The U.S. economy as a whole grew a healthy 2.6 percent last year. While this headline number paints a picture of an economy on a stable growth path, it doesn’t take into account discrepancies throughout the country. Some states are booming, while others haven’t been able to climb out of recession. Here are a few ways to analyze the economic health of individual U.S. states.
Compare growth rates
One of the easiest ways to gauge the health of the economies between states is to compare how fast each is growing. States with healthy economies tend to maintain a solid and consistent growth trajectory. Head to the website of the Bureau of Economic Analysis (BEA), which provides a plethora of data on the economies of all 50 states. In order to find the percentage of growth in a state, select the ‘interactive data’ tab at the top of the homepage. Next, click on “GDP and personal income” under “regional data” on the right. Select “begin using the data” and “annual GDP by state.” From here, you can choose what type of GDP measurement you’d like to use, as well as the metric (in this case percent change) and what states you want to look at.
• Compare the growth rates between states deemed to be “highly regulated” like California, with states that are “less regulated” like Louisiana.
• Look at how the drop in oil prices has affected the year-over-year growth of an oil-producing state like North Dakota.
Compare per capita GDP
A second way to examine the economic health of different states is by looking at per capita GDP statistics. The per capita GDP number is the size of the state’s overall economy divided by the state’s population. States that are richer and more economically sound have higher per capita GDPs than states that aren’t as healthy. To find the information, head to the BEA website. Follow the same steps as above and choose “per capita real GDP” under the “annual GDP by state” tab. Then choose the state you’d like to see.
• Compare your state’s per capita GDP to that of an individual country with roughly the same population. It’s interesting to see how respective states would fare if they were sovereign nations.
Compare annual wages
A third way to look at the economic health of varying states is by cross-examining the average annual wages reported by the Bureau of Labor Statistics (BLS). Head to the BLS website and click “subject” from the top menu. Choose “pay and benefits overview,” then “wages by area and occupation” and select “by state.” If you want to dig deeper, the BLS allows you to choose between all occupations and specific job types.
• Write a story comparing the average annual wage of your state with the average annual wage of your local metropolitan area or community.
Look at a ranking system
Another great way to look at how states stack up economically is by utilizing a formal ranking system. Business Insider does a thorough investigation on this topic and regularly produces a list of all 50 states (plus Washington, D.C.) ranked on the overall strength of their economies. The online news source considers seven metrics in their calculations: unemployment rates, per capita GDP, average weekly wages, recent growth rates for nonfarm payroll jobs, GDP, house prices and wages.
The Mercatus Center at George Mason University produces a similar yearly index on the overall economic health of states. Unlike the Business Insider list, the Mercatus Center examines data such as short- and long-term debt and other key fiscal obligations such as unfunded pensions and healthcare benefits.
• Use the Business Insider or Mercatus Center rankings to compare your state to the neighboring states in your region.