Most blankets you buy in the stores are 35 inches or smaller. The size is fine.

35'' to 36'' is standard for a new baby blanket. It is also small enough to use in the car seat as the child grows. It is also enough to cover the baby in a stroller and not drag on the ground or get caught in the wheels. And it is just right to lay the baby on in the crib.
It should be perfect!!