SACRAMENTO — California’s economy grew at an annualized rate of 3.7% in the first quarter of 2026, outpacing Texas at 0.9% and Florida at 1.6%, according to an analysis of data from the U.S. Bureau of Economic Analysis.

The result marked California’s strongest quarterly growth ranking since 2013 and placed the state among the nation’s fastest-growing economies. Texas tied for 36th nationally, while Florida ranked 23rd.

Governor Gavin Newsom said the figures reflect California’s continued investments in innovation, talent, entrepreneurship and working people. He added that the state would continue pursuing policies aimed at reducing household costs and expanding economic opportunities.

Economic Output Reaches $4.4 Trillion

Since Newsom took office, California’s annual gross domestic product has increased by more than $1.18 trillion, reaching $4.25 trillion in 2025. First-quarter 2026 output reached an annualized $4.4 trillion, following annual GDP gains of more than $200 billion in each of the previous two years.

California, described by state officials as the world’s fourth-largest economy, also led the nation’s four largest state economies in dollar growth during the fourth quarter of 2025. The state added $44.5 billion in economic output, exceeding gains recorded by New York, Texas and Florida.

According to the Governor’s Office, California continues to rank first nationally in:

New business starts;
Manufacturing;
Venture capital investment;
High-tech businesses; and
Agricultural production.

California is home to more businesses than Texas or Florida, including more than 4.3 million small businesses employing approximately 7.6 million people.

Employment and Productivity Growth

During the first quarter of 2026, California had approximately 131,500 more jobs than a year earlier—the largest year-over-year increase of any state.

California’s workforce also recorded a 4.2% productivity increase in 2025, making the state the largest contributor to national productivity growth. The state accounts for approximately 14% of total U.S. economic output.

State officials said the latest figures demonstrate that California remains competitive through its economic scale and leadership in technology, manufacturing, agriculture, entrepreneurship and venture capital.