Growing at a 3.7% annualized rate during the first quarter of 2026, California’s economy outpaced the growth seen in Texas and Florida, according to an analysis by the California Governor’s Office using data from the U.S. Bureau of Economic Analysis.
Officials said California recorded one of the nation’s fastest quarterly economic growth rates during the period. Texas posted annualized growth of 0.9%, while Florida grew 1.6%, according to the analysis.
Governor Gavin Newsom added that the figures reflect California’s continued investment in innovation, entrepreneurship and workforce development.
“California is the world’s fourth-largest economy, and we’re growing faster because we choose to invest in innovation, talent, entrepreneurship and working people,” Newsom said in a statement.
The governor also said California has focused on reducing costs for families and expanding public investments.
Economic Growth
According to the analysis, California’s annual gross domestic product has increased by more than $1.18 trillion since Newsom took office, reaching $4.25 trillion in 2025. The office said first-quarter 2026 economic output reached an annualized $4.4 trillion.
California remains the world’s fourth-largest economy and continues to rank first among U.S. states in several economic measures, including new business starts, manufacturing output, venture capital investment, high-tech business activity and agricultural production.
State officials said California is home to more than 4.3 million small businesses employing approximately 7.6 million people.
Employment And Productivity
The state added approximately 131,500 jobs over the previous year during the first quarter, the largest increase among U.S. states.
The administration also reported that California’s workforce productivity increased 4.2% in 2025 and accounted for about 14% of U.S. economic output.
Comparison With Other States
According to the governor’s office analysis, California ranked among the nation’s strongest-performing state economies during the first quarter of 2026. Texas tied for 36th among states with 0.9% annualized growth, while Florida ranked 23rd with 1.6%.
The administration also said California added $44.5 billion in economic output during the fourth quarter of 2025, more than New York, Texas or Florida.
State Investments
The report highlighted several state policy initiatives undertaken during the current administration, including: Universal school meals; expansion of transitional kindergarten; increased childcare access; increased funding for public schools; expansion of community schools and student support services; efforts to reduce college costs; expanded health care coverage. Also, investments in behavioral health services; infrastructure investments; clean energy projects; expanded renter protections; expansion of paid family leave and paid sick leave; wage increases for eligible workers; expanded career training and apprenticeship programs; programs supporting veterans and military families; and investments in affordable housing and homelessness response.
