CSUF : CALIFORNIA ECONOMY PUMPED UP BY AI , BUT WEAK HIRING PERSISTS

What happened: Cal State Fullerton economists said California's economy is outpacing the nation on AI and defense spending, while hiring stays weak and consumer sentiment slides. Key numbers: California GDP grew 3.5% in the first half of 2026 versus 2.4% nationally. Why it matters: The economists worry Southern California's job market could suffer if it becomes overly concentrated in AI, especially if the technology boom turns into a bubble. They do not foresee a recession but expect growth to slow and more rate hikes in 2027.

Cal State Fullerton economists said California's economy is outpacing the nation on AI and defense spending, while hiring stays weak and consumer sentiment slides.

The economists worry Southern California's job market could suffer if it becomes overly concentrated in AI, especially if the technology boom turns into a bubble. They do not foresee a recession but expect growth to slow and more rate hikes in 2027.