Economic Recession Could Be Present in California, Florida

California–Many economists feel that California–whose economy is so substantial it could be considered the world’s eighth-largest–and Florida may already be in recession, The Financial Times reported Thursday.Along with Nevada and Arizona, California and Florida make up approximately a fifth of the U.S. economy. Recent data suggests economic activity in Florida is contracting and may be waning in California, the Times said.Existing home sales in California dropped 36 percent in the year to November 2007; in Florida, sales fell 30 percent. Median sale prices declined 12 percent in California and 10 percent in Florida.In addition to a large unsold home supply, Florida faces additional strain from increasing hurricane insurance premiums, and California faces ongoing issues in the jumbo mortgage market. New job creation has also slowed down in both states, according to recent data.Although states technically have contractions, not recessions, which are more of a nationwide occurrence, regional U.S. recessions have occurred in the past–and California and Florida represent a new wave of housing slump-weakened states that may be in trouble even if the country does not fall into a recession, according to the Times. Experts say a recession is even more likely for Florida than it is for California.