California's economy is expected to take a turn for the worse in 2008, as job growth slows due primarily to the softening housing market, according to two different university forecasts.
The quarterly UCLA Anderson Forecast calls for unemployment rates to hit 6.1 percent, largely due to the loss of jobs within the mortgage lending sector.

Meanwhile, the A. Gary Anderson Center for Economic Research at Chapman University in Orange County is projecting sharp increases in foreclosures despite a recent federal plan to assist subprime mortgage holders, and is predicting job growth across the state of only 0.1 percent next year."Our estimates suggest a loss in bond value holdings resulting from these foreclosures to be roughly $350 billion," the Chapman report states. "This loss in paper wealth is expected to lead to a significant decline in consumer spending, and to further credit tightening."Both reports say California's economic picture will trend with that of the rest of the nation, with UCLA predicting the state to narrowly avoid a recession."In California, the central theme of the forecast remains the same as it has been in the past few quarters, and mirrors that of the national forecast: Weakness in the vast real estate sector will be the central component of a sluggish economy, but there will not be enough job loss to trigger a state-wide recession," according to the UCLA forecast.