CALIFORNIA – The UCLA Anderson Forecast announced October 2, that their annual forecast report showed California will ultimately experience a full year of sub-par growth in 2024 followed by two years of higher than US growth.
The report says that this slower growth is the result of specific sectoral weaknesses in California, evidenced by its high unemployment rate.
“In 2023, California’s GDP grew at a 3.7% compound annual rate, which was faster than the nation’s and all but three states: Washington, Florida and Texas,” said the report.
However, they go on to say that the growth rate in the second quarter of 2024 was 2.8% on an annual basis, 0.2% points less than the U.S. growth rate.
California’s jobs increased by 418,400 jobs
The household survey reported that the number of people employed in August 2024 was 2.1% below the number employed at the pre-pandemic peak.
However, over the same period, California’s non-farm payroll jobs increased, and they now exceed the pre-pandemic level by 418,400 jobs.
Non-farm payroll data is used as a key economic indicator because it excludes the highly seasonal nature of farm jobs, offering a more consistent view of employment trends.
The forecasters pointed out that many of the new jobs are in different areas than where the most job losses occurred.
In the logistics, technology, construction, education, government, health care and social services sectors, job creation makes up the bulk of the increase.
Immigration and onshoring of technical manufacturing could drive growth
The forecasters say that the California economy is expected to grow faster than the national economy in 2025 and 2026, but not by much.
“The risks to the forecast are political and geopolitical, and, on the downside, the interest rates could potentially still disrupt the current expansion and, on the upside, international immigration and accelerated onshoring of technical manufacturing could increase growth,” said the report.
For more information about the UCLA Anderson Forecast visit https://www.prnewswire.com/news-releases/ucla-anderson-forecast-sub-par-growth-for-california-in-2024-followed-by-banner-years-for-us-and-ca-gdps-302264946.html
