Special Report

State Economies Hit Hardest By the COVID-19 Recession

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5. West Virginia
> 1-yr. GDP change: -5.5%
> 2020 GDP: $68.4 billion (10th smallest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-23.7%)
> Fastest growing industry, 2019-2020: Utilities (+3.2%)
> April 2021 unemployment: 5.8% (21st highest)

West Virginia’s economy contracted by 5.5% in 2020, more than in all but four other states. Utilities and agriculture were the only sectors that expanded in the state that year. Meanwhile, several sectors, including transportation and warehousing, and arts, entertainment, recreation, accommodation, and food services contracted, reported double digit output declines.

Every sector in the state shed jobs in 2020, and overall employment fell by 6.6%, well above the comparable 5.8% national employment decline. Still, West Virginia’s 5.8% jobless rate is slightly below the 6.1% national rate.

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4. New York
> 1-yr. GDP change: -5.9%
> 2020 GDP: $1.4 trillion (3rd largest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-44.8%)
> Fastest growing industry, 2019-2020: Information (+6.2%)
> April 2021 unemployment: 8.2% (3rd highest)

New York’s GDP fell to $1.4 trillion in 2020, down $88.3 billion, or 5.9%, from the previous year — the largest and fourth largest declines of any state, respectively.

The only two sectors in the state that reported growth in 2020 were information and utilities, which expanded by 6.2% and 1.4%, respectively. Meanwhile, the state’s arts, entertainment, recreation, accommodation, and food services sector contracted by a staggering 44.8%, accounting for a net drag on overall growth of 2 percentage points.

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3. Oklahoma
> 1-yr. GDP change: -6.1%
> 2020 GDP: $185.9 billion (23rd smallest)
> Fastest shrinking industry, 2019-2020: Mining, quarrying, and oil and gas extraction (-22.5%)
> Fastest growing industry, 2019-2020: Information (+1.3%)
> April 2021 unemployment: 4.3% (17th lowest)

Oklahoma is one of only three states to report a decline in economic output of over 6% in 2020. Oklahoma’s GDP fell 6.1%, from $197.9 billion in 2019 to $185.9 billion in 2020. In most of the country, sectors related to travel and tourism reported the largest declines in 2020. In Oklahoma, however, the resource extraction sector contracted the most.

Oklahoma is the fourth largest oil-producing state, and during the pandemic, demand for fossil fuels plummeted and oil prices cratered. Output in Oklahoma’s mining, quarrying, and oil and gas extraction sector fell by 22.5% in 2020. Meanwhile, retail trade and information were the only sectors in the state to report growth last year, expanding by 1.3% and 1.1%, respectively.

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2. Wyoming
> 1-yr. GDP change: -7.0%
> 2020 GDP: $36.5 billion (2nd smallest)
> Fastest shrinking industry, 2019-2020: Mining, quarrying, and oil and gas extraction (-18.8%)
> Fastest growing industry, 2019-2020: Utilities (+4.2%)
> April 2021 unemployment: 5.4% (23rd highest)

Wyoming’s economy contracted by 7.0% in 2020, the second largest decline of any state. Unlike most states, where the arts, entertainment, recreation, accommodation, and food services sector shrank more than any other, in Wyoming, mining, quarrying, and oil and gas extraction contracted the most. The sector reported an 18.8% decline in output and posed a 4.7 percentage point drag on GDP.

Every sector in Wyoming reported job losses last year, resulting in a 6.1% decline in employment, slightly higher than the comparable 5.8% decline nationwide. Still, the state’s 5.4% unemployment rate in April is considerably lower than the 6.1% U.S. jobless rate.

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1. Hawaii
> 1-yr. GDP change: -8.0%
> 2020 GDP: $75.9 billion (13th smallest)
> Fastest shrinking industry, 2019-2020: Arts, entertainment, recreation, accommodation, and food services (-38.4%)
> Fastest growing industry, 2019-2020: Agriculture, forestry, fishing and hunting (+6.4%)
> April 2021 unemployment: 8.5% (the highest)

Hawaii reported by far the largest economic contraction of any state in 2020. Hawaii’s GDP fell from $82.4 billion in 2019 to $75.9 billion in 2020, an 8.0% drop. Tourism, an industry that was effectively ground to a halt during the pandemic, is an economic pillar in Hawaii. Due to efforts to contain the spread of COVID-19, Hawaii reported only 2.7 million visitors in 2020, down from 10.2 million in 2019. Over the same period, the state’s arts, entertainment, recreation, accommodation, and food services contracted by 38.4%.

The economic contraction was accompanied by steep job cuts in Hawaii last year. Overall employment fell by a nation-leading 16.1% in 2020, nearly three times the national 5.8% employment decline. Currently, Hawaii’s 8.5% jobless rate is the highest in the nation.

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