The Commerce Department busted down its previous estimate of GDP growth in the second quarter from 1.3 percent to 1.0 percent.
This is a major problem for California, where the unemployment rate of 12 percent is almost three percentage points higher than the national rate of 9.2 percent. In Southern California, it's even worse. L.A. County is at 12.4 percent. Other counties are even higher
A lot of economists now think that GDP growth –which, in a "normal" recovery should be running at something like 5 percent – will muddle along for years, slowly improving, but grinding down the rolls of the unemployed more like a guy with sandpaper than a guy with a belt sander.
In Southern California we have another problem. A significant chunk of the unemployment we're dealing with is related to the housing industry, which may take much longer to recover than the economy as a whole. There are some macro-economic trends, related to household formation, that bode well long-term. But by that, we mean LONG TERM – as in workers not going back to building new houses until the middle of the decade.