Economy

This Is the State Economy Hit Hardest by COVID-19

Economic output in the United States fell for the first time in over a decade in the first quarter of 2020. The following quarter, gross domestic product declined by 9.5%, by far the largest contraction in over 70 years. Though the U.S. economy rebounded in the third quarter of 2020, GDP is still well below what it was a year and a half ago. In some states, the economic fallout of the COVID-19 pandemic has been far worse.

Using GDP data from the Bureau of Economic Analysis, 24/7 Wall St. determined how each state economy was affected by the COVID-19 pandemic. States are ranked by the percentage change in GDP from the third quarters of 2019 to 2020. In that period, the U.S. economy contracted by 2.8% and only three states reported economic growth. One state, based on these factors, suffered more economic trouble than any other did.

The states that reported the worst economic collapses over the past year tend to be those that rely heavily on industries that were hit especially hard by the COVID-19 pandemic. These industries include oil and gas extraction, which was slammed by falling commodity prices in the face of reduced demand during the pandemic. They also include the accommodation and food services sector and arts entertainment and recreation sector, which suffered considerably as nonessential travel effectively ground to a halt for much of 2020.

In most states, the economic downturn was accompanied by steep job losses. Most states have shed tens of thousands of jobs over the past year, and the unemployment rate in every state is several points higher now than it was at the same time last year. Here is a look at the cities with the worst COVID-19 unemployment crisis right now.

Click here to see the state economies hit hardest by COVID-19.

Hawaii’s economy has been hit the hardest, as determined by these statistics:

> 1-year GDP change: −8.2%
> Fastest growing industry: Utilities (+10.2%)
> Fastest shrinking industry: Arts, entertainment and recreation (−50.9%)
> Nov. 2020 unemployment rate: 10.1%

No state has seen its economy slow down as severely as Hawaii during the COVID-19 pandemic. Hawaii’s third-quarter 2020 GDP was 8.2% lower than it was in the same period of 2019, falling from $82.4 billion to $75.7 billion. The state’s warm weather makes it a popular tourist destination, but with travel restrictions and reduced plane service, the state’s economic output due to tourism was cut in half. The accommodation and food service sector shrank by 43.7%, nearly double the 21.9% decline in that sector nationwide. Hawaii’s manufacturing and wholesale trade GDP both fell by over 10% from the third quarters of 2019 to 2020, the largest declines of any state.

No state lost a larger share of its jobs than Hawaii. The Aloha State’s total employment dropped by 19.4% between 2020’s third quarter and a year before. Its unemployment rate skyrocketed from the third lowest in March 2020, at 2.4%, to the third highest in April 2020, at 23.8%. As of November 2020, it still had the second-highest unemployment rate.