California Economy in Serious Condition

" California gained 25000. Jobs last month despite that according to new numbers out today. The State's unemployment rate increased slightly from twelve point 2% in September to twelve point 5% in October. And that is another modern record. Only three other states have a higher jobless rates in California. And for more we're joined on the KCBS news line now by Jerry Nichols -- he is a senior economist at the UCLA Anderson forecast we thank you so much for the time this morning. Do you consider the 25000 jobs California gained last month. As some glimmer of hope that the State's economic recovery will start affecting the job sector."

" hey I think it is exactly that the the -- members. Are. Pretty much what was expected in terms of the increase in the rate of unemployment that kind of the encouraging news is that payroll tops and have been created. And two created two you know in the areas that we expect to be leading. It is -- protests from business services in health care and education."

" Do you anticipate that the job creation of those industries will continue."

" We -- the only he has sort of fly in the ointment he is that we did have job creation in the government's factor this time. All that that's not all of -- 26000 jobs split. But you know but we're can expect to exceed that -- negative. Has budgets -- cut even further in the coming year."

" And the unemployment rate did still rise what industries are continuing to lose jobs."

" We're losing jobs in construction. And and that's one of the big drivers. That what's happening is not residential construction. Projects. That are coming to an end."

" And certainly not the workers who are building those those buildings and that no new projects and we get to see the impact of the infrastructure initiative and that. In the stimulus package so that should be coming. Before too long certainly in the new year and that should provide job opportunities for those folks that. But we're losing jobs there were losing jobs still in retail. He answered manufacturing jobs in the goodness and many actions are experts is starting to go up in manufacturing activity starting to increase."

" Now as we speak their protests on UC campuses over fee increases we've learned new and rough numbers about state and local budgets. All of which could mean higher taxes cuts to services cuts to services could also mean more layoffs. So what does the future hold for the State's economy is there a point where we can dig ourselves so deep that some of these jobs may never come back."

" Well you know he's in -- government we have some very serious problems. We stopped dead in July elicit a budget deal that would close a budget gap. But apparently. So that would son. It based on quicksand. He and we didn't close the budget gaps that we have to pay for the excess spending to 2009. Fiscal year as well us. To those spending programs to -- of the 2010. But it all of that means. Less jobs in the public sector and the private sector left to grow even more to make up those jobs."

" Do you see that that happening any time in the next couple of years."

" Eight it needs to 2010 is going to be a rougher ride than we talked for California as we access to smaller state government and end. I begin to dig ourselves -- but the private sectors fairly robust so. -- certain scenes some of that turnaround in 2011 but we do have another year of that's fairly tough times ahead of us."

" All right wolf thank you very much Terry Nichols -- Jerry Nichols berg is a senior economist. At the UCLA Anderson forecast. "