State Economies Hit Hardest by COVID-19

The Kansas economy generated $157.1 billion in Q3 2020, down 1.9% from one year prior. Despite the decline, the state’s economy has recovered substantially from Q2, when GDP totaled just $145.9, a low not previously seen in at least the last half decade.

The sectors that contracted the most in the state in the past year were also those that were most exposed to fallout from the COVID-19 pandemic. These include arts, entertainment, and recreation, accommodation and food services, transportation and warehousing, and oil and gas extraction.

Due in large part to steep declines in sectors related to tourism — such as arts, entertainment, and recreation as well as food and accommodation services — Florida’s GDP contracted by 2.0% from Q3 2019 to Q3 2020.

So far during the COVID-19 pandemic, Florida’s economy bottomed out in Q2, when its GDP was just $880.4 billion — 7.4% lower than it is now. Whether the economy continued to grow in the final quarter of 2020 remains to be seen.

Nebraska is one of only 19 states where GDP did not contract by more than 2.0% from Q3 2019 to Q3 2020. The relatively small decline was due to stronger than average growth in the state’s finance and insurance sector — which is also the state’s largest by total output. Nebraska’s finance and insurance industry expanded by 6.8% in the last year, faster than the industry’s growth across the U.S. as a whole of 4.3%.

Nebraska’s job market is also stronger than nearly every other state. Just 3.1% of the labor force was unemployed in November 2020, tied for the lowest jobless rate in the country. Nationwide, the comparable monthly unemployment rate stands at 6.7%.

Virginia’s economy contracted by 2.0% over the last year, less than the comparable 2.8% national economic decline. Though Virginia’s GDP in Q3 of 2020, at $481.4 billion, is at its lowest level compared to Q3 2019, it is a marked improvement from the previous quarter. Virginia’s economy expanded by 6.7% between Q2 2020 and Q3 2020.

Over the last year, the industries reporting the largest decline in economic output in Virginia were accommodation and food services, transportation and warehousing, and arts, entertainment, and recreation.

California, which has by far the largest economy in the United States, has not sustained as much of an economic downturn as much of the rest of the country during the COVID-19 pandemic. California’s economic output fell by just 2.1% from Q3 2019 to Q3 2020. Meanwhile, the U.S. economy contracted by 2.8% over the same period.

As is the case in most states, the arts, entertainment, and recreation sectors contracted the most in California over the past year, with economic output cut roughly in half. Meanwhile, information, one of California’s largest industries, expanded by 5.3%.