Best & Worst State Economies (2023)

U.S. economic growth depends heavily on the performance of individual states. But some contribute more than others. California, for instance, is the fifth largest economy in the world, boasting a GDP larger than that of countries like the U.K., France and India. Meanwhile, Vermont’s GDP is around 91 times smaller, at $36.7 billion compared to California’s $3.4 trillion.

In order to determine which states are pulling the most weight even during this time of economic difficulty caused by the COVID-19 pandemic, WalletHub compared the 50 states and the District of Columbia across 28 key indicators of economic performance and strength. Our data set ranges from GDP growth to startup activity to the share of jobs in high-tech industries.

Table of Contents

Main FindingsAsk the ExpertsMethodology

Main Findings

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State Economy Rankings

Overall RankStateTotal ScoreEconomic ActivityEconomic HealthInnovation Potential
1Washington73.83372
2Utah71.332110
3California70.301313
4Massachusetts67.286351
5New Hampshire58.8618134
6Colorado58.841369
7North Carolina56.83141211
8Georgia56.5451524
9Oregon55.8615237
10District of Columbia54.7491413
11Tennessee54.614538
12Texas54.168923
13Idaho53.5722216
14Florida52.6810333
15Michigan52.5716405
16Maryland50.6525366
17Arizona50.64171920
18Montana49.61121034
19Minnesota49.04231817
20Virginia47.15271622
21New York47.12115021
22Indiana46.44212030
23New Jersey46.24195112
24Iowa46.12242126
25Connecticut45.1038438
26Nevada44.7773244
27Wisconsin44.25431718
28Delaware43.68342915
29Nebraska43.6029836
30South Carolina42.36202739
31Missouri41.38332828
32Illinois41.13264129
33Pennsylvania40.48314819
34Alabama40.24322535
35Kansas39.78402631
36Rhode Island39.19373927
37South Dakota38.7042447
38North Dakota38.41461137
39Ohio38.09304632
40New Mexico38.07444914
41Vermont37.99483025
42Kentucky36.03283746
43Arkansas35.88352245
44Maine35.37363442
45Wyoming34.38392449
46Mississippi32.19414743
47Oklahoma31.32503840
48Hawaii30.59473350
49Louisiana29.39454448
50Alaska27.61514541
51West Virginia26.10494251

Note: With the exception of “Total Score,” all of the columns in the table above depict the relative rank of that state, where a rank of 1 represents the best conditions for that metric category.

Best & Worst State Economies (1)

Change in GDP

Highest Change

  • 1. Tennessee
  • 2. New Hampshire
  • 3. California
  • 4. Nevada
  • 5. Indiana

Best & Worst State Economies (2)

Lowest Change

  • 47. Louisiana
  • 48. Oklahoma
  • 49. North Dakota
  • 50. Wyoming
  • 51. Alaska

Best State vs. Worst State: 31x Difference

Tennessee vs. Alaska

Best & Worst State Economies (3)

Exports per Capita

Most Exports

  • T-1. Louisiana
  • T-1. Texas
  • T-1. Alaska
  • T-1. Washington
  • T-1. Oregon

Best & Worst State Economies (4)

(Video) States With The Worst Economy

Fewest Exports

  • 47. Arkansas
  • 48. Montana
  • 49. Colorado
  • 50. Oklahoma
  • 51. Hawaii

Best State vs. Worst State: 69x Difference

Louisiana vs. Hawaii

Best & Worst State Economies (5)

Startup Activity

Most Activity

  • 1. Florida
  • 2. Nevada
  • 3. Utah
  • 4. Idaho
  • 5. Colorado

Best & Worst State Economies (6)

Least Activity

  • 47. Wisconsin
  • 48. Ohio
  • 49. Vermont
  • 50. West Virginia
  • 51. Iowa

Best State vs. Worst State: 2x Difference

Florida vs. Iowa

Best & Worst State Economies (7)

