California GDP Grows 3.7% as State Unemployment Hits 5.1%, Highest in U.S.
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Los Angeles – September 30, 2026 -- California's economy expanded at an annualized 3.7% rate in the first quarter of 2026, nearly double the 2.1% national growth rate, even as the state's unemployment rate climbed to 5.1% in August, the highest of any U.S. state, according to the UCLA Anderson Forecast's September 2026 outlook.
California outpaces every state but Washington in growth while shedding jobs by one measure
Over the year ending in the first quarter, California GDP grew 3.3% versus 2.7% nationally. Payroll employment rose by 138,500 jobs over the 12 months through August, but a separate household survey showed 246,700 fewer Californians employed and a 351,100 drop in the labor force over the same period. The state's unemployment rate has stayed above 5% for 31 consecutive months.