Calif. Portends Recession to Come

The housing bubble burst there first ... is California a sign of things to come in US?
By Jim O'Neill,  Newser User
Posted Oct 9, 2008 9:02 AM CDT
A sign in front of a foreclosed home in Antioch, Calif.   (AP Photo/Paul Sakuma)
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(Newser) – Trend-setting California may be the “canary in the mine shaft,” its own recession showing the rest of the country what a national downturn could look like, reports the Wall Street Journal. The state’s $1.8 trillion economy has been bludgeoned by an unemployment rate among the worst in the US at 7.7%, and economists say there’s no end in sight. Nationally, a similar picture is beginning to emerge.

The increasing US unemployment rate—at 6.1% in August, up from 4.7% a year earlier—has led to slowed consumer spending since July, again mirrored in California, whose taxable sales dropped 1.82% in 3rd quarter 2007 and have continued to decline. But first in doesn't necessarily mean first out: One economist expects things to get worse before they improve, with increased job loss reaching into 2009.