Unemployment Rate

Lowest Rate

  • T-1. Utah
  • T-1. Nebraska
  • T-1. New Hampshire
  • T-1. Kansas
  • T-1. Minnesota

Best & Worst State Economies (8)

Highest Rate

  • T-45. Connecticut
  • T-45. Pennsylvania
  • 48. New York
  • 49. Michigan
  • 50. Alaska
  • 51. District of Columbia

Best State vs. Worst State: 3x Difference

Utah vs. District of Columbia

Best & Worst State Economies (9)

Change in Nonfarm Payrolls

Highest Change

  • 1. Nevada
  • 2. Hawaii
  • 3. Texas
  • 4. California
  • 5. New Mexico

Best & Worst State Economies (10)

Lowest Change

  • 47. South Dakota
  • 48. Wisconsin
  • 49. Alabama
  • 50. Alaska
  • 51. Ohio

Best State vs. Worst State: 5x Difference

Nevada vs. Ohio

(Video) 2021’s Best & Worst State Economies

Best & Worst State Economies (11)

Median Annual Household Income

Highest Income

  • 1. Virginia
  • 2. Utah
  • 3. Minnesota
  • 4. New Jersey
  • 5. Maryland

Best & Worst State Economies (12)

Lowest Income

  • 47. Vermont
  • 48. Louisiana
  • 49. New Mexico
  • 50. Maine
  • 51. West Virginia

Best State vs. Worst State: 2x Difference

Virginia vs. West Virginia

Best & Worst State Economies (13)

State-Government Surplus per Capita

Highest Surplus per Capita

  • T-1. Wyoming
  • T-1. Wisconsin
  • 3. North Dakota
  • 4. Hawaii
  • 5. Connecticut
(Video) 2022’s Best & Worst State Economies

Best & Worst State Economies (14)

Lowest Surplus per Capita

  • 46. Oregon
  • 47. Michigan
  • 48. New Mexico
  • 49. New York
  • 50. Alaska

Best & Worst State Economies (15)

Avg. Educational Attainment of Recent Immigrants

Highest Average

  • 1. District of Columbia
  • 2. Washington
  • 3. Wyoming
  • 4. Montana
  • 5. New Hampshire

Best & Worst State Economies (16)

Lowest Average

  • 47. New Mexico
  • 48. Delaware
  • 49. Oklahoma
  • 50. South Dakota
  • 51. Mississippi

Best State vs. Worst State: 2x Difference

District of Columbia vs. Mississippi

Best & Worst State Economies (17)

% of Jobs in High-Tech Industries

Best State vs. Worst State: 4x Difference

Massachusetts vs. Arkansas

Best & Worst State Economies (19)

Independent Inventor Patents per 1,000 Working-Age Population

Most Patents

  • T-1. Massachusetts
  • T-1. California
  • T-1. Washington
  • 4. Oregon
  • 5. Connecticut

Best & Worst State Economies (20)

Fewest Patents

  • 47. Hawaii
  • 48. Louisiana
  • 49. West Virginia
  • 50. Mississippi
  • 51. Alaska

Best State vs. Worst State: 21x Difference

Massachusetts vs. Alaska

(Video) All 50 STATES in AMERICA Ranked WORST to BEST

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Ask the Experts

Not all economic growth strategies are effective. For the best ways to stimulate the economy and achieve lasting prosperity, we asked a panel of experts to share their thoughts on the following key questions:

  1. What are the most effective ways for state and local officials to help their local economies recover from the impact of the pandemic?
  2. What can states do to prevent “brain drain” and develop, attract and retain highly skilled workers?
  3. States often compete for business investment by offering tax breaks and other incentives. Do such efforts more often result in a net positive or net negative impact on state economies? Do such efforts create a “race to the bottom” across states?
  4. What makes a state attractive to potential entrepreneurs?
  5. In evaluating the states with the best economies, what are the top five indicators?

