los Angeles County, the economic powerhouse of the United States, is bracing for continued challenges from high living costs and soaring housing prices in 2025.However, a new economic study offers a glimmer of hope, predicting growth in key sectors that could considerably reduce the risk of a recession.
The Southern California Association of Governments (SCAG) released its annual “Southern California Economic Update” on Thursday, projecting a 3.3% growth in Los Angeles county’s gross county product in 2024. This growth is expected to moderate to 2.1% in 2025 and further to 1.3% in 2026.simultaneously occurring, non-farm employment is forecast to dip by 1.2% in 2024 before rebounding with a 0.6% increase in 2025 and stabilizing in 2026.
“As the largest county economy in the United States, Los Angeles County remains a critical economic hub for California, driven by its dynamic industries, including entertainment, technology, international trade and tourism,” the report stated.
The report paints a mixed picture for various sectors. Leisure and hospitality, sectors that suffered immensely during the COVID-19 pandemic, are projected to decline by 4% in 2024 before showing signs of recovery in subsequent years.Manufacturing, on the other hand, is expected to see modest growth, with job increases of 2.3% in 2025 and 2% in 2026.
Transportation and warehousing face headwinds from automation, regulatory shifts, and competition from East Coast ports. Though, the report highlights promising growth potential in healthcare, education, professional services, and technology-related industries.
Despite the county’s ongoing struggles with affordability and economic inequality, public and private investments are expected to provide a much-needed boost. the report emphasizes the crucial role of advancements in renewable energy, technology, and infrastructure in driving future economic growth.
While median household income reached $89,007 in 2023, marking an 18.1% increase since 2003, this progress hasn’t kept pace with inflation for lower- and middle-income households. The individual poverty rate, though slightly down to 13.7% in 2023,remains the second highest within the SCAG region,which encompasses Los Angeles,Orange,Riverside,San Bernardino,Ventura,and Imperial counties.
“The risk of recession is sharply lower than it was a year ago,” said Kome Ajise, SCAG executive director.”Consumers continue to drive the state and regional economies with their spending, and business investment in equipment and software is sharply higher. This should extend into 2025 as interest rates soften,” he added.
## LA County Faces Mounting Economic Headwinds: An Interview with Dr. Emily Carter
**Los Angeles County**,the economic engine of the United States,is facing a perfect storm of challenges. Soaring inflation, rising interest rates, and a potential recession loom large, threatening the county’s remarkable resilience. To better understand the situation,we spoke with Dr. Emily Carter,a renowned economist and professor at the University of California,Los Angeles.
**World-Today-News:** Dr. Carter, Los Angeles County has long been a symbol of economic strength. What are the biggest concerns facing the region right now?
**Dr.Carter:** Los angeles County, despite its historical dynamism, is not immune to national and global economic pressures. The current confluence of factors is indeed worrisome. Inflation is eroding purchasing power, putting pressure on household budgets and ultimately impacting consumer spending. Together, the Federal Reserve’s efforts to combat inflation through interest rate hikes are making it more expensive for businesses to borrow and invest, possibly slowing down economic growth.
**World-today-News:** How are these challenges impacting different sectors of the LA economy?
**Dr. Carter:** The effects are widespread. The housing market, already grappling with affordability issues, is seeing a slowdown in sales and price growth due to higher mortgage rates. The entertainment industry, a major employer in the region, is also feeling the pinch as consumers cut back on discretionary spending.Even the thriving tech sector is facing headwinds, with some companies announcing layoffs amidst concerns about a potential recession.
**World-Today-News:** Can LA County weather this economic storm?
**Dr. Carter:**
While the challenges are important, Los Angeles County has demonstrated remarkable resilience in the past. its diverse economy, strong entrepreneurial spirit, and skilled workforce provide a solid foundation. However, proactive measures are needed to mitigate the impact.
**World-Today-News:** What specific steps can be taken to address these challenges?
**dr. Carter:**
First, targeted support for small businesses and vulnerable communities is crucial. this could include expanding access to affordable capital,providing job training programs,and offering rental assistance. Second, investing in infrastructure projects and diversifying the economy can create new jobs and opportunities. promoting innovation and entrepreneurship can help the region adapt to a changing economic landscape.
**World-Today-news:** Looking ahead, what is your outlook for the LA economy?
**Dr.Carter:** The road ahead will be challenging, but I remain optimistic about LA County’s long-term prospects. The region’s creativity, ingenuity, and resilience will ultimately guide its path towards a more lasting and inclusive economic future. But, decisive action is needed now to navigate the immediate headwinds and set the stage for future success.
