[Vision2020] The States With the Best and Worst Economies

[Kenneth Marcy]

*The States With the Best and Worst Economies **
*
*https://tinyurl.com/y7dbnjgz*

By several measures, the national economy is the strongest it has been
in decades. The U.S. monthly unemployment rate now sits comfortably
below 4%, and we are in the second longest period of GDP growth since
World War II.

In most states, unemployment has improved in recent years as well, but
that is not to say every state economy is equally healthy. Some states
are experiencing an economic boom, while others continue to struggle
with job losses, poor GDP growth, and poverty.

Economic vitality is as much about growth as it is about a state’s
ability to support its population — with jobs, education, and economic
opportunities. In turn, employed, better-paid, and better-educated
residents contribute to economic growth.

24/7 Wall St. reviewed economic growth, poverty, unemployment, job
growth, and college attainment rates to compare and rank state
economies. The best ranked states tend to have fast-growing economies,
low poverty and unemployment rates, high job growth, and a relatively
well-educated workforce, while the opposite is generally the case among
states with the worst ranked economies.

Residents of top-ranked state economies tend to be relatively affluent.
Though the median household income was not used to rank states, it
exceeds the national median in 9 of the 10 best state economies. A
population with greater disposable income may be more able to purchase
goods and services, which helps the success of local business.

“The national economy is continuing to recover, and some sectors are
doing better than others,” Martin Kohli, chief regional economist at the
Bureau of Labor Statistics, explained in a conversation with 24/7 Wall
St. “Nationally, we’ve consistently seen relatively large job growth in
health care, and relatively large growth in leisure and hospitality, and
strong growth in professional and business services.” Many of the states
with growing economies have outsized concentration of employment or
strong growth in these industries.

*Click here to see the best and worst state economies*
<https://247wallst.com/special-report/2018/08/15/the-states-with-the-best-and-worst-economies-2/2/>
*Click here to read our methodology*
<https://247wallst.com/special-report/2018/08/15/the-states-with-the-best-and-worst-economies-2/12/>

Jobs in many high-paying industries require college education. And
states with well-educated labor forces often attract businesses in such
industries. According to Kohli, occupations that are expected to grow
the most over the next several decades are also the ones that tend to
require more education.

“I think it is well-known historically that higher levels of education
are associated with lower levels of unemployment and higher earnings,”
Kohli said. “Many of the sectors that are growth sectors … typically
require people with higher levels of education.”

People with higher educational attainment also are more likely to have
greater job stability and higher incomes, each of which are boons for a
region’s economy.

Many of the states with contracting economies have a high reliance on
jobs in energy extraction industries like coal mining and oil
production. Four of the five worst ranked states on this list —
Louisiana, West Virginia, Alaska, and New Mexico — also have among the
largest mining sectors relative to total state employment.

When the price of oil collapsed beginning in 2014, many oil-dependent
state economies suffered as a result. “These are states that are very
reliant on energy — either coal mining or oil drilling — and they’re not
as diversified as the states at the top of the list,” Kohli said.


Source: knowlesgallery / iStock

*9. Idaho*
*> 5 yr. GDP annual growth rate:* +2.4% (6th largest increase)
*> 2017 GDP:* $62.6 billion (10th smallest)
*> June 2018 Unemployment:* 2.9% (tied — 7th lowest)
*> 5 yr. annual employment growth:* +2.4% (4th largest increase)

States with relatively affluent populations tend to prosper. Among the
states with the 10 highest ranked economies, Idaho is the only one with
a median household income that trails the national median. The typical
state household has an income of $51,807 a year, compared to a national
median household income of $57,617.

However, the state makes up for its low incomes by ranking among the
best states in the country in GDP and employment growth, as well as by
having one of the lower unemployment rates in the country. Between 2012
and 2017, state GDP and employment each grew at an average annual rate
of well over 2%. The state’s 2.9% unemployment rate is nearly a full
percentage point below the national rate of 3.8%.


*https://tinyurl.com/y7dbnjgz
*



*Ken*


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