West LA Times

The UCLA Anderson Forecast has projected a year of subpar growth for California in 2024, with improvement expected in subsequent years. The analysis, released today, indicates that the state's economy will experience slower growth due to weaknesses in specific sectors and a high unemployment rate, which reached 5.3% in August.

In 2023, California's GDP grew at a 3.7% annual compound rate, outperforming most states. However, this slowed to 2.8% in the second quarter of 2024, falling below the national growth rate by 0.2 percentage points. Despite this downturn, economists predict that California's economy could surpass national growth rates by 2025 and 2026, driven by advancements in technology and aerospace industries.

Nationally, the U.S. economy is facing challenges as it approaches the fourth quarter of 2024. Factors such as a Boeing employee strike and uncertainties surrounding the presidential election have led companies to adopt cautious hiring and investment strategies. Additionally, an impending dockworkers' strike and Hurricane Helene's approach to the Southeast pose further economic threats.

The forecast anticipates continued congressional gridlock regardless of the election outcome but suggests that if labor disputes are resolved smoothly by year's end, both 2025 and 2026 could see significant U.S. GDP growth fueled by residential investment.