The States With the Best and Worst Economies

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26. North Carolina
> 5 yr. GDP annual growth rate: +1.7% (15th largest increase)
> 2017 GDP: $459.3 billion (10th largest)
> June 2018 Unemployment: 4.2% (tied — 18th highest)
> 5 yr. annual employment growth: +1.7% (14th largest increase)

North Carolina ranks towards the middle of the country in a number of measures of economic health. State GDP grew at an average rate of 1.7% a year from 2012 to 2017, in line with the national growth rate. The sector with the largest contribution to GDP growth last year was nondurable goods manufacturing. Like the nation as a whole, the largest drag on the economy was the finance and insurance sector. The Charlotte metro area in particular reported a large decline in its substantial banking sector over the past five years.

While steady economic growth has helped reduce unemployment in North Carolina over the past several years, the share of unemployed workers in the state remains slightly above the national average. Some 4.2% of the N.C. workforce is unemployed, compared to the 3.8% national unemployment rate.

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27. Maine
> 5 yr. GDP annual growth rate: +0.9% (16th smallest increase)
> 2017 GDP: $52.8 billion (8th smallest)
> June 2018 Unemployment: 2.9% (tied — 7th lowest)
> 5 yr. annual employment growth: +0.7% (9th smallest increase)

Maine ranks in the bottom half of states for its overall economic health. Job growth is an important indicator of an economy’s ability to attract new businesses, but Maine’s employment grew at a 0.9% annual average rate over the last five years, barely half the national annual growth rate over the last half decade. The lack of job growth in the area accompanies a relatively small population increase in the state. Since 2010, the state’s population has risen by just 0.6%, the sixth smallest increase in the country over that time.

Despite slower than typical growth, a relatively small share of Maine’s workforce are out of a job. The state’s 2.9% unemployment rate is one of the lowest of any states and well below the 3.8% national rate.

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28. Connecticut
> 5 yr. GDP annual growth rate: -0.3% (2nd largest decrease)
> 2017 GDP: $224.7 billion (23rd largest)
> June 2018 Unemployment: 4.4% (12th highest)
> 5 yr. annual employment growth: +0.4% (3rd smallest increase)

Connecticut’s GDP contracted by an average of 0.26% a year from 2012 to 2017, the second largest decline of any state. Meanwhile, economic output across the United States as a whole climbed by an average of 1.69% a year over the same period. The state’s declining economic output is partially attributable to population decline. Over the last half decade, the state’s population contracted by 0.3%, one of the steepest declines of any state. Today, Connecticut’s 4.4% unemployment rate is higher than the 3.8% national jobless rate.

Despite negative growth and high unemployment, Connecticut is a relatively affluent state. The typical household in the state earns $73,433 a year, nearly $16,000 more than the typical American household.

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29. Tennessee
> 5 yr. GDP annual growth rate: +2.0% (11th largest increase)
> 2017 GDP: $297.8 billion (19th largest)
> June 2018 Unemployment: 3.5% (tied — 17th lowest)
> 5 yr. annual employment growth: +1.7% (13th largest increase)

Over the last five years, the Tennessee economy grew at an average rate of 2.0% a year, faster than the 1.7% national growth rate and the 11th fastest of any state. The rapid economic growth has likely helped reduce unemployment in the state. The share of unemployed workers in Tennessee declined steadily over the past five years and has been below the national rate since January 2017. Currently, 3.5% of the state workforce is unemployed, below the 3.8% national unemployment rate.

While steady economic growth has helped push unemployment below the national average, Tennessee lags behind a majority of states in individual wealth and educational attainment. An estimated 15.8% of state residents live in poverty, and 26.1% of adults have a bachelor’s degree, compared to the national poverty rate of 14.0% and college attainment rate of 31.3%.

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30. Rhode Island
> 5 yr. GDP annual growth rate: +0.9% (15th smallest increase)
> 2017 GDP: $51.2 billion (7th smallest)
> June 2018 Unemployment: 4.3% (tied — 13th highest)
> 5 yr. annual employment growth: +1.0% (22nd smallest increase)

Rhode Island has a relatively highly educated population, as 34.1% of adults in the state have at least a bachelor’s degree, compared to the 31.3% of adults who do nationwide. The state’s poverty rate is also slightly below the national average.

However, Rhode Island ranks worse than the majority of states in several other measures of economic strength. For example, state GDP grew at an average annual rate of just 0.9% per year between 2012 and 2017, compared to a national growth rate of 1.7% per year over the same period. A sign of the state’s relatively stagnant economy is its low population growth. Rhode Island’s population has increased by just 0.6% since 2010, compared to the comparable national population increase of 5.3%.