Ask the Experts

Robert Wyllie
Assistant Professor of Political Science, Director of Political Economy Program, College of Arts & Sciences – Ashland University
Read More

Lawrence J. White
Robert Kavesh Professor of Economics; General Editor, Review of Industrial Organization – Stern School of Business, New York University
Read More

Gregory S. Burge
Chair & Professor of Economics – University of Oklahoma
Read More

Vincent J. Geloso
Assistant Professor, Economics – George Mason University
Read More

Methodology

In order to determine the best state economies, WalletHub compared the 50 states and the District of Columbia across three key dimensions: 1) Economic Activity, 2) Economic Health and 3) Innovation Potential.

We evaluated those dimensions using 28 relevant metrics, which are listed below with their corresponding weights. Each metric was graded on a 100-point scale, with a score of 100 representing the highest economic performance.

We then determined each state and the District’s weighted average across all metrics to calculate its overall score and used the resulting scores to rank-order our sample.

Economic Activity – Total Points: 33.33

  • Change in GDP (2021 vs. 2020): Quadruple Weight (~13.33 Points)
  • Share of Fast-Growing Firms: Triple Weight (~10.00 Points)
    Note: This metric measures the number of firms in Deloitte’s Technology Fast 500 list as a percentage of total firms.
  • State Gross Public Debt as Percent of GDP: Full Weight (~3.33 Points)
  • Exports per Capita: Full Weight (~3.33 Points)
  • Startup Activity: Full Weight (~3.33 Points)
    Note: This metric measures the rate of newly established firms.

Economic Health – Total Points: 33.33

  • Unemployment Rate: Double Weight (~4.30 Points)
  • Underemployment Rate: Half Weight (~1.08 Points)
  • Change in Nonfarm Payrolls (2021 vs. 2020): Full Weight (~2.15 Points)
  • Change in Total Civilian Labor Force (2021 vs. 2020): Full Weight (~2.15 Points)
  • Increase in Ratio of Full-Time Jobs to Part-Time Jobs (2020 vs. 2019): Half Weight (~1.08 Points)
  • Median Annual Household Income Adjusted for Cost of Living: Full Weight (~2.15 Points)
  • Growth in State Personal Income (2021 vs. 2020): Full Weight (~2.15 Points)
  • Government Surplus/Deficit per Capita: Full Weight (~2.15 Points)
  • Unfunded Public Pension Plans per Capita: Full Weight (~2.15 Points)
  • Share of Uninsured Population: Half Weight (~1.08 Points)
  • Share of Population in Poverty: Full Weight (~2.15 Points)
  • Foreclosure Rate: Full Weight (~2.15 Points)
  • Growth in Number of Businesses (2020 vs. 2019): Full Weight (~2.15 Points)
  • Fiscal Health: Full Weight (~2.15 Points)
    Note: This metric is based on the George Mason University Mercatus Center’s state fiscal rankings, particularly the State Fiscal Condition Index, which refers to the sum of cash, budget, long-run, service-level and trust-fund solvency indices for each state.
  • Building-Permit Activity: Full Weight (~2.15 Points)
    Note: This metric measures the total number of new privately owned residential-building permits issued annually per capita.
  • Average Educational Attainment of Recent Immigrants: Half Weight (~1.08 Points)
    Note: The educational attainment of recent immigrants aged 25 and older from a foreign country is classified as having either no high school diploma; a high school diploma or equivalent; some college experience or an associate’s degree; a bachelor’s degree; or a graduate or professional degree.
  • Average Educational Attainment of Recent Migrants from Other U.S. States: Half Weight (~1.08 Points)
    Note: The educational attainment of recent migrants aged 25 and older from other states within the U.S. is classified as having either no high school diploma; a high school diploma or equivalent; some college experience or an associate’s degree; a bachelor’s degree; or a graduate or professional degree.

