The Vallejo area was the first in Northern California hit by the recession and it will be the last to recover, according to an economic think tank's latest forecast.

The University of the Pacific's Business Forecasting Center's most recent report predicts Vallejo won't recover to its pre-recession jobs level for about five years, or until the second quarter of 2014. Merced and Sacramento, predicted to be the second to last to recover, won't do so until near the end of 2013, the report reveals.

San Francisco and San Jose, on the other hand, will be the first Northern California metropolitan areas to recover, in mid-2012, center director Jeff Michael said.

The center is part of the Eberhardt School of Business and produces quarterly economic forecasts for nine metropolitan areas, from Sacramento to Fresno and the San Francisco Bay Area.

"Vallejo's employment was the first to peak, in the first half of 2006, and began a slow decline after that," Michael said. "Predicted growth just sort of stopped in '04."

All the news is not bad, however, he said. The retail industry, which has been "slammed" in most areas, didn't suffer as badly in the Vallejo area, Michael said.

"And construction and building in the Vallejo area may be bottoming out before most other areas," Michael said.

In Vallejo and other areas hard-hit by the foreclosure crisis, a bottom may have been reached in the housing market and a stabilization and recovery may be starting, he said.


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The center's California and Metro Forecast predicts job losses statewide will top 1 million before the recession ends this fall, Michael said. But in the next few months, the pace of private sector employment is expected to slow even as state and local government layoffs begin, he said. He explained that cutbacks in the public sector usually follow a private sector decline.

Unemployment is expected to peak at 12.3 percent early next year and remain in double digits until the end of 2011, Michael said.

The report suggests that San Francisco was the last metro area to fall into recession, and is expected to be the only metro area in Northern California to avoid double digit unemployment.