Did you know that Florida, California, Texas and New York have economies so big that if they were countries, they would rank in the top 20 in the world?
Personal finance company WalletHub just released a study that ranks all 50 states by determining the states with the best and worst economies, based on metrics like changes in each state’s GDP, unemployment rates and growth in number of businesses. And Florida placed in the top 10 on the “best” list.
“A strong state economy doesn’t guarantee success for the state’s residents, but it certainly makes financial success more attainable,” WalletHub Analyst Cassandra Happe said in the study.
“Factors like a low unemployment rate and high average income help residents purchase property, pay down debt and save for the future.”
Here’s which state placed first on WalletHub’s list of the states with the best economies, where Florida ranked and why.
Which U.S. state has the best economy?
According to WalletHub’s study, Washington has the best state economy in the U.S. for a variety of reasons.
Washington has the second-highest share of jobs in high-tech industries and the second-highest share of STEM professionals nationwide.
“In addition, Washington has the fourth-highest percentage of firms that are listed on the Technology Fast 500 list, and the third-highest number of invention patents per capita. This business growth and new technology will expand the economy even more in the future,” the study says.
“To top things off, new immigrants to the Evergreen State are the fifth-most educated in the country, and the state has the sixth-highest median household income after adjusting for the cost of living.”
What are the top 10 economies in the United States?
According to WalletHub’s rankings, Florida has the seventh best economy in the U.S.
Florida ranked high in two individual categories as well, taking first place for the most startup activity and second place in nonfarm payrolls.
Nonfarm payrolls is a monthly statistic that measures the amount of jobs in the state, excluding farm workers, private household employees, non-profits, local government, unincorporated business owners and active military service members.
Here are the top 10 best state economies in the U.S., according to WalletHub’s study:
- Washington
- Utah
- Massachusetts
- Texas
- California
- Colorado
- Florida
- North Carolina
- District of Columbia
- Arizona
What is the best indicator of a state’s economy?
GDP (gross domestic product) is the most common indicator that economists look at to determine the health of a country or region’s economy.
GDP is, in short, the total market value of the final goods and services produced within a country, state or region within a year. The Bureau of Economic Analysis breaks down the four-part formula used to find GDP in its “What is GDP?” guide.
But GDP isn’t the only economic indicator that matters.
“The conventional indicators are state-level GDP, unemployment, inflation, and government budget. They measure total income, the status of the labor market, the cost of living, and government activities,” Libo Xu, an assistant professor of economics, told WalletHub.
But there are two other less conventional indicators that Xu mentioned in the study.
“One is the distribution of people by age group. The state that maintains and attracts many young people will perform better economically,” Xu said.
“Another indicator is the share of small businesses in the economy. Small businesses offer significant job opportunities, even though their monetary value and size are small. They matter for an energetic labor market.”
In January, Florida took third place on WalletHub’s list of the best states to start a business in 2024.
“Florida’s working-age population (age 16-64) is growing much faster than in other states…” the January study said.
“Florida also has more entrepreneurs and startup firms relative to its population than most other states.”
