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California: High Jobless Rate and Foreclosures by State

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By : John Cutts    99 or more times read
As California continues to be among the top three in foreclosures by state, its unemployment rate soared to a record 10.1 percent in January. The jobless rate last December was 8.7 percent while the rate in January 2008 was 6.1 percent. The state’s rate is also above the January national unemployment rate of 7.6 percent.

According to Jon Haveman, economist of Beacon Economics, California’s unemployment rate will further rise to the mid-10-percent range because of the state’s continued high ranking in foreclosures by state. He expects though that the rate will settle at that range much of 2009.

Haveman further predicted the GDP will only start to have significant growth in the first months of 2010. He noted that the national economy declined at an annual rate of 6.2 percent compared to 2007, its deepest decline in 25 years.

Consumer spending has also significantly declined across California because of stock market troubles and layoffs. The state, considered the eighth largest economy in the world, is being pulled down by its continued top ranking in foreclosures by state.

Kevin Callori, spokesperson for the California Employment Development Department, said the state’s high figures in foreclosures by state have depressed home prices and have made consumers less confident, leading to depressed wholesale and retail sales.

Based on Callori’s statements, about 33 percent of business losses have been in industries related to housing such as financial and construction services. Another 33 percent have been in industries directly linked to consumers such as retail. All of these point to the role of consumer confidence in the economy and the economic impact of figures in foreclosures by state.

According to the Center for Responsible Lending’s projections, California will have 462,100 new foreclosures in 2009 if no significant remedies are implemented.

The state also lost 79,300 non-agricultural jobs last month from the month of December 2008 and lost 494,000 non-agricultural jobs from the year 2008, according to state officials.

Meanwhile, in RealtyTrac’s report on foreclosures by state, it announced that foreclosures declined by ten percent during the month of January. But California remains in the top three with the highest foreclosure rates in January. California has one foreclosure filing in 173 housing units, the second highest rate in the list. Nevada had the highest foreclosure rate, with one foreclosure filing in 76 housing units. Florida is third, with one foreclosure filing in 182 housing units.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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