Special Report

The States With the Best and Worst Economies

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6. Arizona
> 5 yr. annualized GDP growth rate through Q1 2020: +3.0% (5th highest)
> 5 yr. annualized employment growth rate through June 2020: +1.2% (4th highest)
> June 2020 unemployment rate: 10.0% (20th highest)
> Poverty rate: 14.0% (14th highest)

Only four states have reported faster annual GDP growth since 2015 than Arizona. Over the last half decade, the state’s economy grew at an annualized rate of 3.0%, compared to 1.9% nationwide. Over the same period, information and construction were the state’s fastest-growing industries.

Population growth can help drive GDP growth, and between 2010 and 2019, Arizona’s population grew by 9.3% from migration alone, more than every other state other than Florida and Nevada. Population growth is also likely driving job growth. The number of people working in Arizona climbed by 6.0% from June 2015 to June 2020. Meanwhile, across the U.S. as a whole, employment fell by 2.7% over the same period.

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7. Nebraska
> 5 yr. annualized GDP growth rate through Q1 2020: +1.2% (23rd lowest)
> 5 yr. annualized employment growth rate through June 2020: +0.2% (10th highest)
> June 2020 unemployment rate: 6.7% (7th lowest)
> Poverty rate: 11.0% (16th lowest)

Since mid-March, around the time President Donald Trump declared COVID-19 a national emergency, only 17.4% of Nebraska’s labor force filed for unemployment, nearly the smallest share of any state. COVID-19’s relatively small impact on Nebraska’s job market helps explain why the state’s June unemployment rate of 6.7% was lower than that of all but six other states, and well below the 11.1% national jobless rate. Additionally, unlike in most states, there are more people working in Nebraska today than there were five years ago.

While employment growth has been strong and unemployment low in Nebraska, economic growth has been somewhat less impressive. Over the last five years, the state’s GDP grew at an annualized rate of just 1.2%, below the 1.9% annualized national economic growth.

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8. Oregon
> 5 yr. annualized GDP growth rate through Q1 2020: +3.2% (3rd highest)
> 5 yr. annualized employment growth rate through June 2020: +0.5% (7th highest)
> June 2020 unemployment rate: 11.2% (14th highest)
> Poverty rate: 12.6% (25th lowest)

Oregon’s GDP increased 17.3% from the first quarter of 2015 to the first quarter of 2020 — the third highest GDP growth rate among all states, well above the 9.8% national GDP growth. Oregon is one of just a dozen states in which there were more people working in June 2020 than there were in June 2015, with nearly 45,000 more people employed. This 2.4% increase is the seventh highest among states. Comparatively, the U.S. had 2.7% fewer people working in June 2020 compared to five years prior.

The GDP increase is likely due in part to the state’s population growth from 2010 to 2019. The state’s population grew by 7.6% in that time from migration alone — more than triple the national rate.

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9. Minnesota
> 5 yr. annualized GDP growth rate through Q1 2020: +1.5% (21st highest)
> 5 yr. annualized employment growth rate through June 2020: -0.3% (16th highest)
> June 2020 unemployment rate: 8.6% (23rd lowest)
> Poverty rate: 9.6% (7th lowest)

Minnesota is one of only two states that rank in the top 10 on this list where there are fewer people working today than there were five years ago. Still, job losses have not been as steep as they have been nationwide. Overall employment has fallen by 1.4% in Minnesota from June 2015 through June 2020, compared to a 2.7% decline nationwide. Relatively limited job losses help explain why, at 8.6%, Minnesota’s June unemployment rate is considerably lower than the 11.1% national rate.

Minnesota’s economy also ranks favorably among states due to the relatively small share of residents facing serious financial hardship. Only 9.6% of people in the state live below the poverty line compared to 13.1% of all Americans.

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10. Georgia
> 5 yr. annualized GDP growth rate through Q1 2020: +2.5% (11th highest)
> 5 yr. annualized employment growth rate through June 2020: +0.3% (8th highest)
> June 2020 unemployment rate: 7.6% (14th lowest)
> Poverty rate: 14.3% (12th highest)

Georgia’s economy ranks as the second best on the East Coast or in the South, and 10th best among all states. Despite having higher than average employment in industries at high risk of slowdown during the pandemic, Georgia’s unemployment rate compares favorably to that of the nation as a whole. As of June, 7.6% of the state’s labor force was out of work, compared to 11.1% of the U.S. labor force. Georgia is one of only a dozen states where there are more people working today than there were five years ago.

While Georgia’s job market is relatively strong, state residents are more likely to live in poverty than most Americans. Georgia has a 14.3% poverty rate, higher than most states and the 13.1% national poverty rate.

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