For three consecutive quarters, the UCLA Anderson Forecast presented two potential scenarios for the U.S. and California economies. One anticipated aggressive inflation-fighting action by the Federal Reserve that would push the economy into a mild, near-term recession. The other allowed for less impact from the Fed’s interest rate increases that would result in a slowing economy and no recession. While many economists held fast to a recession prediction, the Anderson Forecast viewed it as a 50-50 proposition.

In its latest quarterly report, the UCLA Anderson Forecast foresees a weak U.S. economy in 2024, followed by a return to trend growth rates — albeit below trend GDP levels — in 2025. But no recession.

In California, the forecast narrative remains much the same. Throughout 2023, the state’s economy stood at a fork in the road, similar to the the nation, and the possibility of a short-term recession loomed. But California’s economy keeps chugging along —  and growing faster than the nation’s economy — thanks in part to consumers who want to spend and stimulative fiscal policy. As with the national forecast, the current forecast for California sees no recession in the near term.

Read the full UCLA Anderson Forecast news release.