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Washington and Utah are the states with the best economies in 2024, while many in the South are struggling

Cork Gaines   

Washington and Utah are the states with the best economies in 2024, while many in the South are struggling
Washington state secured the top spot due to its performance in both economic activity and innovation potential. Caroline Purser / Getty Images
  • WalletHub's report ranks state economies based on their economic activity, health, and innovation.
  • Washington leads the list driven by high-tech jobs and STEM professionals.

States like Washington, Utah, Massachusetts, Texas, and California may not seem like they have much in common, but each has a strong economy that's helping to fuel national growth.

Those five states have the best economies, according to a new ranking of all 50 states and DC by financial services company WalletHub. Meanwhile, Mississippi, Hawai'i, West Virginia, Arkansas, and Louisana have the worst.

"A strong state economy doesn't guarantee success for the state's residents, but it certainly makes financial success more attainable," Cassandra Happe, a WalletHub analyst, wrote in the report. "Factors like a low unemployment rate and high average income help residents purchase property, pay down debt, and save for the future."

To determine the best state economies, WalletHub compared the 50 states and DC across three categories: economic activity, economic health, and innovation potential. Each of the three categories was evaluated using 28 metrics of varying weights, including share of fast-growing firms, unemployment rate, and entrepreneurial activity.

"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," Happe wrote.

Washington secured the top spot due to its performance in both economic activity and innovation potential. The state's economy benefits significantly from high industry research and development investment levels, positioning it at the forefront of technological advancement. After all, Amazon and Microsoft are headquartered in the state.

Source: WalletHub

Additionally, people who move to Washington are the fifth-most educated in the country, contributing to the state's sixth-highest median household income after adjusting for the cost of living. A November report from Bank of America based on internal customer data showed that people who move to Seattle for a new job receive the largest pay raises among all US cities.

Utah was the runner-up with the second-highest median annual household income after adjusting for the cost of living. The state also has a healthy labor market, featuring one of the lowest unemployment rates in the country and substantial growth in its civilian labor force.

Meanwhile, several states in the south are among those with the lowest rankings. Many of the states scored low across the board as they struggled with issues like high unemployment rates and low household incomes.

Here are the top five states, followed by the five states ranked the lowest.

1. Washington

1. Washington
Seattle.      halbergman/Getty Images

Economic activity rank: 1

Economic health rank: 15

Innovation potential rank: 2

2. Utah

2. Utah
Salt Lake City.      Denis Tangney Jr/Getty Images

Economic activity rank: 7

Economic health rank: 1

Innovation potential rank: 10

3. Massachusetts

3. Massachusetts
Boston.      John Coletti/Getty Images

Economic activity rank: 11

Economic health rank: 43

Innovation potential rank: 1

4. Texas

4. Texas
Austin.      Brandon Bell/Getty Images

Economic activity rank: 2

Economic health rank: 7

Innovation potential rank: 24

5. California

5. California
San Diego.      Ron Thomas and Patty Thomas/Getty Images

Economic activity rank: 3

Economic health rank: 49

Innovation potential rank: 3

46. Louisiana

46. Louisiana
New Orleans.      John Coletti/Getty Images

Economic activity rank: 26

Economic health rank: 48

Innovation potential rank: 49

47. Arkansas

47. Arkansas
Little Rock, Arkansas.      Sean Pavone/Shutterstock

Economic activity rank: 40

Economic health rank: 38

Innovation potential rank: 47

48. West Virginia

48. West Virginia
Charleston, West Virginia.      Sean Pavone/Shutterstock

Economic activity rank: 32

Economic health rank: 45

Innovation potential rank: 51

49. Hawai'i

49. Hawai
Honolulu.      Art Wager/Getty Images

Economic activity rank: 49

Economic health rank: 32

Innovation potential rank: 50

50. Mississippi

50. Mississippi
Jackson, Mississippi.      Sean Pavone/Shutterstock

Economic activity rank: 48

Economic health rank: 50

Innovation potential rank: 45

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