Innovation Potential – Total Points: 33.33

  • Share of Jobs in High-Tech Industries: Full Weight (~5.56 Points)
  • Share of Jobs STEM Employment: Full Weight (~5.56 Points)
  • Independent Inventor Patents per 1,000 Working-Age Population: Full Weight (~5.56 Points)
  • Industry R&D Investment Amount per Total Civilian Employed Population: Full Weight (~5.56 Points)
    Note: “R&D” refers to research and development.
  • Nonindustry R&D Investment Amount as Share of GDP: Full Weight (~5.56 Points)
    Note: “R&D” refers to research and development.
  • Entrepreneurial Activity: Full Weight (~5.56 Points)
    Note: This metric is based on the Kauffman Index of Startup Activity, which is an equally weighted index of four normalized measures of startup activity, as defined by the Kauffman Foundation: the Rate of New Entrepreneurs (percentage of adults becoming entrepreneurs in a given month); the Opportunity Share of New Entrepreneurs (percentage of new entrepreneurs driven primarily by “opportunity” vs. “necessity”); the Startup Early Job Creation (the number of jobs created in the first year of business per capita); and the Startup Early Survival Rate (the rate of survival in the first year of business).

Sources: Data used to create this ranking were collected from the U.S. Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, Deloitte, United Health Foundation, American Legislative Exchange Council, Mercatus Center at George Mason University, Council for Community and Economic Research, ATTOM Data Solutions, United States Patent and Trademark Office, usgovernmentspending.com, National Science Foundation, and Ewing Marion Kauffman Foundation.

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(Video) 2019 Best & Worst State Economies

FAQs

Which states have the best and worst economies? ›

Washington topped the list of best state economies, ranking third on economic activity, seventh on economic health, and second on innovation potential. Utah and California rounded out the top three state economies. At the bottom of the list were Louisiana, Alaska, and West Virginia.

Which state economies are doing the best? ›

America's Top States for Business 2022
Overall RankStateCost of Doing Business
1North Carolina26
2Washington33
3Virginia25
4Colorado36
26 more rows
Jul 13, 2022

Which state has the best economy 2022? ›

The new top state for business in 2022 is North Carolina, according to a new CNBC study, thanks to putting partisanship aside to build the nation's strongest economy.

Which state has the highest economy? ›

The gross domestic product (GDP) of California was about 3.36 trillion U.S. dollars in 2021, meaning that it contributed the most out of any state to the country's GDP in that year.

What is the best type of economy? ›

Capitalism is the greatest economic system because it has numerous benefits and creates multiple opportunities for individuals in society. Some of these benefits include producing wealth and innovation, improving the lives of individuals, and giving power to the people.

Which US state has the weakest economy? ›

The three U.S. states with the lowest GDPs were Vermont ($36.1 Billion), Wyoming ($41.6 Billion), and Alaska ($55.0 Billion).

What are the top 10 economies in the United States? ›

Here are the 10 states with the highest GDP: California - 3,120,386 million.
...
Gross Domestic Product (GDP) by State
  • New York ($1,705,127)
  • Florida ($1,111,614)
  • Illinois ($875,671)
  • Pennsylvania ($788,500)
  • Ohio ($683,460)
  • Washington ($632,013)
  • Georgia ($627,667)
  • New Jersey ($625,659).

Who has the strongest economy? ›

With a GDP of 23.0 trillion USD, the USA is by far the world's largest economy in this ranking for 2021. It is followed by China in 2nd place with a GDP of still 17,734.1 tn USD.

Which US state is the most financially stable? ›

Alaska is the top state for fiscal stability. It's followed by South Dakota, Tennessee, Idaho and Utah to round out the top five.

Which state has the fastest growing economy? ›

GDP by State: GDP Growth Over 1 Year
RankState1-Year Change (%)
1Hawaii8.8%
2Nevada8.2%
3California8.0%
4Tennessee7.6%
47 more rows
May 17, 2022

Which state has the best future? ›

Best States to Live in 2022
StateTotalEconomy
Washington14
Minnesota215
Utah31
New Hampshire411
42 more rows

What is the #1 state in America? ›

Washington

What's the best state to live in? ›

The personal finance website compared 50 states based on 52 key indicators of livability. Those categories included the cost of living, job opportunities, education quality and safety. According to WalletHub, Massachusetts was the No. 1 overall state, closely followed by New Jersey and New York.

