The States With the Best and Worst Economies

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Source: Wikimedia Commons

20. Wisconsin
> 2016 GDP: $273.14 billion (20th largest)
> 5 yr. GDP annual growth rate: 1.3% (tied–22nd smallest growth)
> Unemployment: 3.1% (9th lowest)
> 5 yr. annual employment growth: 1.2% (19th slowest growth)

Just 3.1% of Wisconsin’s workforce is unemployed, and only 12.1% of residents live in poverty — far less than the corresponding national rates. While relatively few residents struggle with poverty and unemployment, economic growth in Wisconsin has trailed that of the U.S. economy since 2011. Wisconsin’s workforce is concentrated in slow-growing industries such as manufacturing and is poorly represented in fast-growing industries like professional services. Some 16.4% of workers in the state are employed in the manufacturing industry, the second largest share of all states. The industry curbed the state’s economic growth more than any other sector in 2016.

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19. Iowa
> 2016 GDP: $157.72 billion (21st smallest)
> 5 yr. GDP annual growth rate: 2.0% (11th largest growth)
> Unemployment: 3.1% (9th lowest)
> 5 yr. annual employment growth: 1.2% (17th slowest growth)

Iowa’s 2.0% annual GDP growth rate between 2011 and 2016 is exactly in line with economic growth nationwide. As was the case in many states, the manufacturing sector presented the largest drag on Iowa’s economy in 2016. However, major gains in agriculture and finance were more than enough to offset economic losses attributable to manufacturing.

With an unemployment rate of only 3.1%, joblessness is not a major problem in Iowa. Only six states have a lower unemployment rate than Iowa.

Source: Wikimedia Commons

18. Idaho
> 2016 GDP: $59.69 billion (9th smallest)
> 5 yr. GDP annual growth rate: 1.9% (tied–13th largest growth)
> Unemployment: 3.2% (13th lowest)
> 5 yr. annual employment growth: 2.5% (8th fastest growth)

Idaho’s annual compound employment growth rate of 2.5% between 2011 and 2016 is among the highest of any state. Due in part to rapid employment growth, only 3.2% of the state’s labor force is jobless, well below the 4.3% U.S. unemployment rate.

In 2016, the construction sector contributed 0.59 percentage points to total GDP growth in Idaho, the highest such share of any state. The uptick in construction was likely driven in large part by new home construction. New housing starts are up 22.5% in Idaho from the year prior, one of the largest increases of any state.

Source: Thinkstock

17. Texas
> 2016 GDP: $1.50 trillion (2nd largest)
> 5 yr. GDP annual growth rate: 3.9% (2nd largest growth)
> Unemployment: 4.8% (12th highest)
> 5 yr. annual employment growth: 2.5% (7th fastest growth)

Texas is the second largest state by population and land area, and the second largest economy. The size of the state’s economy is due in no small part to its immense crude oil and natural gas reserves. No U.S. state produces more energy than Texas. The industry also pays well in Texas. The average resources and mining worker earns $110,430 a year, approximately twice the industry average nationwide and the second highest average annual wage for the industry of all states.

The state’s unemployment rate of 4.8% and poverty rate of 15.9% are each higher than the corresponding national rates, which indicates the state’s economy may not be as favorable to residents as its growth rate and size would suggest.

Source: Wikimedia Commons

16. Vermont
> 2016 GDP: $27.45 billion (the smallest)
> 5 yr. GDP annual growth rate: 0.3% (2nd smallest growth)
> Unemployment: 3.1% (9th lowest)
> 5 yr. annual employment growth: 0.8% (7th slowest growth)

The percentage of Vermont adults who have a bachelor’s degree, at 36.9%, is seventh highest of all states. The high level of education likely helps to maintain a relatively low unemployment rate in the state, which at 3.1% in May was the seventh lowest nationwide. While Vermont’s economy is small and growing slowly, a relatively small share of residents in the state struggle with financial hardship. For example, the state’s poverty rate of 10.2% is third lowest of U.S. states.