The States With the Best and Worst Economies

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1. Colorado
> 5 yr. GDP annual growth rate: +5.0% (6th largest increase)
> 2018 GDP: $368.8 billion (16th largest)
> April 2019 unemployment: 3.4% (tied — 21st lowest)
> 5 yr. annual employment growth: +3.0% (2nd largest increase)

By a number of metrics measuring economic growth, wealth, educational attainment, and other factors, Colorado ranks as the best economy in the United States. The state’s economy was the sixth fastest growing over the past five years. One factor contributing to Colorado’s growth is its booming tourism industry. A record 84.7 million domestic travelers visited the state in 2017, setting a new all-time high for the eighth consecutive year. With the state setting new yearly records in domestic tourism, the arts, entertainment, recreation, accommmodation, and food services sector in Colorado grew at an average annual rate of 7.0%, the fifth fastest increase of any state.

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2. Massachusetts
> 5 yr. GDP annual growth rate: +4.5% (13th largest increase)
> 2018 GDP: $567.3 billion (10th largest)
> April 2019 unemployment: 2.9% (tied — 12th lowest)
> 5 yr. annual employment growth: +2.3% (11th largest increase)

Massachusetts is home to seven of the 50 best national universities, according to U.S. News and World Report. It also has one of the most educated populations in the country. Some 43.1% of adults have at least a bachelor’s degree, the largest share of any state and far more than the 32.0% national college attainment rate. Massachusetts’ highly educated labor force is likely one factor contributing to the rapid economic growth of advanced, high-paying industries in the state.

The professional business services sector grew at an average annual rate of 6.5% from 2013 to 2018 — the third fastest increase nationwide — and today the sector accounts for 18.1% of state GDP, the largest share of any state other than Virginia.

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3. Utah
> 5 yr. GDP annual growth rate: +5.7% (3rd largest increase)
> 2018 GDP: $177.3 billion (20th smallest)
> April 2019 unemployment: 2.9% (tied — 12th lowest)
> 5 yr. annual employment growth: +2.6% (6th largest increase)

Utah’s economy was the third fastest growing of U.S. states from 2013 through 2018. One of the main drivers of growth was the state’s booming information sector. The economic output of the information sector grew 53.8% from $5.9 billion in 2013 to $9.0 billion in 2018, the second largest growth of any industry in Utah over that period. Much of the growth likely occurred in the Silicon Slopes region of the state, a cluster of fast-growing tech companies and startups stretching roughly from Salt Lake City to Provo.

The number of employed workers in Utah rose at an average annual rate of 2.6% from 2013 to 2018, the sixth fastest in increase of any state. The state’s population grew by 10.3% between 2010 and 2018 as well, the most of any state. Pull factors for new residents likely include the state’s low cost of living and unemployment rate.

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4. New Hampshire
> 5 yr. GDP annual growth rate: +3.8% (20th largest increase)
> 2018 GDP: $84.7 billion (12th smallest)
> April 2019 unemployment: 2.4% (tied — 4th lowest)
> 5 yr. annual employment growth: +1.1% (24th largest increase)

While New Hampshire’s GDP growth was somewhat average over the last five years — an annual growth rate of 3.8% compared to the 4.1% national figure — the state ranks as the fourth best economy due to its general wealth, highly-educated population, and healthy labor market.

The typical New Hampshire household earns nearly $13,000 more than the typical U.S. household annually, and just 7.7% of residents live below the poverty line — the smallest share nationwide. While 32.0% of Americans 25 and older have a bachelor’s degree, in New Hampshire 36.9% do, the eighth largest share in the country. Individuals with higher educational attainment are more likely to be employed, and in New Hampshire just 2.4% of the labor force is unemployed, well below the 3.6% national rate.

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5. Washington
> 5 yr. GDP annual growth rate: +6.1% (the largest increase)
> 2018 GDP: $563.2 billion (12th largest)
> April 2019 unemployment: 4.7% (6th highest)
> 5 yr. annual employment growth: +2.4% (8th largest increase)

Washington ranks as one of the best economies in the United States due largely to its rapid economic growth — the 6.1% average annual GDP growth rate from 2013 to 2018 was the fastest of any state and far greater than the 4.1% national figure. Growth was led by the state’s information sector, which grew 72.9% from $43.2 billion in output in 2013 to $74.7 billion in 2018 — the sector’s second largest increase of any state other than Nevada. Some of the largest tech companies headquartered in Washington include Microsoft, Amazon, and Expedia.