Reuters) - Two thirds of Californians believe their personal financial situation will improve in the next 12 months, a sign that residents in one of the hardest-hit states in terms of unemployment and foreclosures are becoming more optimistic about the U.S. economy, according to a survey issued on Thursday.

California, which boasts the world's eighth-largest economy, is often described as being "first in, last out" of any U.S. recession, so financial optimism in the Golden State may be an indicator that consumer confidence is growing nationally.

Yet the report issued by Citibank also found a stark divide in attitudes between the state's north, home to a booming Silicon Valley, and its south, where high jobless rates and depressed housing markets continue to dog such cities as Los Angeles and San Diego.

The survey found residents in the San Francisco Bay area, where many wealthy technology executives live, far more bullish about the coming year than those in Southern California cities.

"What really struck me this time was the incredible difference between the north and south of the state. It really was quite striking," said Rebecca Macieira-Kaufmann, president of Citibank California.

In all, nearly half of Californians believe 2012 will be better than 2011, according to the survey, compared to 33 percent who expect this year to be roughly the same and 17 percent who believe things will get worse.

But California consumers are also expressing caution about the economic recovery. Nearly two-thirds say the way they spend and save has changed permanently.

Nearly 60 percent say they have put off buying a major item such as a car. Seven in 10 have cut down on credit card use and nearly two-thirds have reduced the amount of money they owe. And almost half of those aged 35 to 54 are considering putting off retirement.

The quarterly Citi California Pulse survey was conducted from December 16 to 22 last year, among a random sample of 1,480 California residents, aged 18 and older. It has a margin of error of plus or minus three percentage points.

(Reporting By Tim Reid; Editing by Eric Walsh)

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