Earlier this week, the UCLA Anderson School of Management released its annual Anderson Forecast, an analysis of the state and national economy. For California, the economists predict the state will continue to experience sub-par growth through 2024 but estimate that California will once again outpace the nation’s economic growth in 2025 and 2026. The forecast includes analysis of the state labor market, as well as trends in California’s logistics industry, film and television production, and the housing market.
The report provides some nuance in evaluating California’s employment trends, as the state’s unemployment rate has exceeded the national trend in recent history. The forecast, similar to the state’s budget analysis from earlier this year, attributes some of the trend to a “normalization,” following dramatic changes in the workforce and employment following the COVID-19 pandemic, with slowdowns in tech sector employment following a spike prior to 2023.
Employment trends differ among regions, with the most pronounced negative trends seen in the technology industry, including the Bay Area and San Diego. Additionally, the San Joaquin Valley region saw the most pronounced loss in job gains, due in part to impacts from weather over the past two years.
The authors describe a reduction in the labor force, noting that a majority of counties with declines in their labor force are in rural counties, due in part to long term population loss trends in some of California’ rural communities. The Bay Area in particular has experienced the most severe decline in its labor force, attributed to the negative trends in the tech sector and an increase in remote work, among other forces.
CSAC and the GFA team will continue to keep counties apprised of new analyses that clarify the outlook for the state’s economy and downstream impacts on state and local budgets. For any questions, please reach out to Eric (elawyer@counties.org) or Stanicia (sboatner@counties.org).
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