California's economy is withstanding the housing slump, although the state's economic climate may soften in the coming year, according to an influential forecasting group."The message is, real estate will continue to be a drag on the economy, but not enough to create a recession," said Ryan Ratcliff, an economist with the UCLA Anderson Forecast, which releases its quarterly report on California today.
Job growth in 2006 remained strong, Ratcliff said, with a payrolls increasing 1.9 percent. That translated into 277,000 new jobs. UCLA predicts job growth will be 1.3 percent this year, or 201,000 new jobs, then slow to 0.9 percent in 2008, rebounding to 1.6 percent in 2009.
Slowing home sales and stagnant home prices last year led forecasters to expect significant job losses in construction and financial services as fewer homes were built and fewer mortgages issued.
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