The States With the Best and Worst Economies

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46. New Mexico
> 5 yr. GDP annual growth rate: +0.7% (6th smallest increase)
> 2017 GDP: $86.9 billion (14th smallest)
> June 2018 Unemployment: 4.9% (3rd highest)
> 5 yr. annual employment growth: +0.5% (6th smallest increase)

Nearly one in four New Mexico residents live in poverty, the third highest poverty rate of any U.S. state. One of the major causes of high poverty is high unemployment, and this might be the the case in this state. As of June 2018, New Mexico had an unemployment rate of 4.9%, the third highest unemployment rate in the country. The state’s poor job market has shown no sign of improvement in recent years. State employment grew at an annual average of just 0.53% from 2012 through 2017, barely one-third the national annual average employment growth rate of 1.49% over the same period.

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47. Mississippi
> 5 yr. GDP annual growth rate: +0.3% (2nd smallest increase)
> 2017 GDP: $96.8 billion (15th smallest)
> June 2018 Unemployment: 4.7% (tied — 4th highest)
> 5 yr. annual employment growth: +0.7% (11th smallest increase)

Mississippi’s population has remained effectively flat over the last five years. Partially as a result, economic growth in the state has been slow. The state’s GDP grew at annual average rate of just 0.3% from 2012 to 2017, five times slower than U.S. GDP growth rate over the same period. During the last five years, several industries in the state — including construction, mining and logging, and information — have shed jobs. Today, 4.7% of the state’s labor force is unemployed, well above the 3.8% U.S. unemployment rate.

Mississippi is the poorest state in the country — with both the lowest median household income and highest poverty rate among states. The typical household in Mississippi earns just $41,754 a year, nearly $16,000 less than the typical American household, and more than one in every five state residents lives in poverty. Nationwide, 14.0% of the population lives below the poverty line.

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48. Louisiana
> 5 yr. GDP annual growth rate: -0.1% (3rd largest decrease)
> 2017 GDP: $207.9 billion (25th largest)
> June 2018 Unemployment: 4.7% (tied — 4th highest)
> 5 yr. annual employment growth: +0.4% (2nd smallest increase)

Louisiana is one of several states with largely resource-based economies to rank among the bottom five. The state’s employment in resource extraction is higher than the average nationwide, and petroleum refining and petroleum and coal products are far and away the state’s largest exports. The global dip in oil prices in 2014 that continued through 2016 likely hindered economic growth in the state. Over the last five years, the state’s GDP declined by an annual average of 0.1% — the third lowest five-year change of all states. The decline in economic output came despite a 1.8% population increase over the same period.

Joblessness is a considerable problem in Louisiana. The state’s 4.7% unemployment rate is among the highest in the country and well above the 3.8% U.S. unemployment rate.

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49. Alaska
> 5 yr. GDP annual growth rate: -2.2% (the largest decrease)
> 2017 GDP: $47.1 billion (5th smallest)
> June 2018 Unemployment: 7.1% (the highest)
> 5 yr. annual employment growth: -0.3% (3rd largest decrease)

Between 2014 and 2016, the price of a barrel of oil fell by over 50%. For Alaska, a state with some of the largest U.S. oil fields, the economic implications have been huge. Due to unfavorable economic conditions, an oil refinery near Fairbanks, once the largest in the state, was shut down in 2014. Over the last half decade, resource extraction shed a larger share of its workforce every year on average than any other industry in the state. Over the same period, Alaska’s economy contracted at an average rate of 2.2% a year, the largest decline of all states. For reference, U.S. GDP expanded at an average rate of 1.7% a year over the same period. Currently, 7.1% of Alaska’s workforce is unemployed, the highest unemployment rate of any state.

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50. West Virginia
> 5 yr. GDP annual growth rate: +0.5% (4th smallest increase)
> 2017 GDP: $67.8 billion (11th smallest)
> June 2018 Unemployment: 5.3% (2nd highest)
> 5 yr. annual employment growth: -0.4% (2nd largest decrease)

No state population is shrinking faster than West Virginia’s.The state has lost some 2.1% of its population since 2012. A shrinking population can have considerable economic implications — not the least of which is decreased consumer spending. Partially as a result, West Virginia’s GDP has grown at an average annual rate of 0.5% over the last five years, well below the 1.7% average annual growth nationwide.

West Virginia’s relatively high unemployment rate — the 5.3% June rate was the second highest of any state in the country — is due in part to long term employment declines in several industries. For example, employment in the state’s construction industry fell by an annual average of 4.2% in the last five years. Similarly, mining and logging shed an average of 7.1% of its workforce annually since 2012. Wholesale trade and information were also among the industries cutting jobs in the state.