Updated · Office of Governor Gavin Newsom · Jun 29
California Workers Lift 2025 Productivity 4.2%, Driving Nearly One-Third of U.S. Gain
Updated
Updated · Office of Governor Gavin Newsom · Jun 29
California Workers Lift 2025 Productivity 4.2%, Driving Nearly One-Third of U.S. Gain
3 articles · Updated · Office of Governor Gavin Newsom · Jun 29
Summary
California workers raised private-sector nonfarm productivity 4.2% in 2025, the biggest contribution from any state to U.S. productivity growth.
That increase accounted for nearly one-third of the nation’s 1.8% productivity gain, even though California represents about 14% of national output.
Only 2 states posted productivity gains above 4%, and California paired that performance with 131,534 jobs added over the past year—the most of any state.
California’s broader economy also extended a 16-year growth streak in 2025, while four of the nation’s fastest-growing job markets were in the state through early 2026.
In 2025, California saw a major boost in productivity as firms across many industries rapidly adopted artificial intelligence. Businesses integrated AI into core functions like research, operations, and sales, leading to significant time and cost savings. AI was used to develop new crops in agriculture, automate routine healthcare tasks, and scale work in IT and finance. These changes allowed companies to streamline operations and shift tasks from humans to AI, resulting in both efficiency gains and workforce adjustments. Research confirmed that AI automation brought cost efficiencies across sectors, marking a transformative year for California’s economy.