California experiences significant decline in consumer spending, marking the second-largest decrease in the United States.

In recent years, California has experienced a notable decline in consumer spending growth, highlighting the financial strains felt by residents across the state. Data reveals that California recorded the second-largest slowdown in spending growth nationwide, trailing only behind Oregon. This analysis is derived from a comparison of total expenditures from 2015 to 2025 against the previous six years leading up to 2019, a period that encompassed the economic recovery following the Great Recession.

According to the Bureau of Economic Analysis, which provides annual estimates of consumer spending, Californians spent approximately .8 trillion in 2025, representing 13% of the nation’s overall consumer spending of .9 trillion. This ranking is consistent with the state’s substantial population and economic output. However, when examining the growth of consumer spending in California post-pandemic, a more complex picture emerges.

The period from 2019 to 2025 experienced a 16% increase in consumer spending after adjusting for inflation, ranking California’s growth rate as the 29th lowest among the states. In stark contrast, during the pre-pandemic years from 2013 to 2019, the state enjoyed a much more robust growth of 24%, positioning it as having the seventh-fastest spending growth in the nation, outpacing the national average of 17%. This indicates a drop-off of eight percentage points in consumer spending growth over the past six years compared to the more prosperous years prior to the pandemic.

Several factors may account for this spending stagnation in California. Rising living costs have likely led many residents to tighten their budgets, focusing their expenditures primarily on essential goods and services. The state’s high cost of living has also contributed to a sluggish influx of new residents, limiting the potential growth of the consumer base.

The implications of this decline in spending growth extend beyond consumer behavior, affecting local merchants and service providers who rely on robust spending to sustain their businesses. As California navigates these economic challenges, understanding the underlying factors influencing consumer behavior will be essential for policymakers and businesses alike in crafting strategic responses to stimulate economic activity in the state.