California's economic growth expected to continue, but slowly and with few jobs gains

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Set us as preferred Boosted by investments in AI, a revitalized aerospace industry and a growing U.S.defense budget, California’s economic growth is expected to continue outpacing the nation, according to a forecast from the UCLA Anderson School of Management.However, tariffs, deportations and high energy prices are likely to somewhat slow growth, though it should pick up next year and in 2028, the fourth-quarter report said.A major weakness, though, has been jobs.

The state’s booming economy has not resulted in broad employment gains, a disappointing trend expected to continue the rest of the year.California added only 138,500 jobs in the 12 months ending in August, with its unemployment rate standing at 5.1% that month, one point higher than the national average.“California’s new bifurcated economy is not one between East and West, but one between AI, Aerospace and the like and the rest of the economy,” senior economist Jerry Nickelsburg said in the report released this week.“But a rising tide does not necessarily lift all boats, particularly when that tide is fundamental technological change.

There remain signs of concern in labor markets,” he said.Hollywood Inc.

Dozens of family businesses that serve Hollywood have closed down in recent years, squeezed by a historic falloff in local production activity.With final figures in, the report notes that the state’s economy grew at a 3.7% rate in the first quarter, substantially higher than the 2.1% rate of the overall U.S.economy.The high growth rate exemplifies the state’s rich concentration of high-tech and other high-productivity industries.

Six of the 10 largest venture capital investments during the first quarter were in the San Francisco area, while in the second quarter, 82% of all venture capital investment went to California, according to the report....