Personal finance company WalletHub conducted a comprehensive analysis of the strongest and weakest economies in the U.S. by state.
Thanks to thorough investigation into dozens of economic metrics, WalletHub was able to rank each state according to its overall economic strength score, as well as how well they rank in terms of Economic Activity, Economic Health and Innovation Potential.
Newsweek crafted the results into a map.
Why It Matters
The rankings incorporate overall economic might and other metrics concerning fiscal health and the social welfare of a state’s citizens. As WalletHub’s analysis demonstrates, the relative strength of an economy depends not only on gross domestic product (GDP) but also employment opportunities, median income levels enjoyed by the population and the conditions for businesses to prosper, which in turn can dictate where individuals choose to live and companies choose to invest.
What To Know
WalletHub’s overall ranking incorporated each state’s relative success across three main dimensions based on 28 individual metrics.
Economic Activity assessed GDP growth, the growth rate of companies in the state and other elements including exports per capita. Economic Health took into account employment rates, household incomes relative to a state’s cost of living, as well as several other social welfare measures. A state’s Innovation Potential was weighed according to such things as the share of jobs in high-tech or STEM fields and the overall level of “entrepreneurial activity.”
Below is the map showing each state’s total score across these metrics, along with its overall rank and ranking across the three indices.
Out of all 50 states, Massachusetts finished at the top with an overall score of 70.84, beating second-place Utah (69.18) by more than a point. As well as ranking first in terms of innovation potential, Massachusetts placed sixth in economic activity and 17th in economic health.
Utah, with a ninth-place economic health ranking and 10th in terms of innovation potential, was first in overall economic activity. The state has long been recognized in this category, ranking first in the recent ALEC-Laffer State Economic Competitiveness Index. It also led the nation in terms of economic growth between 2023 and 2024, its GDP increasing 4.5 percent to $235.7 billion, according to the Bureau of Economic Analysis.
Washington placed third at 68.97, thanks largely to its innovation potential, leading position in the new technology space and high tech-sector employment.
California, which recently overtook Japan to become the world’s fourth largest economy in terms of GDP, ranked fourth at 67.43. The state’s successes in economic activity and innovation are dragged down by its economic health rank of 47, with high unemployment and slow labor force growth offsetting its overall economic might.
At the bottom of the rankings were Hawaii (33.09), West Virginia (32.34) and Iowa (31.61) in 51st place (results included the District of Columbia in 12th place).
What People Are Saying
Massachusetts Governor Maura Healey: “Massachusetts is number one for education, health care and innovation. We’re the best state to be a woman, to have a baby and to be a working parent. So, it’s no surprise that we also have the best state economy.
“This recognition is a testament to the incredible businesses, universities and research institutions that drive our innovation economy and to the top-notch talent that continues to choose Massachusetts as the place to grow their careers and their futures.”
California Governor Gavin Newsom: “California isn’t just keeping pace with the world—we’re setting the pace. Our economy is thriving because we invest in people, prioritize sustainability and believe in the power of innovation. And, while we celebrate this success, we recognize that our progress is threatened by the reckless tariff policies of the current federal administration. California’s economy powers the nation, and it must be protected.”
WalletHub Analyst Chip Lupo: “A strong state economy doesn’t guarantee success for the state’s residents, but it certainly makes financial success more attainable. Factors like a low unemployment rate and high average income help residents purchase property, pay down debt and save for the future. The best state economies also encourage growth by being friendly to new businesses and investing in new technology that will help the state deal with future challenges and become more efficient.”
What Happens Next
WalletHub’s rankings may change significantly over the next year, depending on how each state performs across the assessed categories. Since last year’s analysis, multiple states have shifted significantly, including Tennessee, which fell from 16th place to 23rd, and Iowa, which dropped from the 44th spot to the very bottom of the overall rankings.
The post Map Shows US States With Best—And Worst—Economies appeared first on Newsweek.
