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**UCLA Anderson Forecast: California Faces “Two-Speed Recovery” Through 2026**
UCLA Anderson’s latest economic forecast paints a picture of moderate progress for both the U.S. and California economies, with neither a sharp downturn nor an immediate resurgence on the horizon. Instead, the forecast projects that the economy will continue to “muddle through” until early 2026, with more robust growth expected in 2026 and 2027.
Specifically for California, the forecast highlights what it describes as a “two-speed recovery.” Certain high-productivity sectors — including artificial intelligence, aerospace, and advanced manufacturing — are expected to continue outpacing national trends. However, other key industries such as construction, nondurable goods manufacturing, retail, and leisure and hospitality are likely to face ongoing challenges and “significant headwinds” throughout the coming year.
Looking ahead, UCLA Anderson anticipates noticeable improvements by 2027 in several key economic metrics, including the unemployment rate, employment growth, non-farm payroll jobs, real personal income growth, and residential building permits.
This mixed outlook underscores the uneven nature of California’s economic rebound, reflecting a divergence between thriving innovation-driven sectors and more traditional industries that continue to struggle with post-pandemic recovery and inflationary pressures.
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