<!-- Creative Commons Attribution-NonCommercial-NoDerivatives https://creativecommons.org/licenses/by-nc-nd/4.0/ --></p> <p>from <a href=""https://calmatters.org/author/levi-sumagaysay/"" title=""Posts" by="" levi="" sumagaysay="" class=""author" url="" fn="" rel=""author"">Levi Sumagasai</a>CalMatters</p> <figure> <img decoding="async" width=""1200"" height=""800"" src=""https://i0.wp.com/calmatters.org/wp-content/uploads/2025/11/021225_Port-of-LA_JAJ_CM_06.jpg?fit=1200%2C800&ssl=1"" class=""attachment-post-thumbnail" size-post-thumbnail="" wp-post-image="" alt=""A" wide="" view="" of="" several="" semi-trucks="" exiting="" a="" port="" after="" picking="" up="" shipping="" containers.="" decoding=""async"" srcset=""https://i0.wp.com/calmatters.org/wp-content/uploads/2025/11/021225_Port-of-LA_JAJ_CM_06.jpg?w=2000&ssl=1" https:="" sizes=""(max-width:"/><figcaption>Semi trucks exit the Yusen terminals at the Port of Los Angeles in San Pedro on February 11, 2025. Photo by Joel Angel Juarez for CalMatters</figcaption></figure> <p>This story was originally published by <a href=""https://calmatters.org/"">CalMatters</a>. <a href=""https://calmatters.org/subscribe-to-calmatters/"">Sign up</a> for their newsletters.</p> <p>California is ending the year much the same way it began: uncertain what impact President Donald Trump’s policies and actions will have on its economy. </p> <p>Immigrant incursions and the threat of them have negatively impacted state residents, communities, and labor markets in various industries. Agricultural workers and farmers are <a href=""https://calmatters.org/economy/2025/11/immigration-california-farms/"">anxious about the future</a>. Citizens and non-citizens of Los Angeles and surrounding areas lost their jobs after the attacks, according to <a href=""https://calmatters.org/economy/2025/07/immigration-raids-california-jobs/"">a study</a>. </p> <p>California, home to some of the busiest in the nation <a href=""https://calmatters.org/economy/2025/05/tariffs-california-ports/"">ports</a>they had to deal with constantly changing tariffs. The <a href=""https://calmatters.org/economy/2025/04/tariffs-california-agriculture-wine/"">agricultural</a> and <a href=""https://calmatters.org/economy/2025/08/california-european-wines-tariffs/"">wine industries</a> worried about higher costs and their ability to maintain relations with their export partners, who received not only tariff threats but other presidential rhetoric. For example, Trump’s talk of annexing Canada has angered some Canadians and affected them <a href=""https://calmatters.org/economy/2025/04/california-tourism-canada/"">tourism</a> in the state and the rest of the nation. </p> <p>The technology industry deals with <a href=""https://calmatters.org/economy/2025/10/silicon-valley-h1b-visas-trump/"">a mix of policies</a> this included Nvidia agreeing to share revenue with the federal government; US acquires stake in Intel; and new fees for H-1B visas. Yet the buzz around artificial intelligence has mostly been a boon for the industry, especially the big tech that helped <a href=""https://lao.ca.gov/LAOEconTax/Article/Detail/777"">direct tax revenues to the state treasury</a>.</p> <p>Property insurance also has a large effect on California’s economy. For years, insurers have avoided writing policies in the state, citing an increased risk of wildfires. Insurance Commissioner Ricardo Lara this year <a href=""https://calmatters.org/economy/2025/01/la-fires-california-insurance/"">new regulations introduced</a> was meant to encourage companies to resume writing policies, but the fires in Los Angeles County in January compounded the problem. Now fire survivors are complaining that insurers are trying to raise rates while delaying or denying claims, and are <a href=""https://calmatters.org/economy/2025/11/fire-survivors-lara-resign/"">called on Lara to resign</a>. </p> <h2>Outlook for 2026 </h2> <p>The higher costs, due in part to cuts in federal funding, mean nearly $18 billion <a href=""https://calmatters.org/politics/2025/11/california-budget-lao-forecast/"">budget deficit</a> next year, the Legislative Analyst’s Office predicted. This may include attempts to fill gaps in spending on <a href=""https://calmatters.org/health/2025/10/california-gives-planned-parenthood-140-million-boost-to-keep-clinics-open/"">healthcare</a>, <a href=""https://calmatters.org/education/k-12-education/2025/08/immigrants-california/"">education</a>, <a href=""https://calmatters.org/housing/homelessness/2025/10/ca-federal-homeless-housing-cuts/"">housing for the homeless</a> and more. <br />The state’s unemployment rate hovered above 5 percent and was among the nation’s highest for most of 2025. The outlook for the U.S. labor market next year is mostly bleak, with economists at job website Indeed predicting a possible continuation of what they called a “frozen” labor market. Similarly, Wells Fargo economists said in late November that a “stagnant labor market” was a factor in the drop in consumer confidence. In tech and other industries, the double-edged sword that is the AI boom may continue to be a factor in <a href=""https://techcrunch.com/2025/11/26/tech-layoffs-2025-list/"">abbreviations</a>. On the immigration front, continued crackdowns could have the biggest impact on the nearly 3.3 million Latino immigrants who make up 16 percent of the state’s workforce, according to UCLA’s Institute on Latino Politics and Policy.</p> <p>This article was <a href=""https://calmatters.org/economy/2025/12/year-in-review-2025-economy/"">originally published on CalMatters</a> and is republished under <a href=""https://creativecommons.org/licenses/by-nc-nd/4.0/"">Creative Commons Attribution-NonCommercial-No Derivatives</a> license.</p> <p> Copy the HTML
