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**UCLA Anderson Forecast: U.S. Economy Expected to Recover by Mid-2026; California Lagging Slightly Behind**
Economic growth across the U.S. is projected to regain momentum in mid-2026, reaching a 2% pace by the fourth quarter of that year, according to the latest quarterly forecast from the UCLA Anderson School of Management. This marks a more optimistic timeline than previous projections. However, California’s economic rebound is expected to lag slightly, starting in late 2026 and gaining speed in 2027.
The UCLA Anderson Forecast highlighted a series of recent economic shifts that have shaped the outlook, including a modest decline in payroll employment in June, rising inflation trends, and a pivotal monetary policy adjustment announced by Federal Reserve Chairman Jerome Powell. This policy shift, often referred to as the “Powell Pivot,” signaled a stronger focus on employment goals, balancing the Fed’s dual mandates of inflation control and labor market health.
For California to resume its historical trend of outpacing national economic growth, the forecast emphasized the importance of a strong resurgence in durable goods manufacturing—particularly in high-tech and aerospace sectors.
These insights suggest a cautiously optimistic outlook, with hopes pinned on forward-looking policies and sector-specific recoveries to drive sustainable growth both nationally and in California.
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