A significant chill in consumer spending shows us that many Californians were feeling financially pinched in recent years.<\/p>\n
The state saw the nation\u2019s second-largest slowdown in spending growth over the past dozen years. Only Oregon had a bigger drop.<\/p>\n
My trusty spreadsheet<\/a> discovered this financial distress when comparing changes in total expenditures \u2014 the six years ending in 2025 vs. the previous six years through 2019.<\/p>\n Ponder data from the Bureau of Economic Analysis, which estimates how much consumers spend each year<\/a>. Total consumer activity \u2013 involving goods and services, including housing \u2013 reflects each state\u2019s overall economic growth, changes in population and jobs, and wealth creation.<\/p>\n Start with Californians. They spent $2.8 trillion in 2025, the most in America, accounting for 13% of the nation\u2019s $20.9 trillion in expenditures.<\/p>\n That top ranking is not surprising, given the state\u2019s massive population. Economic progress is measured by the change in consumer spending.<\/p>\n Adding perspective<\/p>\n Spending levels in 2025 were compared to what we might call the good ol\u2019 days \u2013 2019, just before the pandemic rearranged the economy.<\/p>\n And to put that growth in perspective, that span was compared with the previous six years, when consumers were recovering from the Great Recession\u2019s economic wallop.<\/p>\n These two periods had very different inflation climates. So, spending growth was adjusted for inflation, as measured by the U.S. Consumer Price Index. This inflation gauge rose 26% over the past six years, compared with a 10% rise in the previous six years.<\/p>\n All this math shows California spending grew by 16% after inflation in the past six years. That was only the 29th-largest jump among the states and trailed national spending, which grew 19% over six years.<\/p>\n However, back in the pre-pandemic days, California was near the top of the charts.<\/p>\n Statewide spending grew by 24% after inflation. That ranked California\u2019s growth as the seventh-fastest among states in the six years ended in 2019, as it also topped the nation\u2019s 17% pace.<\/p>\n Steep drop<\/p>\n Look at the tumble for Golden State spending this way.<\/p>\n Contrast the recent 16% spending growth against the 24% jump over the previous six years. That\u2019s an eight percentage-point drop.<\/p>\n And California was just one of 13 states with a declining growth rate.<\/p>\n Why did California shopping stall?<\/p>\n It\u2019s a good guess it\u2019s about challenged checkbooks. Many Golden Staters likely found themselves cash-strapped and pulled back on buying anything other than the essentials.<\/p>\n It\u2019s probably also about the population, too. Other Americans, knowing California\u2019s high cost of living, didn\u2019t move here. So there was little growth in the number of shoppers.<\/p>\n Don\u2019t forget that shrinking spending growth is also bad news for the folks who sell stuff to California consumers, the state\u2019s merchants and service providers.<\/p>\n Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com<\/a><\/p>\n Try Jonathan Lansner\u2019s Substack collection of economic trends. CLICK HERE<\/a>!<\/p>\n September\u2019s most popular Southern California real estate stories \u2026<\/p>\n No. 1: Taco Bell relocation of its longtime Irvine headquarters <\/a><\/p>\n No. 2: Diane Keaton\u2019s former Laguna Beach flip lists for $10 million<\/a><\/p>\n No. 3: What\u2019s the best housing market in Southern California? <\/a><\/p>\n No. 4: Dolly Parton\u2019s former Solvang cottage compound lists for $2 million <\/a><\/p>\n No. 5: Newport Coast home linked to Latin music star Peso Pluma seeks $14 million<\/a><\/p>\n No. 6: Ultra-luxe, \u2018overengineered\u2019 beachfront Dana Point estate seeks $65 million <\/a><\/p>\n No. 7: California wants more fines against Huntington Beach in housing lawsuit <\/a><\/p>\n No. 8: Laguna Cliffs Marriott Resort rebrands amid renovation <\/a><\/p>\n No. 9: Historic Dana Point home by Hollywoodland developer lists for $2.2 million<\/a><\/p>\n No. 10: Newport Beach waterfront estate with multi-boat dock lists for $58 million<\/a><\/p>\n No. 11: Costa Mesa approves plan to replace Fairview Center with 2,300 new homes <\/a><\/p>\n No. 12: 2-year-old Zia apartment complex sells in Anaheim <\/a><\/p>\n