The economic conditions in these 25 states stand out as particularly challenging, posing a substantial risk to their populations. Navigating the trajectory of the US economy is a formidable task in the present circumstances. Predicting whether a recession looms, envisioning a soft landing, or anticipating an alternate outcome adds complexity. The intricacy intensifies when factoring in the nuanced regional variations that further complicate the overall economic landscape.
Hawaii
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The Aloha State bore a severe impact from the pandemic. The pivotal tourism industry, crucial to Hawaii’s economic fabric, suffered a substantial setback, resulting in a staggering $18.7 billion loss of production from early 2020 to the middle of last year, as highlighted by University of Hawaii researchers. Although there’s a welcome return of tourists, and then some, accounting for inflation becomes pivotal, presenting a nuanced picture of the state’s ongoing recovery, as emphasized by the researchers.
New Hampshire
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Despite indications of a stabilizing economy in the Granite State, the general sentiment among New Hampshire residents doesn’t align with the positive trajectory. According to the latest BIA Report on Consumer Confidence in May, out of 1,105 New Hampshire residents surveyed, a substantial 49% expressed that their household’s financial situation has worsened compared to a year ago, with only 11% noting improvement. This stark contrast in perceptions may find its roots in the state’s sluggish economic performance, providing context to the prevailing sentiments.
Louisiana
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Though job growth resumed in Louisiana last year, economic expansion has been notably sluggish. The housing market faces challenges, too, with over 10% of Louisiana mortgages underwater in the first quarter of this year, marking the highest figure nationally, as per Attom Data Solutions. Pew’s estimation underscores the financial vulnerability, suggesting that relying solely on fund balances would sustain the state for just over three weeks. Meanwhile, Worth Insurance reports a Louisiana homeownership rate of 70.1%, exceeding the national average by 6.9%, albeit showing a 4.1% decrease since 2005. Presently, Louisiana’s homeownership stands 2.0% higher than the 15-year average rate.
Iowa
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A surge in interest rates and inflation challenges Iowa’s predominantly agricultural economy, evident in the state’s economic indicators. The Hawkeye State experienced the nation’s third-slowest economic growth last year, with job expansion and new business formations registering similarly lackluster figures, according to the Census Bureau. Fortunately, the thrifty nature of Iowans contributes to a solid debt rating, mitigating the impact on the state’s overall financial health. Despite these economic headwinds, Iowa’s population showed a modest increase of 0.2 percent, reaching 3.2 million in 2023, according to the Iowa Torch.
Alaska
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Alaska ranked last in economic performance last year, experiencing a 2.4% contraction primarily due to dwindling oil production. It reached its lowest output since 1976, as per the Energy Department. This economic downturn necessitated difficult decisions, as evidenced by Governor Mike Dunleavy’s recent veto of over $200 million from the state’s Fiscal 2024 budget, including a significant cut of over $87 million in school funding. Alaska is exploring alternative revenue streams, considering selling carbon offset credits to safeguard its extensive public lands. However, the viability of this approach remains uncertain and could take years to materialize, if it does at all.
New York
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New York experienced a substantial economic setback last year, with its GDP contracting by 5.9%, surpassing the overall decline the entire US GDP suffered. This places New York in the 47th position out of all 50 states for economic growth, highlighting the severity of the state’s financial challenges compared to the national average. The significant contraction in New York’s GDP indicates a more pronounced struggle in its economic recovery compared to most states nationwide.
North Dakota
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In the Peace Garden State, a considerable reliance on agriculture and energy industries presents economic challenges amid rising rates and inflation. Census Bureau data reveals a sluggish pace in new home construction in North Dakota, potentially impacting supply yet not significantly influencing prices. The intricate interplay of these factors underscores the complex dynamics affecting the state’s economic landscape in the current environment.
Illinois
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Illinois grapples with an economy diminished by $31.4 billion, a consequence of ongoing population losses. Even before the disruptive impact of COVID-19 and government shutdowns, the state faced reduced economic growth due to population decline. Unfortunately, the pandemic and associated measures have accelerated the pace of population loss, exacerbating Illinois’s financial challenges. This interplay of factors underscores the compounding difficulties in the state’s economic landscape.
Arkansas
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Arkansas is the 35th largest economy among states. Washington, DC, held a share of 0.6% in the US economy during the 1st quarter of 2023. This repetition of the state’s ranking and economic contribution emphasizes its modest standing in the national economic landscape. Despite its middle-of-the-road position, Arkansas plays a tangible role in the broader economic picture, contributing to the intricate tapestry of state-level economies that collectively shape the United States’ financial landscape.
Connecticut
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The Nutmeg State has made commendable progress in stabilizing its fiscal situation, which is evident in the burgeoning budget surplus this year. As per data from the Pew Charitable Trusts, this surplus is instrumental in reinforcing reserves that still need to catch up. Connecticut’s robust GDP growth in the previous year is an additional positive indicator. Employment opportunities are on the rebound, albeit not yet reaching pre-pandemic levels, as highlighted by the Labor Department, indicating a gradual but promising recovery.
Vermont
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Vermont holds the distinction of having the lowest GDP among all the states in the US, reporting a GDP of $37.6 billion. This small state, with a population of just under 650,000, relies predominantly on agriculture and tourism to drive its economy. Renowned for products like maple syrup and dairy, as well as outdoor activities such as skiing and hiking, Vermont showcases a unique economic profile. Despite its modest GDP, the state boasts one of the country’s highest entrepreneurship rates, supported by government policies fostering small business development.
