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CSUF: Economic Rebound in late 2009 or 2010

The economy won’t rebound until late next year or early 2010, according to a forecast from California State University, Fullerton economists.

In a forecast given Thursday at the Hyatt Regency Irvine, economists Anil Puri and Mira Farka said turmoil from the nation’s financial markets has taken its toll on local employment and housing.

Though the global financial crisis may quiet down in the next two quarters, household and business spending will take longer to rebound, they said.

The forecast predicts job losses will continue in the next 18 months, with the county’s unemployment rate rising to more than 6%.

The overall unemployment rate for the county stands at 5.7%, up from 3.9% last year.

In September, local employers shed 29,600 workers from a year earlier, a 2% decline, according to the state’s Employment Development Department.

Almost all sectors of the economy will lose jobs in Southern California this year, except education and healthcare. The government also added jobs last year, but will be challenged to it again with a tight budget.

So far, finance and construction jobs have made up 70% of the jobs lost and will continue to be the weakest areas into next year.

The forecast also calls for housing prices to fall over the first half of next year, though they should stabilize in the second half.

“Any recovery in housing prices will have to wait until the end of 2010,” Puri said.

The median home price in the county is less than $550,000, which was where it was in 2004.

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