Economic growth is now rising only in eleven states, led by Texas with a 3.3% annual growth pace. The only other large states that are still expanding are Colorado, New York, Connecticut, Virginia and Wisconsin. Wisconsin is the lone state with faster economic growth in the last three months (through July) than in the previous year.
Virginia, New York, Connecticut and New Hampshire are enjoying the tail end of the usual strong growth in business services at the end of an economic expansion period. They are likely to fall out of the top growth list in the next few months as Massachusetts already has. Except Wisconsin, all of the other states that are still expanding are in the resource belt in the center of the country with expanding income from energy, minerals and farm products. This should persist for several more months.
The largest declines in economic growth are in the Pacific Northwest — Washington (-6.4%) and Oregon (-5.2%), the Rocky Mountains — Idaho (-6.7%), Nevada (-4.8%), Montana (-4.0%) and Arizona (-4.0%) and the Midwestern auto manufacturing centers — MI (-6.0%), KY (-5.0%) and OH -(4.3%) plus RI(-4.0%).
The payback for underestimating residential mortgage risk is largely responsible for the slow growth in the West; the slowdown in the world commodity price boom is now also contributing. The Midwest is suffering from job losses in the motor vehicle industry. Rhode Islands’ large jewelry and boat industries are depressed as always in a slow economy.
| State Economic Activity Index Ann. % change — last 3 months |
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| Northeast | -0.6% | Midwest | -2.9% | |||
| New England | -0.9% | Great Lakes | -3.2% | |||
| Mid-Atlantic | -0.5% | Plains | -2.3% | |||
| South | -0.2% | West | -2.3% | |||
| South Atlantic | -1.2% | Rocky Mountain | -2.8% | |||
| South Central | 1.1% | Pacific | -2.0% | |||
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Ranking States by Recent Economic Performance — August 2008
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