Wisconsin
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Wisconsin’s GDP declined for the third consecutive quarter, albeit a marginal improvement from the 2.9% decrease in the first quarter. Unfortunately, Wisconsin is among the minority, one of only six states with a shrinking economy during the second quarter, ranking 46th nationally. This consistent contraction in the state’s GDP underscores the persisting economic challenges, placing Wisconsin in a less favorable position than many other states nationwide.
Maine
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The projected Supplemental Poverty Measure for Maine in 2021 stands at 5.1%, indicating a notable decrease from the 9.5% recorded in 2018. Additionally, for children under 18 in the state, the projected Supplemental Poverty Measure for 2021 is 1.9%, reflecting a substantial reduction from the 7.2% reported on a comparable measure in 2018. These figures signify positive strides in addressing poverty-related challenges, particularly among the younger demographic, in Maine over the specified timeframe.
New Jersey
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New Jersey currently holds the 47th position in the United States concerning its economic outlook. In 2022, there was a slight improvement in poverty rates, with 9.7% of New Jersey’s population residing below the poverty line. This marks a decrease from the prior year when approximately 10.2% of the state’s residents were below the poverty threshold. While the state’s economic outlook ranking emphasizes existing challenges, the reduction in poverty rates signals positive strides in New Jersey’s socioeconomic landscape.
California
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The prevalence of high-income inequality in California aligns with elevated levels of poverty and stagnation in upward mobility. A substantial 5 million Californians find it challenging to meet their basic needs, indicative of a pressing socioeconomic concern. Moreover, the ongoing difficulty ascending the economic ladder over time compounds the issue, emphasizing the intricate relationship between income distribution, poverty, and limited upward mobility within the state.
Missouri
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In 2022, Missouri faced a rise in poverty rates, with 13.2% of its population residing below the poverty line. This marked an increase from the preceding year, where approximately 12.7% of Missourians were below the poverty threshold. The incremental change in poverty levels within this one-year timeframe underscores the evolving economic dynamics within the state, necessitating ongoing attention and strategies to address the challenges a portion of Missouri’s population faces.
Rhode Island
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Last year, according to Census data, Rhode Island witnessed a sluggish pace in economic and job growth, further compounded by a decline in population. Despite running a budget surplus, Rhode Island faces a potential constraint as Pew estimates suggest that it could sustain itself for merely about a month on its current fund balance. This juxtaposition of economic dynamics underscores the delicate financial situation Rhode Island is currently navigating.
New Mexico
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New Mexico grapples with economic challenges, standing as a comparatively poor state and ranking among the lowest in the country concerning per capita income. Approximately half of its economic activity hinges on the service sector. At the same time, the remaining portion is predominantly centered on extractive industries, including mining and oil production. This economic profile underscores the state’s reliance on these sectors and the disparities in income levels, shaping New Mexico’s economic landscape in a way that demands attention and strategic considerations for sustainable growth.
Kentucky
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Kentucky anticipates a decline in agricultural cash receipts, projected to decrease from a record high of $8.3 billion in 2022 to $8.1 billion in 2023. This reduction primarily results from diminished earnings in corn, soybeans, dairy, and tobacco, offsetting cattle and wheat receipts gains. The sluggish growth in Kentucky is attributed to various factors, including a shortage of skilled workers and challenges in attracting innovative businesses and experienced professionals to the state, with rural areas particularly affected by these issues.
Delaware
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Delaware positions itself as the 43rd largest economy among states and Washington, DC, holding a share of 0.3% in the US economy during the 3rd quarter of 2023. This repetition of the state’s ranking and economic contribution emphasizes its modest standing in the national economic landscape. Delaware plays a tangible role in the broader economic picture despite its middle-of-the-road position, contributing to the intricate tapestry of state-level economies that collectively shape the United States’ financial landscape.
South Dakota
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In 2022, South Dakota faced a rise in poverty rates, with 12.5% of its population residing below the poverty line. This marked an increase from the preceding year when approximately 12.3% of South Dakota residents were below the poverty threshold. The incremental change in poverty levels within this one-year timeframe underscores the evolving economic dynamics within the state, necessitating ongoing attention and strategies to address the challenges a portion of South Dakota’s population faces.
Wyoming
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With a GDP of $44,323,000,000 and a per capita GDP of $76,577, Wyoming’s economic landscape centers primarily on mining, encompassing coal, oil, natural gas, and wind energy production. Despite these substantial financial contributors, the state’s overall economic standing is comparatively modest. This suggests that, while Wyoming plays a vital role in energy-related industries, its economic performance, when measured against other states, reflects particular challenges that warrant attention for sustained growth and development.
Oklahoma
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In 2022, Oklahoma grappled with a poverty rate of 15.7%, significantly higher than the national average of 11.5%, earning the state the 8th highest poverty rate in the country. This ranking remained unchanged from the previous year. Furthermore, alarming statistics revealed that 1 in 5 Oklahoma children lived at or below the federal poverty level in 2022. In the 4th quarter of 2022, gross job losses constituted 6.0% of private-sector employment in Oklahoma, surpassing the national rate of 5.9%. This data underscores the significant economic challenges faced by the state during this period.
Mississippi
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A May report from a state legislative watchdog delivered concerning news, indicating that all funding metrics for Mississippi’s public pension system hit a worrisome “red signal-light status.” The severity of this situation prompted the pension system’s board to enforce a 5% hike in the required contributions from employers, encompassing local governments. However, many municipalities argue they need more financial means for such contributions, exemplifying the challenging economic predicament facing the state of Mississippi.
West Virginia
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Last year, the Mountain State added a mere 1,400 jobs, resulting in employment figures that linger below pre-pandemic levels, as reported by the Labor Department. Additionally, West Virginia’s housing market is displaying signs of strain, notably marked by an upswing in foreclosures at the onset of the current year, indicating a multifaceted challenge for the state’s economic landscape.
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