The UCLA Anderson Forecast’s September 2026 outlook reveals a bifurcated economic reality. National growth remains supported by heavy capital spending in AI infrastructure and rising tech equity valuations, which together account for nearly one percentage point of core GDP growth. Despite geopolitical shocks, including the conflict in Iran and subsequent oil price volatility, the national economy has maintained a growth trajectory above 2%.

California’s performance is defined by its dominance in high-productivity industries, particularly venture capital and aerospace. In the second quarter, the state captured 82% of all venture capital investment in the region. However, this growth has failed to translate into job creation. With unemployment hovering above 5% for 31 consecutive months, the state faces a persistent labor demand gap. The forecast suggests that relief for the state’s labor market will likely remain elusive until 2027, when AI-driven hiring and a stabilization in the technology sector are expected to begin offsetting current losses in retail and social services.