A new report from personal finance firm WalletHub has revealed the states with the strongest and weakest economies in the U.S., ranking all 50 states and the District of Columbia based on economic activity, health and innovation potential.
Top-ranking states
According to the study, Massachusetts claimed the top spot with an overall score of 70.84, narrowly surpassing Utah’s 69.18. The Bay State earned first place in innovation potential, sixth in economic activity and 17th in economic health. Its strong presence in high-tech sectors and STEM employment contributed heavily to its lead. Utah secured second place, boasting the nation’s most potent economic activity. The state ranked ninth in economic health and 10th in innovation potential, reflecting both steady growth and a favorable environment for business development. Utah also led the country in GDP growth between 2023 and 2024, rising 4.5% to $235.7 billion, according to the Bureau of Economic Analysis. Washington followed closely in third with a score of 68.97, driven primarily by its innovation potential and thriving technology sector.
California
California placed fourth at 67.43, bolstered by its world-leading GDP — which recently surpassed Japan’s — but hampered by economic health challenges. The Golden State ranked just 47th in that category, weighed down by high unemployment and slow labor force growth despite its dominance in economic activity and innovation. Governor Gavin Newsom responded to the findings, emphasizing California’s global influence. “California isn’t just keeping pace with the world — we’re setting the pace,” he said. “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.”
State GDP growth
The rankings were determined by evaluating 28 individual metrics across three categories: economic activity, which measured GDP growth, company expansion and exports per capita; economic health, which accounted for employment rates, household incomes adjusted for cost of living and other social welfare indicators; and innovation potential, which examined high-tech employment, STEM job share and entrepreneurial activity. While top-performing states saw gains fueled by technology and innovation, several states languished at the bottom of the list. Hawaii, West Virginia and Iowa occupied the final three spots, with Iowa landing in last place at 31.61. These states struggle with slow growth, limited innovation and weaker labor market performance.
Year-to-year shifts
The report also highlighted significant year-over-year shifts. Tennessee, for instance, fell from 16th to 23rd place, while Iowa dropped from 44th to last place. WalletHub analysts noted that economic rankings are highly dynamic and can fluctuate based on changes in job markets, business growth and innovation trends. With the District of Columbia included in the study, ranking 12th overall, WalletHub’s 2024 report paints a detailed picture of the shifting economic landscape across the nation. As states compete for investment, talent and innovation leadership, the coming year could bring further changes in the balance of America’s strongest and weakest economies.
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Author: Joshua Wilburn
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