The States With the Best and Worst Economies

Source: John Fowler / Wikimedia Commons

40. Nevada
> 2016 GDP: $128.83 billion (18th smallest)
> 5 yr. GDP annual growth rate: 1.2% (tied–19th smallest growth)
> Unemployment: 4.7% (13th highest)
> 5 yr. annual employment growth: 2.9% (4th fastest growth)

Employment climbed at an annual rate of 2.9% in Nevada over the last five years, one of the strongest improvements of any state and well above the 1.9% annual U.S. employment growth rate. Despite strong job growth, some 4.7% of Nevada’s workers are unemployed, slightly higher than the 4.3% U.S. unemployment rate.

No state economy is as dependent on tourism as Nevada’s, and the accommodation and food services industry detracted 0.2 percentage points from the state’s GDP growth last year. The highest growth industries in the coming years will require a college education, and only 23.6% of adults Nevada have at least a bachelor’s degree, one of the smallest shares among states.

Source: John Phelan / Wikimedia Commons

39. Arizona
> 2016 GDP: $267.47 billion (21st largest)
> 5 yr. GDP annual growth rate: 1.6% (tied–18th largest growth)
> Unemployment: 5.1% (4th highest)
> 5 yr. annual employment growth: 2.4% (10th fastest growth)

Employment increased at an annual rate of 2.4% in Arizona between 2011 and 2016, a more rapid improvement than in the vast majority of states. Despite the increase in available jobs, Arizona is one of only four states with an unemployment rate above 5%.

Pervasive financial hardship can be a symptom of a weak economy. In Arizona, 17.4% of residents live in poverty compared to only 14.7% of all Americans.

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38. Ohio
> 2016 GDP: $552.46 billion (7th largest)
> 5 yr. GDP annual growth rate: 1.6% (tied–18th largest growth)
> Unemployment: 4.9% (7th highest)
> 5 yr. annual employment growth: 1.4% (23rd slowest growth)

Ohio is one of many states in the Appalachian Region where residents struggle with high unemployment and slow economic growth. The state’s unemployment rate of 4.9% is higher than the 4.3% national jobless rate. And unemployment could get worse. Relatively few workers in Ohio are employed in fast-growing industries such as information, while employment in the state is highly concentrated in the shrinking manufacturing industry. Some 12.9% of workers in the state are employed in the manufacturing industry, the eighth largest share nationwide. In 2016, the durable goods manufacturing industry detracted more from Ohio’s GDP growth rate than any other sector.

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37. Pennsylvania
> 2016 GDP: $651.96 billion (6th largest)
> 5 yr. GDP annual growth rate: 1.8% (tied–15th largest growth)
> Unemployment: 5.0% (5th highest)
> 5 yr. annual employment growth: 0.7% (5th slowest growth)

Pennsylvania is one of only a dozen states where annual employment growth averaged less than 1.0% per year between 2011 and 2016. The state’s slow job growth may partially explain the higher than average jobless rate. Some 5.0% of Pennsylvania’s workers are unemployed, and another 10.6% are underemployed. This is well above the corresponding 4.3% and 9.6% unemployment and underemployment rates nationwide.

Like many states with lagging economies, Pennsylvania is more reliant on manufacturing than the country as a whole. Pennsylvania’s manufacturing sector was a drag on economic growth in the last year.

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36. Connecticut
> 2016 GDP: $230.72 billion (23rd largest)
> 5 yr. GDP annual growth rate: 0.2% (the smallest growth)
> Unemployment: 4.9% (7th highest)
> 5 yr. annual employment growth: 0.7% (4th slowest growth)

While Connecticut is one of the wealthiest and most well-educated states, outbound migration and high unemployment have weakened the state’s economy in recent years. Since 2011, the number of jobs in Connecticut has increased by only 0.7% each year on average, the sixth slowest employment growth of any state. The BLS estimates that 10.8% of Connecticut workers are unemployed, discouraged from seeking employment, or working a part-time job after failing to find full-time employment, the eighth highest underemployment rate of any state.