The 2026 Economic Outlook for Santa Barbara County.

I would like to thank our sponsors for their generous support of the UCSB Economic Forecast Project. With their help, we are able to provide timely information to our community and to hire and train undergraduate students in data collection and analysis. I would also like to thank our Board of Directors for their guidance and thoughtful advice. David Marshall, Executive Vice Chancellor at UCSB, deserves special mention for his sustained support of the EFP over the years.

Thanks to Emily Johnson, Associate Director of the EFP, who manages day-to-day operations. Thomas Fullagar and Yuanzhe Liu, Ph.D. students in the Economics Department, oversee data collection and content, and work with the undergrad interns to produce this document.

Before the tariff craziness, the national and local economies were rolling merrily along. The labor market was strong, with unemployment near all-time lows. GDP had been running above its long-term trend. The stock market set daily records along the way.

Then came the announcement of across-the-board tariffs, with many countries facing rates over 50%. The on-again, off-again tariff announcements from the administration have created an enormous amount of anxiety, even dread, in the markets.