Hollywood is planning a “return to film and television production”! The “soft landing” of the US economy ushered in a blueprint of 249.1 billion US dollars in film and television incentives

The Zhitong Finance App learned that several recent economic data show that the US economy is still actively expanding, and employment data also preserves the possibility of the US economy moving towards a “soft landing” that US President Trump and the Federal Reserve have in mind. In the second quarter of 2026, real GDP increased 1.5% month-on-month; in August, non-farm payrolls increased by 162,000 people, and the unemployment rate remained 4.1%. These data show that the economy is still resilient; however, the monthly improvement in employment is not enough to establish a continued strong trend: non-farm payrolls increased by only 31,000 and 21,000 in June and July after the revisions, which is why in the opinion of some economists, it is not yet possible to announce that the soft landing process has been completed.

In this context, the government film and television incentive plan or plan proposed by the American Film Association focuses on increasing employment and income in specific industries and their supply chains by attracting the return of production activities. This film and television incentive measure may boost the US economy by 249 billion US dollars and thereby strengthen the expected “soft landing” trajectory of the US economy.

Did $249.1 billion help America's soft landing?

Consumer spending is still an important support for the US economy. Its share of GDP is about 70%, or 68.0% in the second quarter of 2026. Currently, US consumer spending growth is still very resilient. Actual disposable income increased 0.4% month-on-month in July, but actual personal consumption expenditure remained basically the same; overall and core personal consumption expenditure price indices rose 3.7% and 3.3% year-on-year respectively during the same period. As a result, income growth can still support purchasing power, but the decline in inflation and the sustainability of consumption momentum still need to be observed.

If film and television projects bring in additional employment, equipment leasing, lodging, and catering purchases, they may support local consumption through labor income and supplier income. This is also a direct link between industrial incentives and a consumption-oriented economy.

The American Film Association (MPA) commissioned consulting firm Olsberg SPI to conduct the “Economic Impact of Proposed US Federal Film and Television Production Incentives” study to thoroughly evaluate the economic impact of the proposed federal film and television production tax credit. The study compared the two scenarios of “implementing incentives” and “not implementing incentives”. Under the assumption that tax incentives would attract more production activities to the US, it estimated how additional production expenses would drive supplier business, employment, and labor income, and have a further impact through the consumption of relevant personnel. This is also a specific link between film and television incentives and employment and consumption.

The transmission logic of this study is to compare the costs of changing production sites with tax credits, and then measure the impact of additional spending along the supply chain. The original report used the 20% transferable tax credit assumption, limited eligible expenses to US residents' labor expenses, and set additional incentives; this helps to understand why the industry sees it as a tool to compete with the UK and Australia for production projects. Research estimates that production expenses can be increased by US$125.3 billion from 2027 to 2035, and a cumulative value-added contribution of US$249.1 billion will be generated through direct production activities, supplier business, and reconsumption of labor income, including US$133.1 billion in labor income. The research institution further clarified that 143,500 jobs refer to full-time equivalent jobs created and supported on average each year.

US$249.1 billion covers the nine years from 2027 to 2035. The simple average is about US$27.68 billion per year, and this average value does not mean that the study assumes the same annual contribution; as a quantitative reference, the nominal GDP equivalent annualized economic scale of the US in the second quarter of 2026 was as high as US$32.49 trillion. Furthermore, the study uses a scenario where the US share of global production expenditure covered by it rises to 65%, so the final outcome for the US economy depends on whether the return of production can reach the expected positive scale and spread to a wider range of sectors of the economy. This forecast report can show the potential contribution of the expansion of industry activity, but it does not measure the probability of a soft landing in the US, nor can it be used to prove that the current economy has completed a soft landing.

Hollywood prepares for a return of film and television production

According to this research report, which is supported by major Hollywood studios, film and television incentives may boost the US economy by 249 billion US dollars.

However, as mentioned above, the specific macroeconomic effects also depend on the relationship between additional activities and fiscal costs. The California Office of Legislative Analysis's evaluation of state-level film and television credits found that incentives can attract production projects, but the gap between expanding the film and television industry and increasing net revenue for the entire economy is also due to factors such as reduced tax revenue, opportunity costs for other uses, and resource substitution.

State-level findings are also no direct substitute for an evaluation of federal programs. For investors, the observable results of the return of film and television are US production orders, studio and equipment utilization rates, and the actual costs and cash flow of production companies after deducting credits. Only when policies are implemented and converted into new business can the profit impact of related companies be conditionally verified; achieving a soft economic landing across the US still requires continuous support from employment, actual consumption, and inflation data.

Overall, a recent study commissioned by the American Film Association shows that federal incentives for film and television production could contribute $249.1 billion to the US economy by 2035 and add 143,500 new full-time jobs.

The American Film Association represents the interests of major production companies, including Walt Disney Company and Netflix, and has been cooperating with Hollywood trade unions to take the lead in promoting national incentives to better compete with markets such as the UK and Australia. With generous tax rebates and favorable exchange rate conditions, the share of film and television production received by these markets is constantly growing.

“Federal incentives will change the landscape of our industry,” American Film Association CEO Charlie Rivkin said in a statement.

The trade association, union, and actor Jon Voight have been pushing for the Film, Television, and Entertainment Revitalization Act, which would establish federal tax credits for film and television production. Voight was appointed as one of President Donald Trump's Hollywood envoys last year. Trump announced his support for the initiative earlier this month and said in a social media post that it would help “return this once glorious industry to America.”

The study was co-conducted by consulting firm Olsberg SPI and was supported by the American Film and Television Production Federation, including the American Film Association. The study found that federal incentives could bring in a total of $133.1 billion in additional labor income between 2027 and 2035, and increase production spending by $125.3 billion over the same period.

The study was based on a 20% credit, transferable tax credit, which also included additional incentives for independent films and films shot in areas affected by natural disasters.

Other studies, including those conducted by the Mackinaw Center for Public Policy, the Revenue Foundation, the Mocats Center, and the Georgia Department of Audit and Accounts, concluded that incentives offered by states were not cost-effective or had a lasting impact on employment.