If California were a nation, it would be the fifth largest economy in the world. Soon he could become the fourth.
The Golden State is on course to overtake Germany for fourth place, according to an opinion column by Bloomberg News editor emeritus Matthew Winkler. It became the fifth largest economy in 2015, surpassing the UK, France and Brazil.
California Governor Gavin Newsom was quick to take a lap of honor on Monday afternoon.
“While critics often say California’s best days are behind us, reality proves otherwise – our economic growth and job gains continue to fuel the country’s economy,” Newsom said in a statement. . “California’s values and entrepreneurial spirit have propelled this rise to become the world’s fourth largest economy, and we will continue to double down on our efforts in industries of the future, like renewable energy and clean energy. I am extremely proud of California’s resilience, leadership, and formula for success.
Winkler’s column indicates that the trajectory of corporate revenue in California has increased by 147%, while market capitalization has increased by 117% over the past three years, compared to 41% and 34% in Germany.
“Germany’s nominal GDP margin of $4.22 trillion over California’s $3.357 trillion last year was the smallest on record and is on the verge of disappearing, the world’s largest economy. ‘Europe barely increasing in 2022 and expected to decrease in 2023,’ Winkler wrote.
The Bloomberg column cited the difference between California’s top three sectors (hardware, media and software) which have all seen significant increases in sales over the past three years, while Germany’s top three sectors (healthcare, spending Consumer Discretionary and Industrials) experienced marginal gains or declining sales over the same period.
The column notes that California is “making more than its mark on the world stage,” with job creation being a particularly strong area of growth for the state.
Unemployment fell to 3.9% in July, but rose to 4.1% in August.
“The gap separating the state from the US national rate of 3.5% is the narrowest since August 2021 and for the first time since 2006 unemployment in California has plunged below Texas (the two largest states for the non-agricultural payroll)”, according to column .
The column comes as Republicans in California argue that Democratic policies are contributing to the state’s downward decline. They point to the exodus of middle-income people from the state as proof that California’s high tax burden and housing prices are keeping people away.
The California Business Roundtable published its own analysis of the Bloomberg article, saying the state’s high cost of living is leaving residents behind.
He pointed to a Commerce Department index that analyzes purchasing power in different regions. In this so-called price parity index, California’s GDP by purchasing power would make it the 11th largest economy in the world.
“California’s competitiveness is hampered by the current cost of living crisis. Although the state’s GDP may be higher, the high and rising costs of housing, energy, food and other essentials mean that the dollar here does not go as far as in other countries,” the statement from the roundtable reads.
This story was originally published October 24, 2022 4:26 p.m.
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