The UCLA Anderson Forecast indicates that the U.S. economy is set to regain momentum in 2026 after a challenging 2025, which saw tariffs, supply chain issues, and a prolonged federal government shutdown. Economists project economic growth will reach close to 3% in 2026. This anticipated expansion is attributed to income tax reductions, increased fiscal stimulus, and significant investment in artificial intelligence infrastructure. As interest rates decline and some tariffs are reduced, concerns have shifted from a potential slowdown to risks of the economy overheating.
California’s economic outlook presents a more nuanced picture. Although the state’s output has outpaced national growth for four straight quarters, job creation has lagged and unemployment remains above 5%. According to UCLA economists, California is developing into a “bifurcated economy.” Growth sectors like AI and aerospace are expanding rapidly, while industries such as construction and retail see slower progress. This split highlights ongoing challenges in converting technological innovation into broader employment gains.
The University of California Los Angeles (UCLA), where the Anderson Forecast originates, is recognized for its association with Nobel laureates and MacArthur Fellows as noted on its official website. The university has also built a reputation for excellence across scholarship, arts, and athletics (link). UCLA promotes diversity and inclusion through its academic programs and cultural initiatives (link), all within its 419-acre campus (link). As part of the University of California system (link), UCLA continues to achieve both national and international recognition for its contributions (link).
“Economists now expect growth to approach 3% in 2026, driven by income tax cuts, expanded fiscal stimulus and massive investment in artificial intelligence infrastructure. With interest rates easing and some tariffs rolled back, the main risk has shifted from economic slowdown to the possibility of overheating.”
“California’s economy tells a more complicated story. While the state’s output has grown faster than the national economy for four consecutive quarters, job growth has lagged and unemployment has remained above 5%. UCLA economists describe California as developing a ‘bifurcated economy,’ where booming sectors such as AI and aerospace drive growth while industries like construction and retail expand more slowly — highlighting the challenge of translating innovation into broader job gains.”
Read the full UCLA Anderson Forecast news release.