Report: California Teeters on Edge of Recession

LOS ANGELES-On the heels of bad news Tuesday from Fed Chairman Ben Bernanke, who told lawmakers that growth and inflation risks are increasing, comes bad news today from the Los Angeles County Economic Development Corp. in its mid-year 2008-2009 Economic Forecast and Industry Outlook for California and Southern California. The report, released today, depicts California in or near a recession, with some areas and some industries withstanding the downturn better than others.

“California is tip-toeing along the edge of a recession, while some of its larger metropolitan areas have been in one since mid-2007,” the report states. It shows the balance of 2008 and much of 2009 seeing a mixture of good and bad news for California, “with the outcome looking more and more precarious.”

Since the Downtown Los Angeles-based LAEDC’s last report in February, the Southern California region, the state and the nation have undergone myriad changes, namely skyrocketing costs of energy and commodities. And “don’t forget, you have the intensification of the financial sector problems,” says Jack Kyser, one of the authors of the report and chief economist for the LAEDC.