Report: Calif. economy will keep lagging

LOS ANGELES While retail sales are up slightly in the state, so are the unemployment numbers, and they're hampering growth in California.

"Probably the best economic advice is be patient," said Jerry Nickelsburg, senior economist of the UCLA Anderson Forecast. "We're growing slowly. We will grow more rapidly as we get out into 2011 and 2012."

The report says while there has been some growth, it hasn't been evenly dispersed throughout the state of California. Coastal Southern California was the only region to show net job increases for the first half of the year.

Economists say that while California's economy will show some growth next year, it won't be generating enough jobs to have a dramatic effect on unemployment. Unemployment is expected to average 12.2 percent for 2010. The national rate is currently 9.6 percent.

The report says that the ports are thriving, with the volume of goods passing through L.A., Long Beach and Oakland steadily increasing over the past three months. Exports through LAX have seen similar increases.

And while retail spending is up, the increase amounted to just half a percentage point. The once-bustling shopping areas have quieted, as consumers keep a tight grip on their money.

"I've really got to spend wisely right now. I've felt the hit everywhere," said Ryan Warner of Los angeles.

One result of cautious spending can be seen on Melrose Avenue, where there's a lot of "For lease" signs seen in front of stores. Between Fuller and Martel avenues, about one-third of the stores are empty.

To add to that, retail space is half of what it used to sell for. It used to be $5 to $6 a square foot, but now it's $2 to $3 - it's a number not seen on Melrose Avenue for the past 10 years.

"If you're the next person that wants to pour your heart and soul and your savings into a business, Melrose is the place to do it right now," Kennedy said.

But for most, cash flow is low. Real personal income was only forecast to grow half a percentage point this year.

"Is it gonna get any better? You know I really don't know. I guess only time's going to tell," said Mike Zeldis of Hollywood.

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