SAN FRANCISCO -- If you're looking for work, don't look in California.
The world's eighth largest economy is still finding its feet after suffering multiple economic shocks, including a housing slump, mortgage crisis and recession.
Employers in California, the most populous U.S. state, are expected to keep cutting staff in 2010 as the wider U.S. jobs market recovers.
As industries in other U.S. states prepare to rehire on signs of recovery, firms in California are still waiting for their economy to rebound.
The state has 12.2 percent unemployment, above the national U.S. level of 9.8 percent, and at odds with California's image as an oasis of opportunity in hard times.
California's economic engines -- Silicon Valley, Hollywood and gateway ports to Asia -- remain the envy of other U.S. regions but seem incapable of reducing Rust Belt-like unemployment rates.
That is largely because of the Golden State's housing and home building crisis.
In the 12 months through August, California's construction industry shed 142,000 jobs, or 18.5 percent of its work force, marking the largest decline on a percentage basis over the period of surveyed industry groups.
Those workers are struggling to find new jobs in construction or other trades, according to analysts.
House prices soared higher in California than in most other U.S. states earlier this decade and have crashed harder amid the credit crunch.
Developers are trying to unload unsold new homes and real estate agents are relying on selling foreclosures for a large share of business.
Tight credit and steep job losses have slimmed ranks of prospective home buyers, with many waiting for prices to drop further. At the same time, a number of other states are beginning to see home prices stabilize.
Tumbling personal, corporate and property tax revenues have put the brakes on government hiring as manufacturers wait for consumer spending to pick up before adding jobs.
"We're calling for a jobless recovery," said Jack Kyser, founding economist of the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp.
California is not poised for relief from double-digit unemployment like the broader U.S. jobs market, which is expected to see joblessness peak at 10 percent in early 2010 and ease to 9.5 percent by the end of next year, according to the National Association of Business Economics.
Analysts expect California's jobless rate to climb well into next year even as other measures of the state's economy regain some of their luster.
Comerica Bank last week reported its California Economic Activity Index extended gains since March by rising to a reading of 101 in August and marking a "welcoming strengthening" of the state's economy, said Dana Johnson, the bank's chief economist.
"The key missing ingredient to a sustained and healthy rebound continues to be job growth," Johnson said. "It is the only component of our index that has not contributed positively since it bottomed five months ago."
Similarly, California purchasing managers expect manufacturing to grow this quarter -- without new jobs.
Chapman University's index tracking their views rose to 54.5 this quarter from 53.8 in the third quarter, a return to late-2007 levels and the second consecutive quarter of readings above 50, indicating expansion.
Job seekers, however, won't benefit. Chapman University's index report said output and new orders are projected to increase in the fourth quarter, but employment and inventories of purchased materials are expected to decline at a faster rate compared to the third quarter.
Manufacturers are reluctant to hire without definitive signs the recession is letting up, said Raymond Sfeir of the university's Anderson Center for Economic Research.
"They're trying to survive with as few workers as possible," Sfeir said. "They're not going to commit until they're more certain."
Small- to medium-sized companies need more than economic cues to boost payrolls, Kyser said: "They're having trouble accessing bank lending and are concerned about health-care reform and about environmental regulations out of Sacramento."
They're also waiting on consumers who have been stashing cash and paying off debt in a hurry instead of fueling job growth at shops, distribution centers, offices and factories.
"About every two weeks I do a 'mall crawl' to regional malls to see how many people are there and carrying bags," Kyser said. "They're out strolling around, getting out of the house. But they're not spending."
That doesn't bode well for Los Angeles County, California's most populous county. Kyser sees its jobless rate next year averaging 12.8 percent -- or worse. "That may be a conservative forecast because it's already at 12.3 percent," he said.
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