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Report: State economy close to recession

July 16, 2008 12:00:00 AM PDT
New numbers out Wednesday morning confirm what many have felt in their gut and their wallet for some time.The state's economy is close to recession, and parts of Southern California are already there.

Click in the Eyewitness News Story Window above to watch Leo Stallworth's report.

Experts said the state's economy looks bleak for the next couple of years. The Los Angeles County Economic Development Corporation released two reports that give reasons why the state economy is a mess.

Chief among them were the housing market crash, soaring gas and diesel prices and the writer's strike.

""If you go to the Riverside-San Bernardino area, they had a huge boom in new home building. They actually have what you call a housing supply bubble there, and then the other key industry for them is international trade imports started falling in early 2007," said Jack Kyser from the L.A. County Economic Development Corporation. "The decline has picked up so far this year, and so they're getting hit a couple ways too."

Already in L.A. County, the unemployment rate has jumped from 5 percent in 2007 to 6.2 percent in 2008.

Kyser said the worst is yet to come for places like Orange County and the Inland Empire: 18,600 jobs are expected to be lost from Orange County, and 20,500 jobs are expected to be lost in the Riverside/San Bernardino area in 2008.

Kyser said there are still some industries that are doing quite well right now in Southern California, including health services, private education, international tourism, and the technology sector. All are local industries that are hiring right now. Eyewitness News reporter Leo Stallworth contributed to this report.

 

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