Two Northern California financial analysts predicted Thursday that Nevada County’s economy will start slowly rebounding by the year’s end.

“You’ve seen most of the downturn,” said Chico State economics professor Dr. David Gallo, speaking at the 2009 Nevada County Economic Forecast Conference at the Holiday Inn Express in Grass Valley. “You are not likely to see any other negative economic signs” in Nevada County.

“We’re looking at three quarters of negative growth in 2009, and in 2010 it should be better,” albeit slow, said San Francisco Federal Reserve Bank Senior Economist Gary Zimmerman.

Despite that optimism, economists elsewhere pointed Thursday to national unemployment figures, which saw a rise in jobless claims for the 10th straight week.

Both Gallo and Zimmerman said housing prices here have bottomed out, or will soon. They said construction and home sales should increase with continued low interest rates and the flattening housing costs.

Housing prices have declined 22 percent in Nevada County since June of 2006, Gallo said, “But the good news is we’re at the bottom.”

In the last two years, Nevada County has lost 1,860 of its almost 48,000 jobs in services, retail, government, goods production and construction, Gallo said, driving the unemployment rate in February to 10.8 percent.

“Were probably near the bottom,” for unemployment as well, Gallo said.

The number of lost jobs is probably higher when small business owners who closed and then entered the job market are factored in, he added.

Keeping Nevada County hospitals in Grass Valley and Truckee vibrant is important to economics as well, Gallo said.

“You can’t let them fail,” he said, because retirees want to know they have good local medical care before they relocate with their life savings.

The economy might start improving before November, Gallo said. Part of the turnaround will probably be tourists not spending for overseas vacations and turning to the Sierra for recreation, he added.

Federal Reserve economist Zimmerman predicted things to get better during the final quarter of the year, with a slow recovery through 2010. He said continued low prices and interest rates should combine to ward off inflation and push banks to start loaning money again.

Economic stimulus funds from the government should start helping as well, Zimmerman said. Continued low energy prices will help small business and free up consumer spending at the same time, he added.

The federal economist does not see prices inflating, another factor in the slow upswing he expects. Economic experts should actually be on the lookout for deflation of prices, Zimmerman said, to avoid the 10-year economic lull like Japan just went through.

Both analysts said Americans are starting to save money again for the first time in a decade. That will help the country’s bottom line down the road, but will keep personal spending levels low for a while, Zimmerman said.

The sold-out conference was hosted by the Nevada County Economic Resource Council and Citizens Bank under a grant from Pacific Gas and Electric.

To contact Senior Staff Writer Dave Moller, e-mail dmoller@theunion or call 477-4237.