The States With the Best and Worst Economies

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31. Kansas
> 5 yr. GDP annual growth rate: +3.1% (19th smallest increase)
> 2018 GDP: $167.0 billion (19th smallest)
> April 2019 unemployment: 3.5% (22nd lowest)
> 5 yr. annual employment growth: +0.4% (8th smallest increase)

The population of Kansas declined by 1.8% due to net migration from 2010 to 2018, the fourth largest contraction of any state. Declining population change can be a contributor to — or sign of — economic contraction, and from 2013 to 2018 the GDP of Kansas grew at an average annual rate of 3.1% a year, trailing behind the 4.1% national growth rate. Some of the fastest growing sectors include manufacturing, finance, and professional and business services. Meanwhile, some of the sectors that declined include mining, agriculture, and information.

Despite its sluggish GDP growth, Kansas ranks above the majority of states in other measures of economic well-being. Some 33.7% of adults in Kansas have at least a bachelor’s degree, above the 32.0% national college attainment rate. Individuals with greater educational attainment are less likely to struggle financially, and just 11.9% of Kansas residents live in poverty — less than the 13.4% national rate.

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32. Texas
> 5 yr. GDP annual growth rate: +3.4% (23rd smallest increase)
> 2018 GDP: $1.8 trillion (2nd largest)
> April 2019 unemployment: 3.7% (tied — 23rd highest)
> 5 yr. annual employment growth: +2.0% (16th largest increase)

Texas is one of several states to have trailed the U.S. as a whole in economic growth over the past several years. The GDP of the Texas mining sector shrank from $183.3 billion in 2013 to $148.3 billion in 2018 — this 19.1% decline was the largest percentage drop of any industry in the state. Meanwhile, some of the fastest growing sectors were arts, entertainment, recreation, accommodation, and food services, construction, and finance and insurance. Overall, Texas’s GDP grew at an average annual rate of 3.4% from 2013 to 2018, slower than the 4.1% national growth rate.

Texas also lags behind the nation as a whole in other measures of economic health. Just 29.6% of adults in Texas have a bachelor’s degree, less than the 32.0% national college attainment rate. Businesses with advanced, high-paying jobs are less likely to move to areas with low educational attainment, and areas with lower college attainment rates are more likely to be low-income overall. In Texas 14.7% of residents live in poverty, more than the 13.4% national poverty rate.

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33. Montana
> 5 yr. GDP annual growth rate: +2.6% (11th smallest increase)
> 2018 GDP: $49.0 billion (3rd smallest)
> April 2019 unemployment: 3.6% (tied — 25th highest)
> 5 yr. annual employment growth: +1.0% (25th smallest increase)

From 2013 to 2018, the GDP of Montana grew at an average annual rate of 2.6%, trailing far behind the national growth rate of 4.1%. Like the U.S. as a whole, mining was the largest drag on economic growth. The economic output generated by mining, quarrying, and oil and gas extraction fell from $2.7 billion in 2013 to $1.8 billion in 2018, more than twice the rate of decline for the national mining sector.

In other measures of economic well-being, Montana ranks near the middle of all states. Some 3.6% of the labor force is unemployed — equivalent to the national unemployment rate — and 32.3% of residents have a bachelor’s degree, roughly in line with the 32.0% national college attainment rate. Some 12.5% of Montana residents live in poverty, compared to 13.4% of Americans nationwide.

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34. Michigan
> 5 yr. GDP annual growth rate: +4.1% (17th largest increase)
> 2018 GDP: $528.0 billion (14th largest)
> April 2019 unemployment: 4.1% (12th highest)
> 5 yr. annual employment growth: +1.8% (18th largest increase)

Michigan is one of several states in the Great Lakes region to rank in the bottom half of the state economies. From 2010 to 2018, more residents moved out of Michigan than moved in, and the population grew at roughly one-fifth the national rate overall. Despite declining more over the past five years than all but two states, Michigan’s unemployment rate remains relatively high at 4.1%, far above the 3.6% national figure.

Despite below-average population growth and above-average unemployment, Michigan’s economy kept pace with the nation as a whole over the past five years, increasing at an average annual rate of 4.1% from 2013 to 2018.

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35. South Dakota
> 5 yr. GDP annual growth rate: +2.9% (16th smallest increase)
> 2018 GDP: $51.6 billion (4th smallest)
> April 2019 unemployment: 2.8% (tied — 8th lowest)
> 5 yr. annual employment growth: +0.9% (20th smallest increase)

The GDP of South Dakota grew at an average rate of 2.9% a year from 2013 to 2018, lagging behind the 4.1% national growth rate. The biggest contributor to South Dakota’s GDP growth was the finance, insurance, real estate, rental, and leasing sector, which grew from $10.6 billion to $13.2 billion. Meanwhile, the biggest drags on GDP growth came from the mining and agriculture sectors.

One factor limiting economic growth in South Dakota may be the relative lack of highly educated labor in the state. While 32.0% of Americans 25 and over have a bachelor’s degree, in South Dakota just 28.1% of adults have a four-year college diploma.