Special Report

The States With the Best and Worst Economies

Source: Thinkstock

36. Arizona
> 5 yr. GDP annual growth rate: +1.6% (18th largest increase)
> 2017 GDP: $277.7 billion (21st largest)
> June 2018 Unemployment: 4.7% (tied — 4th highest)
> 5 yr. annual employment growth: +2.0% (10th largest increase)

Few states are growing as rapidly as Arizona. Over the last half decade, the number of people living in the state climbed by 7.2%, nearly double the 3.7% national population growth. While job growth in Arizona has also been relatively strong over the same period, unemployment remains high. Arizona’s 4.7% jobless rate is among the highest of any state and well above the 3.8% national unemployment rate.

Arizona residents are also more likely to be poor and less likely to be wealthy than the typical American. The state’s 16.4% poverty rate is among the highest of all states and well above the 14.0% national poverty rate. Additionally, less than 5% of Arizona households earn $200,000 or more a year compared to 6.4% of U.S. households.

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37. Pennsylvania
> 5 yr. GDP annual growth rate: +1.5% (24th largest increase)
> 2017 GDP: $663.8 billion (6th largest)
> June 2018 Unemployment: 4.3% (tied — 13th highest)
> 5 yr. annual employment growth: +0.6% (8th smallest increase)

Pennsylvania is one of many Northeastern states struggling to attract and retain a young, educated workforce. The population of Pennsylvania grew by just 0.3% from 2012 to 2017, the seventh lowest growth rate of any state. Just 2.4% of adults who moved to Pennsylvania from within the United States in the past year had a bachelor’s degree, one of the smaller shares of any state. The slow population growth and slow college-educated population growth has not likely helped boost economic growth. Pennsylvania’s GDP grew at an average annual rate of 1.5% from 2012 to 2017, less than the 1.7% national figure.

Despite declining steadily over the past eight years, Pennsylvania’s unemployment rate has only recently returned to its pre-recession levels, and it remains higher than a majority of states. Currently, 4.3% of the state’s workforce is unemployed, higher than the 3.8% national unemployment rate.

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38. Missouri
> 5 yr. GDP annual growth rate: +0.7% (7th smallest increase)
> 2017 GDP: $263.1 billion (22nd largest)
> June 2018 Unemployment: 3.5% (tied — 17th lowest)
> 5 yr. annual employment growth: +1.1% (23rd largest increase)

The Missouri economy grew at an average annual rate of just 0.7% from 2012 to 2017, the 10th slowest economic growth of any state — including those with shrinking economies. Over the same period, the national GDP increased at an average annual rate of 1.7%. One factor hindering economic activity in Missouri is likely the state’s sluggish population growth. The state’s population grew by just 1.5% over the past five years, less than half the 3.7% national figure.

In other measures of economic health, Missouri lags behind the nation as a whole. For example, 28.5% of adults in the state have a bachelor’s degree, far less than the 31.3% national college attainment rate.

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39. Michigan
> 5 yr. GDP annual growth rate: +1.6% (17th largest increase)
> 2017 GDP: $440.3 billion (13th largest)
> June 2018 Unemployment: 4.5% (tied — 9th highest)
> 5 yr. annual employment growth: +1.3% (17th largest increase)

Michigan’s 4.5% June unemployment rate is higher than that of most states and well above the 3.8% U.S. unemployment rate. The relatively high unemployment is partially attributable to longer term employment declines in certain industries. Over the last five years, the state’s mining and logging industry, as well as the other services industry and government sector, have each shed jobs.

Incomes are relatively low in Michigan. The typical household in the state earns $52,492 a year, about $5,000 less than the typical American household.

Source: Thinkstock

40. Ohio
> 5 yr. GDP annual growth rate: +1.3% (22nd smallest increase)
> 2017 GDP: $561.8 billion (7th largest)
> June 2018 Unemployment: 4.5% (tied — 9th highest)
> 5 yr. annual employment growth: +1.0% (23rd smallest increase)

Along with states like Michigan, Indiana, and Illinois, Ohio is one of several Midwestern states to have felt the decline of American manufacturing the most. While conditions have improved in some parts of the Rust Belt, unemployment remains relatively high in most of these states, including Ohio. The state’s unemployment rate as of June of 4.5% was tied with two other states — including Michigan for ninth worst in the country. Further evidence of the state’s ongoing economic difficulties, Ohio’s employment and GDP annual average growth rates were below the comparable national average over the last half decade.