The spring 2026 UCLA Anderson Forecast suggests the U.S. economy is regaining momentum after a turbulent 2025 marked by tariffs, supply chain disruptions and a lengthy federal government shutdown.
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.
