State’s economy hits a bump in the road

California’s economy is slowing down.

Unemployment is rising, growth has cooled, housing is still too expensive and difficult to build, and energy prices are higher than in most parts of the country, according to Beacon Economics in Los Angeles.

To be sure, California is not relinquishing its status as a global superpower.

It’s the fourth-largest economy in the world behind the United States, China, and Germany, and ahead of Japan, which it passed last year.

The state also remains a rare blend of technology, entertainment and agriculture, with a workforce of 19.2 million. It also remains one of the most influential state economies, accounting for roughly 14 percent of the $29.2 million US GDP.

But the most recent economic data compiled by Beacon shows California’s economy “cooling” because of slow growth, rising costs associated with doing business and layers of regulation that accumulated over time.

“California has absorbed more than most states – more wage floors, more housing-production policy, and more rent rules, all of which amount to more pressure,” said Nike Kodaverdian, research manager at Beacon Economics and the author of its Fall 2025 analysis of California’s economy, released Oct. 1.

“But even California has its limits.”