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What makes a state’s economy thrive? From booming tech hubs to manufacturing powerhouses, the U.S. economy is shaped by the performance of its 50 states and the District of Columbia. While some states thrive due to strong innovation and business growth, others struggle with slow job creation and declining industries. Back in 2018, rankings of state economies showed clear winners and losers. But how do things look in 2025? Have the top-performing states maintained their dominance, or have new contenders emerged?
This post compares data from 2018 and 2025 (sourced from WalletHub) to reveal which states are leading and which are falling behind.
The Best and Worst State Economies in 2018. Image source: VisualCapitalis
Top State Economies: 2018 vs. 2025
The table below highlights the top 10 state economies in both years and any significant shifts in rankings.
Rank
2018
2025
Change
1
Washington
Washington
–
2
California
Utah
▲ +1
3
Utah
Massachusetts
▲ +1
4
Massachusetts
California
▼ -2
5
District of Columbia
Colorado
▲ +1
6
Colorado
Texas
▲ +3
7
Oregon
Idaho
▲ +5
8
New Hampshire
North Carolina
▲ +2
9
Maryland
Georgia
▲ +3
10
Delaware
Oregon
▼ -3
Key Takeaways: What’s Changed?
Washington Retains the Top Spot
In 2018, Washington was the leading state economy, and it has successfully maintained its #1 ranking in 2025. With strong contributions from tech giants like Amazon and Microsoft, a resilient job market, and high innovation levels, Washington continues to set the standard.
Utah and Massachusetts Rise
Utah has climbed to #2, fueled by booming tech and startup ecosystems, low taxes, and a strong labor market. Massachusetts also moved up a spot to #3, benefiting from biotech, education, and healthcare industries.
California Slips
Once a dominant economic powerhouse, California has dropped to #4. While still strong, challenges like high living costs, business relocations, and housing affordability issues have affected its ranking.
The Rise of Idaho and North Carolina
Idaho has made a big leap into the top 10, ranking #7 thanks to a fast-growing tech sector, a favorable business climate, and population growth. North Carolina, at #8, continues to see strong gains in biotech, finance, and manufacturing.
Texas and Georgia Make Gains
Texas has climbed to #6, driven by tech, energy, and business-friendly policies. Georgia, now at #9, has seen continued growth in film production, logistics, and technology.
What’s Happening to the Lower-Ranked States?
While some states have surged, others continue to struggle. West Virginia, Louisiana, and Mississippi remain among the lowest-ranked economies, largely due to declining industries, high unemployment, and population loss. These states have yet to diversify their economies beyond traditional sectors like coal and agriculture, which have seen downturns in recent years.
The economic landscape of the U.S. is constantly evolving, shaped by policy decisions, industry growth, and migration trends. Some states have capitalized on new opportunities, while others are struggling to keep up. What do you think about these shifts? Have you noticed economic changes in your state? Share your thoughts in the comments!
