Special Report

The States With the Best and Worst Economies

Source: Sean Pavone / Getty Images

36. Arkansas
> 5 yr. annualized GDP growth rate through Q1 2020: +1.1% (20th lowest)
> 5 yr. annualized employment growth rate through June 2020: -0.9% (25th lowest)
> June 2020 unemployment rate: 8.0% (18th lowest)
> Poverty rate: 17.2% (5th highest)

The economy of Arkansas ranks as one of the worst among all states in large part because of its poverty rate. Some 17.2% of state residents live below the poverty line. Arkansas also has the third lowest median household income at just over $47,000, nearly $15,000 below the U.S. median.

The GDP of Arkansas increased at an annual rate of 1.1% over the past five years, well below the 1.9% annualized increase of the U.S. overall. Still, the state’s unemployment rate has consistently been below the U.S. rate, and that has continued throughout 2020. Just 8.0% of the Arkansas labor force is out of work, compared to the 11.1% U.S. unemployment rate.

Source: S. Greg Panosian / Getty Images

37. Pennsylvania
> 5 yr. annualized GDP growth rate through Q1 2020: +1.3% (25th highest)
> 5 yr. annualized employment growth rate through June 2020: -1.9% (8th lowest)
> June 2020 unemployment rate: 13.0% (9th highest)
> Poverty rate: 12.2% (23rd lowest)

At 13.0%, Pennsylvania has the ninth highest unemployment rate of any state. The state’s jobless rate climbed 7.7 percentage points over the last five years, the 10th largest increase of any state.

Pennsylvania’s economy has not expanded as quickly as the U.S. economy overall. The state’s GDP grew at an annualized rate of 1.3% from 2015 to 2020, well behind the U.S. rate of 1.9% over the same period.

Source: Sean Pavone / iStock via Getty Images

38. New Mexico
> 5 yr. annualized GDP growth rate through Q1 2020: +1.3% (25th lowest)
> 5 yr. annualized employment growth rate through June 2020: -0.7% (22nd highest)
> June 2020 unemployment rate: 8.3% (19th lowest)
> Poverty rate: 19.5% (2nd highest)

New Mexico’s unemployment rate of 8.3% is lower than in most states and well below the 11.1% national jobless rate. Still, despite a relatively current strong job market, New Mexico is one of the poorest states in the country. About one in every five New Mexico residents live below the poverty line, the second highest poverty rate of any state.

Economic growth has also been slow in recent years. Between the first quarter of 2015 and the first quarter of 2020, New Mexico’s economy grew by just 6.5%. Over the same period, the U.S. economy grew by 9.8%.

Source: SeanPavonePhoto / Getty Images

39. Massachusetts
> 5 yr. annualized GDP growth rate through Q1 2020: +2.0% (13th highest)
> 5 yr. annualized employment growth rate through June 2020: -2.3% (4th lowest)
> June 2020 unemployment rate: 17.4% (the highest)
> Poverty rate: 10.0% (8th lowest)

By several measures, Massachusetts’s economy is in better shape than that of most states. GDP growth has been relatively strong in the state in recent years, and residents are far less likely to live below the poverty line than most Americans. However, the coronavirus has recently devastated the job market in the state.

As of June, a staggering 17.4% of the labor force in Massachusetts was out of work, the highest unemployment rate of any state in the country. The same month, the U.S. jobless rate stood at 11.1%. In June 2019, the Massachusetts unemployment rate was just 2.9%. Over the year since, the state has shed more than 662,000 jobs.

Source: okimo / iStock via Getty Images

40. Hawaii
> 5 yr. annualized GDP growth rate through Q1 2020: +1.5% (20th highest)
> 5 yr. annualized employment growth rate through June 2020: -4.1% (the lowest)
> June 2020 unemployment rate: 13.9% (8th highest)
> Poverty rate: 8.8% (2nd lowest)

No state has lost more jobs since 2015 than Hawaii. The total number of employed state residents decreased at an annual rate of 4.1% each of the last five years. While the pandemic took a toll on the tourism-dependent state, employment has fallen each June since 2017. Hawaii’s June 2020 unemployment rate of 13.9% is higher than all but seven other states.

Despite steady job losses, Hawaii’s GDP grew at an annualized rate of 1.5% from 2015 to 2020, a higher growth rate than most states, but still slower than the annualized U.S. GDP growth of 1.9%. Hawaii’s poverty rate of 8.8% was the second lowest of all states.

Sponsored: Tips for Investing

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.