Fastest-Growing State Economies

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Mardi Gras in New Orleans, Louisiana10. Louisiana
> Pct. Change in GDP: 48.4%
> Pct. Change in Population: +1.4% (the second-smallest increase)
> Unemployment Rate: 8.1%
> Median Household Income: $42,492
> Change in Household Income: +38.3% (the biggest increase)
> Pct. Below Poverty Line: 17.3%

Louisiana's population has only moved up 1.4% in the last decade, due in part to the migration from the New Orleans area following Hurricane Katrina. A great deal of the state's economy is driven by the production of agricultural commodities, including cotton, soybeans, and cattle, which have risen in value over the past two years. The seafood industry is also a major employer, and it seems that it is recovering from the BP oil spill. Tourism has also improved since the hurricane. The other two major industries in the state – petroleum and natural gas – have benefited from booming energy prices.

9. Oklahoma
> Pct. Change in GDP: 48.4%
> Pct. Change in Population: +8.7%
> Unemployment Rate: 5.6%
> Median Household Income: $41,664
> Change in Household Income: +28.5%
> Pct. Below Poverty Line: 16.2%

Oklahoma's GDP has been aided by the seventh-lowest corporate tax rate in the country, which has likely helped draw a number of companies to the state. The energy industry is by far the state's largest. Major employers in this sector include Devon Energy and Chesapeake Energy. The rebound of the energy sector from the middle of the 2000's through this year has helped keep unemployment at a low 5.6%. The transportation and utilities sectors, which are traditionally stable job bases, employed nearly 300,000 people.

8. Montana
> Pct. Change in GDP: 48.9%
> Pct. Change in Population: +9.7%
> Unemployment Rate: 7.3%
> Median Household Income: $42,322
> Change in Household Income: +29.1%
> Pct. Below Poverty Line: 15.1%

Montana, like several of the other fastest growing states by GDP, benefits from a small GDP, and a similarly small population. In 2000, the state had a GDP of just $31.8 billion, the third-smallest in the country. Consequently, even the modest rise it saw over the course of the decade was enough to account for a major percentage increase. The boom in commodities prices has clearly helped the state, which is a hub for lumber, gold, coal, and mineral extraction. The economy of Montana may also be helped by the fact that it has no sales tax.

Las Vegas casino7. Nevada

> Pct. Change in GDP: 51.4%
> Pct. Change in Population: +35.1% (the biggest increase)
> Unemployment Rate: 12.5%
> Median Household Income: $53,341
> Change in Household Income: +16.6%
> Pct. Below Poverty Line: 12.4%

It is surprising that Nevada makes this list. The state's numbers are somewhat misleading unless they are broken into two parts. The first was the growth period, which lasted from 2000-2006. During this time, tourism was booming, and the value of real estate was moving up by the double digits in most years. Nevada's population grew by more than 35%, the most in the country. In the last few years of the decade, the state's economy took a turn for the worse. Construction, one of the most important industries in the state, has been decimated by the collapse of home values. The state's largest employers, which include Las Vegas Sands and MGM Resorts, have suffered because of a downturn in tourism. These losses have not been enough to offset the massive gains in the first two-thirds of the decade.

6. Texas
> Pct. Change in GDP: 52.1%
> Pct. Change in Population: +20.6%
> Unemployment Rate: 8%
> Median Household Income: $48,259
> Change in Household Income: +25%
> Pct. Below Poverty Line: 17.2%

It is extraordinary that Texas makes this list because its GDP is second in the country at $1.1 trillion. That is more than the GDP of South Korea or Mexico. Texas has been helped by the tremendous diversity of its economy. While energy is the dominant sector, as both Exxon Mobil and ConocoPhillips are headquartered there, the state also includes several huge technology companies including Dell, AT&T, and Texas Instruments. Fifty-one of the Fortune 500 companies are located in Texas. Texas also does not have a state income tax, which tends to stimulate consumer spending. Texas' population grew 27% from 1970 to 1980, 19% from 1980 to 1990, 23% from 1990 to 2000, and 21% from 2000 to 2001. Over that entire 40-year period, it's population grew by 116%.

5. Utah

> Pct. Change in GDP: 52.1%
> Pct. Change in Population: +23.8%
> Unemployment Rate: 7.4%
> Median Household Income: $55,117
> Change in Household Income: +15.9%
> Pct. Below Poverty Line: 11.5%

Utah almost certainly benefits from state's small population. Utah's GDP improvement has been helped by its largest employment sectors, which are mining, cattle ranching, and tourism. The state has five national parks.

4. South Dakota
> Pct. Change in GDP: 57%
> Pct. Change in Population: +7.9%
> Unemployment Rate: 4.9% (third lowest)
> Median Household Income: $45,043
> Change in Household Income: +23.5%
> Pct. Below Poverty Line: 14.2%

South Dakota's population is only slightly over 800,000, about the same as the population of San Fransisco. The state has no Fortune 500 headquarters. Agriculture is at the core of the state's economy. This includes the raising of cattle and hogs, along with the growth of cotton, soybeans and wheat. South Dakota is also a major provider of ethanol, and the second largest employer in the state is the Ellsworth Air Force Base.

alaska3. Alaska

> Pct. Change in GDP: 66.6%
> Pct. Change in Population: +3.3%
> Unemployment Rate: 7.3%
> Median Household Income: $66,953 (the highest)
> Change in Household Income: +26.7%
> Pct. Below Poverty Line: 9% (third lowest)

Alaska also has no Fortune 500 headquarters. It is, however, highly dependent on the rapidly growing energy sector, and it is easy for the state to post a large percentage growth in GDP, because its population is so small, only slightly larger than 700,000 people. Median household income is one of the highest in the country because of the generous compensation in the many jobs in the petroleum and mining industries.

2. North Dakota

> Pct. Change in GDP: 76.1%
> Pct. Change in Population: +4.7%
> Unemployment Rate: 3.3% (the lowest)
> Median Household Income: $47,827
> Change in Household Income: +32.9%
> Pct. Below Poverty Line: 11.7%

North Dakota is another state which is able to show a high percentage GDP growth because the 2000 base number, $17.7 billion, is so small. The state's population is only about 675,000. The state's GDP is dominated by energy extraction and agriculture. North Dakota is the largest producer of barley, oats, and Durham wheat. Sharp rises in agricultural prices have helped the state's economy.

1. Wyoming
> Pct. Change in GDP: 98.5
> Pct. Change in Population: +14.1%
> Unemployment Rate: 6%
> Median Household Income: $52,664
> Change in Household Income: +32.9%
> Pct. Below Poverty Line: 9.8%

Wyoming, the last state on our list, also benefits from having a very low starting GDP. Its largest city, Cheyenne, has only 60,000 people, and the state is the least populated in the United States, with 565,000 residents. The state's GDP is dominated by the mining of coal, natural gas, methane, and crude oil. It also has a large tourism business, aided by its popular national parks, which are visited by more than 6 million people per year.

Douglas A. McIntyre, Michael B. Sauter
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