economic growth through the first three quarters of 2012, growth that will be sub-par when compared to the rest of the country," Nickelsburg reports.

In its overall assessment of the national economy, the Anderson Forecast found the outlook far worse than it was three months ago.

"However, the forecast economists remain steadfast in their assertion that the United States is not currently in a recession, nor is there a recession in the forecast through 2013," according to a statement.