UCLA Anderson Downgrades California Forecast Again

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According to the recently released UCLA Anderson Forecast, its “September 2026 California outlook is slightly weaker than the June forecast, largely because of continued disruption in energy markets”. The Forecast’s authors project continued economic growth for the state, but “inferior employment performance”. They note that the sectors that have driven state payrolls thus far in 2026, notably health care and social services, education and retail, are not expected to continue to support the state’s labor market going forward as “government budget constraints, reductions in federal support for health care and continued deportations are expected to limit hiring in several of those areas”. The authors expect a California weak labor market in 2026, with recovery in 2027 and 2028. They project nonfarm payroll growth of 0.9% in 2026, 1.2% in 2027, 2.2% in 2028.


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