Yesterday's Forecast

From an Anderson news release of 9-30-2026: The UCLA Anderson Forecast’s September 2026 outlook finds an economy that has largely weathered a series of disruptions, with economic growth remaining resilient, even as inflation and interest rates have risen and labor markets nationally and in California remain weak... Nationally, the Forecast expects growth to remain above 2% for the remainder of 2026 and near 2% in 2027 and 2028, supported in part by continued investment in AI infrastructure and the wealth effects associated with rising technology equity valuations. Inflation, meanwhile, is expected to move higher again this winter, keeping interest rates elevated and prompting the Federal Reserve to raise rates accordingly...

California continues to present an unusual combination of superior economic growth and inferior employment performance... Much of [the] growth reflects California’s concentration in technology and other high-productivity industries... Aerospace is also benefiting from increased commercial aircraft production, defense purchases, space exploration and satellite production. But that strength has not translated into broad employment gains. California’s unemployment rate has remained above 5% for 31 months and stood at 5.1% in August, one percentage point above the national rate... The Forecast assumes AI-related hiring and the end of contraction elsewhere in the technology sector will produce employment growth beginning in 2027 and accelerating in 2028. 

Housing remains another constraint. New-home construction has changed little since June, with the annual pace of permits around 110,000 units, well below the level needed to address the state’s housing shortage. Elevated mortgage rates, tariffs on imported building materials and the loss of construction workers through deportations are expected to continue limiting new construction. Overall, the September 2026 California outlook is slightly weaker than the June forecast, largely because of continued disruption in energy markets...

Full news release at https://www.anderson.ucla.edu/news-and-events/ucla-anderson-forecast-sees-resilient-growth-despite-inflation-weak-labor-markets.