California officials' failure to cut as much spending as they planned during this year's budget negotiations will put a drag on the state's economic recovery when deferred job cuts are enacted to plug a still-gaping deficit, according to an economic forecast released Wednesday.

But the quarterly Anderson Forecast from the University of California, Los Angeles, also said the delay in implementing those cuts has an upside, since it will keep state workers employed until the economy is better able to put them back to work.

"You would have had people entering the job market while the labor market was contracting instead of expanding," the report's author, Jerry Nickelsburg, said in an interview.

The forecast expects the state's unemployment rate to reach a high of 12.7 percent in the fourth quarter of 2009 and not dip back into single digits until 2012. The state's unemployment rate was 12.5 percent in October, the last month for which Employment Development Department statistics were available.

As a result of the expected spending cuts, job growth will be stymied by losses in sectors of the economy that receive state funding, Nickelsburg said.

Tepid activity in the state's ports due to reduced nationwide demand for imported goods will also tamp down employment, and the abundance of unsold housing in California's inland areas will hurt job growth in construction sectors that were important to the state before the downturn, he said.

Employment will contract by 4.3 percent in 2009 and 0.7 percent in 2010, the report said. A reversal won't come until 2011, when employment is expected to grow at a rate of 1.7 percent.

Economic growth will begin to pick up in the beginning of 2011 and should be expanding by more normal levels by the middle of that year, the forecast said.

Nickelsburg wrote that the state's recovery will likely be fueled by renewed exports of manufactured and agricultural goods, increased public works construction, and growing investment in business equipment and software.

Federal stimulus money for energy research could also benefit the state's academic and technology centers, he said in an interview.

The forecast was released a month after state budget analysts released a report showing that some $2 billion in revenue that legislators sought to raise had failed to materialize.

The Legislative Analyst's Office report also found that more than $4 billion in cuts that were expected to slash the state government work force were never implemented.