LOS ANGELES – California's economy is on the brink of recession, and some regions – including Orange, Riverside and San Bernardino counties –are already there, according to an economic forecast released Wednesday.

But Los Angeles and San Diego counties may dodge job losses this year, according to the nonprofit Los Angeles County Economic Development Corp.

“The housing market crash, problems in the financial sector, and soaring prices for gasoline and diesel have severely hammered the state and local economies," said LAEDC Chief Economist Jack Kyser in a statement accompanying the forecast. “They are on the brink of falling into a recession."

The report, a mid-year edition of the LAEDC's California 2008-09 Economic Forecast, said a housing recovery might come as late as 2010, and high gasoline and diesel prices will continue to hurt both businesses and consumers.

Kyser said employment in California will slip by 0.2 percent, or 29,600 jobs, in 2008, leaving the unemployment rate for the year averaging “a painful 6.4 percent."

“Muted growth will return in 2009, with non-farm employment increasing by 0.6 percent or by 85,600 jobs," he said.

In the meantime, Los Angeles and San Diego counties should escape job losses in 2008, with L.A. County adding 2,300 jobs and San Diego County adding 1,200, according to the forecast.

But both will see spikes in their unemployment rates, with L.A. County jumping from 5 percent in 2007 to 6.2 percent in 2008 and San Diego County rising from 4.6 percent in 2007 to 5.7 percent in 2008.

One area that may experience job losses is entertainment – possibly 5,500 in 2008, according to the forecast.

Kyser noted that the entertainment industry got off to a sour start in 2008 due to the Writers Guild of America strike, which cost the local economy $2.5 billion.

“Difficult contract talks between producers and the Screen Actors Guild have contributed to a slowdown in production of feature films in Los Angeles. The standoff could continue for some time,” Kyser said.

But he said the industry should bounce back next year, with the number of jobs rising 5.2 percent.

Among the state's economic bright spots are San Francisco and San Jose, with both “experiencing relatively low economic discomfort,” Kyser said.

“However, some areas – including two in Southern California – can be considered to be in a recession now. Orange County lost 5,900 jobs in 2007, and will lose 18,600 more in 2008," he said. “Much of this reflects fallout from the sub-prime lending mess."

Riverside-San Bernardino had minimal job growth in 2007 and stands to lose 20,500 jobs in 2008 due to the steep fall off in new homebuilding and softness in international trade, according to the forecast.

Offering the best prospects for job growth in California for the remainder of 2008 are technology and bio-medicine, the forecast said.