UCLA Anderson Forecast: Restrained Growth but No Recession in 2024

The first UCLA Anderson economic forecast of 2024 continues the same positive track on which the forecast ended 2023, seeing a diminishing likelihood of a recession nationally and continued strong growth in California. However, the forecast noted that the state faces the same political and geopolitical risks as the U.S. generally.

“The oft predicted but never seen ‘recession next quarter’ possibility has now faded in the face of expansionary fiscal policy, new national industrial policy and a consumer who is happy to continue spending,” according to the forecast. “However, the impact of higher interest rates will be felt in restraining growth in 2024.”

California’s GDP grew at a 3.8% compound annual rate in the first three quarters of 2023 (the latest data available), faster than the U.S. and all but three large states: Washington, Florida and Texas. As in California, Washington’s growth was driven by tech and aerospace, while part of the superior growth in Texas and Florida is attributed to in-migration, with more people moving to those states and working, rather than productivity and income gains.

“With a loss in population in California, per capita income growth continues to rival similar large states across the country,” the forecast states. “While there are still challenges ahead — notably, state and local government finance, homelessness and out-migration — the forces driving California’s economy remain robust.”