A slowing California economy, but no recession in 2007.


That's the consensus from not one, but two economic forecasts released last week.


Both say continued sluggishness in the housing market will act as a drag on the state's economy, but because the rest of the economy is expected to remain relatively healthy, there's little chance for a recession.


The University of California Los Angeles Anderson Forecast calls for non-farm payroll growth of 0.5 percent next year, down from 1.5 percent this year and 1.8 percent in 2005.


With fewer jobs being created, personal income growth is also expected to slow to 4.2 percent in 2007 from a robust projection of 7.2 percent this year.


"The weakness in the construction sector will slow the California economy, but without a second source of weakness, it will not be enough to create a recession," forecast author Ryan Ratcliffe concludes.


Similarly, the forecast from the A. Gary Anderson Center for Economic Research at Chapman University in Orange pegs the payroll growth rate at 0.9 percent for 2007 and personal income growth at 4.7 percent.


Both forecasts say the most rapid job growth next year will be in the professional and business services sector, which tends to have higher-than-average wages and salaries. Both reports say that weaker consumer spending means a slowing rate of growth for taxable sales.


Weaker taxable sales figures and smaller increases in property taxes will hit state and local governments hard next year, putting an end to three years of fiscal prosperity, both forecasts concluded.

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