The turbulent year that saw gigantic job cuts and a housing slump, left California with a 9.3 percent jobless rate in December, with 78,200 jobs lost during the month. According to figures released by State Employment Development Department, the unemployment rate the previous year was 5.9 percent.

Officials said that with big layoffs announced by most industries, except the farming sector, the most populous US state has been in the clutches of the deepening recession. Out of the eleven industry categories, ten cut jobs; trade, utilities, and transportation leading the others.

The Department spokeswoman, Patti Roberts said that the state's unemployment rate in December was its 14-year highest; and noticeably higher than 7.2% national average for the month - indicating a gush in job cuts over the last three months of 2008.

Senior Economist Stephen Levy, of the Center for Continuing Study of the California Economy, said: "We all expect the job losses to continue and unemployment rates to go higher. It's really disappointing ... We'll be in double-digits."

The huge billion budget deficit is another lingering problem of California, weighing heavily on Governor Schwarzenegger and lawmakers. The figures will likely go past $40 billion over the rest of the current fiscal year and the next one.

Art Pulaski, the California Labor Federation head, said California is face-to-face with a "code red economic crisis," because of which the governor and lawmakers need to strengthen the unemployment insurance system of the state.