If you find it hard to believe that California’s economy is doing OK in 2026, take a look at a curious state-by-state index tracking business performance.
My trusty spreadsheet looked at monthly indices published by the Federal Reserve Bank of Philadelphia that gauge the relative strength of the 50 state economies, using a mix of job, income, inflation and gross domestic product statistics.
This math shows California’s economy has the third-strongest growth rate among states so far in 2026, expanding at an average annual rate of 3.3% through August.
The only two states growing faster than the Golden State were Nevada, up 3.9%, and Ohio, up 3.4%. In comparison, the median growth rate across all 50 states is 1.8%.
How have California’s major economic rivals fared in 2026? Texas ranked No. 12 for growth at 2.5%, with Florida at No. 26 at 1.8%.
By the way, four states saw economic declines: West Virginia, down 2.1% in a year, Montana, down 0.8%, Connecticut, down 0.7% and Delaware, down 0.3%.
Better than last year
This year so far has been an improvement for California over 2025’s performance, by this math.
And 2025 wasn’t so bad either. The Golden State economy ranked seventh best last year, with an average growth rate of 2.8%. In comparison, the 50-state median was 1.7%.
Last year’s fastest growth states were Nevada, up 3.7%, Idaho, up 3.2% and Texas, up 3%. Florida was No. 9 at 2.5%.
And the bottom of the 2025 scorecard? West Virginia, off 0.2%, and Delaware and Michigan, off 0.4%.
Not alone
California was one of 27 states with 2026 year-to-date performance growth topping 2025.
The Golden State’s 0.6 percentage-point gain in growth rate was 12th best.
The biggest gainers were Ohio, up 2 percentage points, Missouri, up 1.5 points and Iowa, up 1.4 points.
The largest declines were in West Virginia, off 2.3 percentage points, Oklahoma, off 1.7 points and Illinois, off 1.6 points.
California’s rivals saw shrinking growth. Texas ranked No. 37, off 0.5 percentage points, with Florida at No. 41, off 0.7 points.
Historically speaking
The Philadelphia Fed indices date back to 1980, and the long-haul math shows California has the 11th-fastest-growing economy over 46 years, with a 3.2% annual rate of expansion.
So if you’re disappointed about 2026, well, the 3.3% year-to-date gain is just a shade above California’s average. This is not a boom year.
The fastest-growing states since 1980 are a who’s who of places with which California is often compared: Nevada, up 4.5% annually, Arizona, up 4%, Utah, up 3.9% and Florida, up 3.6%. Texas ranked No. 6 at 3.5%.
Ponder what’s typical growth. The 50-state median over 46 years was 2.4%, with the worst performer being Louisiana at 1.2% annual growth, followed by Alaska at 1.5% and Michigan at 1.6%.
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
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