WASHINGTON — California’s economic future is full of “many new unknowns” thanks to uncertainty about the incoming Trump administration, a new UCLA Anderson state economic forecast said Wednesday.

While the state’s economy looks healthy, “uncertainty with respect to the current forecast is elevated,” the forecast said.

The forecasters continue to see consumer prices as fairly stable, rising 3.2% this year, 2.6% next year and 2.9% in 2026. Nationally, prices were up 2.7% over the year ending in November, the federal Bureau of Labor Statistics reported Wednesday.

Unemployment in California is expected to remain above the nation’s figure, averaging 5.3% this year, 5.5% next year and 5% in 2026. Those numbers are roughly a percentage point higher than the projected national average.

California’s most recent reported rate, in October, was 5.4%, the second highest state rate in the country. Nevada was first .The national rate was 4.1%.

The UCLA Anderson forecast cited four areas where policy could dramatically shape the state’s economy: Tariffs, immigration, taxes and regulations.

President-elect Donald Trump has vowed to impose tariffs of 25% on goods imported from Canada and Mexico unless each country curbs immigration and drugs that come across U.S. borders from their countries.

Economic experts warn that doing so will help drive up prices and could tighten supplies of certain products.

The forecast said tariffs “would have a significant impact on the state.”

But, it added, “there are negotiations between President-Elect Trump and (Mexico) President (Claudia) Scheinbaum to avoid those tariffs.”

On immigration, Trump has vowed to deport undocumented immigrants. His policies would mean “a withdrawal of millions of undocumented workers from the U.S. labor force either through the deportation process or because they have voluntarily stopped working in high-risk-of-deportation jobs,” UCLA said.

It is uncertain, though, whether there will be the sort of 1942 to 1964 Bracero program that allowed Mexicans to work in this country because of shortages in agricultural fields,

“Even if it were to happen, it likely would only benefit agriculture in the state, as construction, hospitality, health care, daycare, and other services sectors would have a heavier lift getting a similar, large-scale program in place,” the forecast said.

But regarding H1B visas, it predicted, “the emphasis the new administration is expected to place on growth in technology suggests that this will benefit California’s tech industry.”

On taxes, the Trump-era tax cuts due to expire at the end of next year are expected to be extended, so the forecast sees only a minor impact. Any fallout from tax changes, or regulations, also take time to work their way through the system.

“With respect to taxes and regulations, our assumption is that to the extent that they happen, they will have only a minor impact and will take time to be felt,” the report said in its only comment about their potential effect on the state’s economy.

©2024 The Sacramento Bee. Visit at sacbee.com. Distributed by Tribune Content Agency, LLC.