The Forecast

The UCLA Anderson Forecast met yesterday on campus to discuss the economic outlook, despite gaps in federal data caused by the government shutdown.

From a news release by the Anderson School: The December 2025 UCLA Anderson Forecast for the United States and California describe a situation with two economic trends currently working in opposition. In some sectors of the economy, ongoing and optimistic investment in artificial intelligence infrastructure and rising income among high-wealth households drive the economy, while tariff-induced inflation, policy-driven uncertainty and a gradually weakening labor market indicate signs of sectoral weakness. The result is an economy expected to soften through the first quarter of 2026 before regaining strength later in the year.

In California, the outlook is further complicated by a bifurcated economy: AI, aerospace and other high-productivity

sectors continue to expand, while construction, non-durable goods, leisure and hospitality, and government-funded services face significant headwinds. Deportations, elevated input costs, and weak job growth prolong an employment recession expected to last into early 2026, even as the state continues to outpace the nation in overall productivity.

On balance, the Forecast does not expect an immediate downturn or an immediate resurgence. Instead, both the nation and the state are poised to muddle through early 2026 before experiencing stronger growth in 2026 and 2027...

Full news release at https://www.anderson.ucla.edu/press-releases/us-economy-slow-through-early-2026-while-california-navigates-two-speed-recovery.

You can see the full forecast conference - which includes discussion of cryptocurrency and private equity - at the link below:

Or direct to https://www.youtube.com/watch?v=Ks0Wu0fw3FI.