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California Jobless Rate to Approach 12%

California's jobless rate will climb to a staggering 11.9 percent between April and June next year, and double-digit unemployment will linger in the nation's most populous state at least through 2011, according to a new economic forecast.

AP

The somber outlook in the quarterly Anderson Forecast from the University of California at Los Angeles, to be released Wednesday, came as the state struggles with a housing meltdown, budget crisis and slack consumer demand that has hurt the retail, manufacturing and trade sectors at the heart of the state economy.

The projected jobless rate would grow to 11.9 percent between April and June 2010, and average 11.7 percent for that year. The figure stood at 10.5 percent in February. Forecasters say it will average 11 percent for 2009.

Though the California economy will be growing in 2011, it will not be generating enough jobs to drive the unemployment rate below double digits until the following year, the report projected.

"The stalled California economy is simply not producing the jobs required for the new entrants to the labor force over the next couple of years to prevent these elevated levels of unemployment," it said.

The forecast said the impact from Washington's massive stimulus package—billions of dollars in spending for roads, health care and other programs—might not be the rescue that's envisioned as government budgets wither during the recession.

President Barack Obama's stimulus bill "means less taxes and more spending, and the solution to Sacramento's budget problems means more taxes and less spending. So at least to some extent they are canceling each other out for the coming six months," the report said.

California's problems mirror the nation at large. Nationally, the unemployment rate sits at 8.1 percent, the highest level since the bruising recession of the early 1980s.

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