California's economy significantly outpaced Texas and Florida in the first quarter of 2026, growing at an annualized rate of 3.7%, according to a new analysis of U.S. Bureau of Economic Analysis data. This performance reinforces California's position as the world's fourth-largest economy and America's economic engine, contrasting with the 0.9% growth in Texas and 1.6% in Florida during the same period.
Governor Gavin Newsom emphasized California's economic model, stating, "For years, we've heard the same fairytale — California’s economic model doesn’t work, and Texas or Florida are the future. The facts say otherwise. 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." He added that California aims to cut costs for families while Republican-led states ask working families to shoulder more of the tax burden.
California's annual GDP has grown by over $1.18 trillion since Governor Newsom took office, reaching $4.25 trillion in 2025, with first-quarter 2026 output hitting an annualized $4.4 trillion. The state leads in new business starts, manufacturing, venture capital funding, high-tech business, and agriculture, and added approximately 131,500 jobs over the previous year, the largest increase nationwide.
The state's economic success is attributed to investments in areas such as universal school meals, expanded transitional kindergarten, increased childcare access, record public school funding, and significant infrastructure projects. These initiatives, alongside efforts to expand healthcare coverage and protect reproductive freedoms, are presented as California's "recipe for success."