Which state has had the best economy in 2016? The worst?(Read article summary)
The past year of economic growth has left some states faring better than others, according to a recent WalletHub analysis.
Last year the US economy performed very well, thanks to a strong dollar and job gains. Yet that kind of banner performance hasn’t uniformly been uniformly felt throughout the country, and some states are experiencing better economic performance than others.
Keeping these disparities in mind, WalletHub ranked all 50 states and Washington, D.C. according to their economic performance related to three factors: "Economic Activity," "Economic Health" and "Innovation Potential."
Utah emerged as the top performer across all relevant metrics, including GDP growth and unemployment rate. The Beehive State holds the most independent-inventor patents per 1,000 working-age residents, and is in the top five states for the most venture-capital funding per capita, a list that also includes California, Massachusetts, and New York.
California, meanwhile, emerged from a post-recession drop in economic output to become the seventh-largest economy in the world. The state's gross domestic product (GDP) was $2.3 trillion in 2014, larger than Brazil’s $2.2 trillion. Professional and technical jobs, such as those associated with Silicon Valley, have surged, propelling California to third on WalletHub's list.
Mississippi falls at the bottom of the ranking. It has one of the lowest rates of GDP growth, coupled with one of the highest unemployment rates. Mississippi’s unemployment rate was 6 percent in April, according to the Bureau of Labor Statistics.
Illinois, ranked 29th, has been submerged in a fiscal crisis for the past two years. In June, the Illinois General Assembly failed to reach consensus on a balanced budget for the second straight year in a row. A separate budget intended to fund school districts in the state also failed to garner unanimous support. Illinois GDP is $609.6 billion.
While 20th-ranked Michigan is not in the same dire straights as Illinois, the water crisis affecting Flint has permeated the state. The Bureau of Labor Statistics reports that the unemployment rate in Michigan is 4.8 percent, while the unemployment rate in Flint is 4.9 percent. Michigan state GDP is $382 billion.
The economy is also growing more slowly at the national level. Following the robust job growth and steady wage and income gains seen during the first four months of the year, the US economy is now growing at a more moderate pace. The current GDP growth rate is 2.4 percent, according to The World Bank.
May’s job report, released last week, at least in the short term. Following a record 200,000 jobs added in March, and another 156,000 in April, the US economy added only 38,000 jobs in May, with the Verizon strike contributing to that decline. Although the unemployment rate dropped to 4.7 percent, this was primarily due to many job-seekers removing themselves from the job search. Wages also dipped slightly, increasing by 5 cents in May after increasing 9 cents in April.
Some economists have said that rather than indicating a long-term decline, May’s jobs report merely indicates that the pace of hiring and overall economic activity are coming back into closer alignment.
"Employment sometimes lags economic activity, which means the weakening trend in the first five months of this year may simply reflect the sharp slowdown in the economy in the first quarter, exacerbated in April and May by a shift of some seasonal hiring," Chris Low, chief economist at FTN Financial in New York, told Reuters last week.