West LA Times

The latest analysis by the UCLA Anderson Forecast suggests that the recent slowing of the economy does not portend a national recession despite subtrend growth in the first quarter of 2024, which followed six months that exceeded the 2.5% average growth of recent years.

UCLA economists predict that the economy will continue to experience subtrend growth in the second and third quarters of 2024. However, recession alarm bells have been silenced due to expansionary fiscal policy, new national industrial policy, and robust consumer spending. Inflation is slowly finding new equilibrium in the 2.2% to 2.7% per annum range, and the Forecast expects the Federal Reserve to take a neutral stance while economic growth rebounds to trend rates next year.

Still, they note that current growth patterns could be affected by the presidential election in November if it results in a different national economic policy in 2025. Due to this uncertainty, weaker business investment is predicted for the third and fourth quarters of 2024 as some firms adopt a wait-and-see approach until after the election.

California’s robust economy grew at a 3.7% compound annual rate in 2023 — faster than all states except Washington, Florida, and Texas. This year, however, continued slowing of the national economy will affect California. Weaknesses in specific sectors, evidenced by high unemployment rates, will contribute to an atypical year of slower-than-U.S. growth for California in 2024. Nevertheless, Forecast economists anticipate more typical higher-than-U.S. economic growth for California over the following two years.

Read the full UCLA Anderson Forecast report.

---