California is world's fourth-largest economy: Here's where other US states rank

 

California has solidified its position as an economic powerhouse, overtaking Japan to become the world's fourth-largest economy with a nominal GDP of $4.1 trillion in 2024, according to data from the International Monetary Fund and the U.S. Bureau of Economic Analysis. This milestone places California behind only the United States ($29.18 trillion), China ($18.74 trillion), and Germany ($4.65 trillion), while surpassing Japan’s $4.02 trillion. Governor Gavin Newsom celebrated the achievement, stating, “California isn’t just keeping pace with the world – we’re setting the pace,” attributing the state’s success to investments in people, sustainability, and innovation.

California’s Economic Dominance

California’s economy, driven by technology, entertainment, agriculture, and manufacturing, has grown at a robust 6% in 2024, outpacing the U.S. overall (5.3%), China (2.6%), Germany (2.9%), and Japan, which saw a decline due to exchange-rate fluctuations and population challenges. With a population of nearly 40 million, California accounts for 14% of the U.S. GDP, far surpassing other states. Its Silicon Valley hosts tech giants like Apple, Alphabet, and Nvidia, while the state leads in agricultural production and manufacturing output.

U.S. States Ranked by GDP

The U.S. Bureau of Economic Analysis (BEA) provides preliminary 2024 nominal GDP data for U.S. states and Washington, D.C., highlighting the economic disparity across the nation. Below is a ranking of the top and bottom states by nominal GDP:

• Top Five States by GDP:
  1. California: $4.080 trillion – The largest state economy, driven by tech, entertainment, and agriculture.
  2. Texas: $2.695 trillion – Fueled by energy, manufacturing, and trade.
  3. New York: $2.284 trillion – A financial hub with strong service and real estate sectors.
  4. Florida: $1.700 trillion – Boosted by tourism, real estate, and population growth.
  5. Illinois: $1.100 trillion – Strong in manufacturing, finance, and agriculture.
• Bottom Five States by GDP:
  1. Vermont: $45.4 billion – Relies on agriculture, tourism, and small-scale manufacturing.
  2. Wyoming: $53.0 billion – Driven by energy and mining but limited by population.
  3. Alaska: $69.8 billion – Dependent on oil, fishing, and tourism.
  4. Montana: $73.2 billion – Agriculture and natural resources dominate.
  5. South Dakota: $75.5 billion – Agriculture and tourism are key contributors.

Economic Trends and Challenges

While California’s growth is impressive, other states like Texas and Florida are also seeing significant economic expansion, with Florida’s GDP placing it among the top 20 global economies. However, smaller states like Vermont and Wyoming face challenges due to their reliance on resource-based industries and smaller populations, limiting their economic output.

Nationally, the U.S. economy grew to $29.017 trillion in 2024, a significant increase from $25.744 trillion in 2022. However, economic forecasts for 2025 suggest potential slowdowns, with some economists predicting a recession due to trade policies, including tariffs, which could impact states like California that rely heavily on international trade. California alone engaged in $675 billion in two-way trade in 2023, and Governor Newsom has expressed concerns about federal tariff policies threatening this progress.

GDP Per Capita Highlights

GDP per capita varies widely across states, reflecting differences in economic productivity and cost of living:

• Highest: New York ($117,332), Massachusetts ($110,561), Washington ($108,468).
• Lowest: Mississippi ($53,061), Arkansas ($60,276), West Virginia ($60,783).

Mississippi, the poorest state, still has a GDP per capita higher than many top European economies, except Germany, highlighting the U.S.’s overall economic strength.

Looking Ahead

California’s ascent to the fourth-largest global economy underscores its critical role in driving U.S. economic dominance, contributing over 14% to the national GDP. However, challenges like high living costs, with median home prices between $773,000 and $850,000, and regulatory pressures have led some companies to relocate to states like Texas. As the U.S. navigates trade uncertainties and economic policy shifts in 2025, California’s ability to maintain its growth trajectory will be closely watched.

For a detailed breakdown of state economies and global comparisons, visit the U.S. Bureau of Economic Analysis .