Is Texas A rich or poor state? ›

The country's second-most populous state, Texas, is also its second-richest state in terms of GDP. Texas's GDP is $1,772,132,000. Texas's median household income is $64,034, just below the national median.

What are the 4 types of economies? ›

Each economy functions based on a unique set of conditions and assumptions. Economic systems can be categorized into four main types: traditional economies, command economies, mixed economies, and market economies.

What are the 3 main economic systems? ›

There are three main types of economies: free market, command, and mixed.

What are the 3 types of economy? ›

In this context, we are going to study the basics of the economic system and the types of an economy that prevailed and is prevailing.
...
Economic Sectors
  • Primary Sector. The primary sector in an economy has a direct interface with the environment for purposes of production. ...
  • Secondary Sector. ...
  • Tertiary Sector.

What is the poorest state in the United States? ›

Mississippi. Mississippi is the poorest U.S. state, with 18.8% of its residents living in poverty. The state also has the highest child poverty rate, with 27.9% of its under-18 population meeting federal poverty guidelines. Fifteen percent of residents are food insecure.

Which US cities have the best economy? ›

Top 10 Best-Performing Large Cities
Metropolitan Statistical Area / Metropolitan Division2020 Rank2018 Rank
San Francisco-Redwood City-South San Francisco, CA14
Provo-Orem, UT21
Austin-Round Rock, TX33
Reno, NV411
6 more rows

What city has the best economy? ›

The number 1 spot is taken up by New York City, totalling $1.77 trillion in 2018.

What is the fastest growing economy in the world? ›

China is expected to be the fastest growing economy per capita, even if the projection finds growth to be slowing from what the country achieved over the past decade.

Who runs the world economy? ›

Many people think that the global economy is controlled by governments of the largest economies in the world, but this a common misconception. Although governments do hold power over countries' economies, it is the big banks and large corporations that control and essentially fund these governments.

What states are financially in trouble? ›

RankStateFY20/FY21 Revenue Shortfall Estimate
1Idaho-20.3%
2Wyoming-28.5
3South Dakota-10.2
4Utah-10.3
46 more rows
Aug 31, 2020

What US states are not in debt? ›

The states with the least amount of debt are an interesting mix of states geographically. Mountain states, such as Idaho, Montana, Utah and Wyoming made the top-10 list, as did upper Midwest states like Nebraska, North Dakota and South Dakota. Alaska takes the No. 1 spot, with a tiny debt ratio of only 14.2%.

What is the best state to raise a family? ›

Massachusetts topped the report's list of the best states for families, in particular receiving high marks for education, affordability and health and safety. Following the Bay State were New York, Vermont, Minnesota and Nebraska.

Which US state has the weakest economy? ›

The three U.S. states with the lowest GDPs were Vermont ($36.1 Billion), Wyoming ($41.6 Billion), and Alaska ($55.0 Billion).

What are the top 10 economies in the United States? ›

Here are the 10 states with the highest GDP: California - 3,120,386 million.
...
Gross Domestic Product (GDP) by State
  • New York ($1,705,127)
  • Florida ($1,111,614)
  • Illinois ($875,671)
  • Pennsylvania ($788,500)
  • Ohio ($683,460)
  • Washington ($632,013)
  • Georgia ($627,667)
  • New Jersey ($625,659).

Does Texas have a better economy than California? ›

The economy of the State of Texas is the second largest by GDP in the United States after that of California. It has a gross state product of $2.0 trillion as of 2021. In 2011, Texas was home to six of the biggest 50 companies, and 51 in total, in the Fortune 500 (the third most after New York and California).

Which state has the fastest growing economy? ›

GDP by State: GDP Growth Over 1 Year
RankState1-Year Change (%)
1Hawaii8.8%
2Nevada8.2%
3California8.0%
4Tennessee7.6%
47 more rows
May 17, 2022

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