- Money. California 2025 stimulus payments: Dozens of Americans will receive these deposits from June
- Money. Victory or defeat for Trump? CBO presents analysis of the possible consequences of his tariffs
A comprehensive study by WalletHub has identified Massachusetts as the state with the strongest economy in the US, while Iowa ranks overall as the lowest, despite scoring moderately in innovation potential (29th out of 51), according to data analyzed across 28 key economic indicators through April 2025.
The economic health of individual states varies dramatically across the United States, with some powerhouse economies contributing disproportionately to national growth. Case in point: California's economic output of $4.17 trillion in 2024 nearly outranked Japan ($4.2 trillion) as the world's fourth-largest economy, while Vermont's GDP sits at just $45.7 billion, nearly 91 times smaller than California's massive economic engine.
These disparities reflect fundamental differences in economic activity, health metrics, and innovation potential that WalletHub researchers analyzed to determine which states are truly driving American prosperity during ongoing economic challenges. According to WalletHub analyst Chip Lupo, "A strong state economy doesn't guarantee success for the state's residents, but it certainly makes financial success more attainable. Factors like a low unemployment rate and high average income help residents purchase property, pay down debt and save for the future."
The Top-Performing State Economies
Massachusetts claimed the top spot in WalletHub's rankings with a total score of 70.84out of 100 possible points. The Bay State particularly excelled in innovation potential, where it ranked first nationally. Massachusetts invests significantly more in both industry and academic R&D compared to most other states, resulting in substantial economic growth dividends and the second-highest rate of invention patents per capita.
The state's workforce is heavily concentrated in forward-looking industries, with Massachusetts boasting the highest share of jobs in high-tech sectors and the third-highest percentage of STEM professionals nationwide. Additionally, Massachusetts leads all states in the percentage of firms listed on the prestigious Technology Fast 500 list, cementing its position as an innovation powerhouse.
Utah secured second place with a score of 69.18, driven by its first-place ranking in economic activity. The Beehive State boasts remarkable income statistics, with a median annual household income exceeding $88,500 after cost-of-living adjustments, the second-highest in the nation. Utah's average income grew by an impressive 6.1% between 2023 and 2024.
The state's labor market remains exceptionally healthy with a low 3.2% unemployment rate and the eighth-highest growth in its civilian workforce from 2023 to 2024. Utah also demonstrates strong future business potential, ranking third nationwide for both startup activity and business growth rates, and sixth for the share of jobs in high-tech industries.
Washington, California, and New Hampshire round out the top five economies, with scores of 68.97, 67.43, and 58.88 respectively. Washington's strength lies in its robust R&D investments and high concentration of technology jobs, while California ranks second in economic activity despite placing 47th in economic health. New Hampshire earned solid scores across all categories evaluated.
The Struggling State Economies
At the opposite end of the spectrum, Iowa anchors the bottom of the list with a score of just 31.61. The Hawkeye State ranked dead last (51st) in economic activity and 48th in economic health, though it performed somewhat better (29th) in innovation potential. Iowa also had the lowest startup activity of any state, reflecting challenges in attracting new business formation.
West Virginia placed 50th overall with a score of 32.34, struggling particularly in innovation potential, where it ranked last nationally. The Mountain State also faces significant economic health challenges, placing 45th in this category.
Hawaii, North Dakota, and South Dakota complete the bottom five economies with scores of 33.09, 33.28, and 34.18 respectively. While South Dakota ranked an impressive 2nd in economic health metrics, it suffered from dismal rankings in economic activity (49th) and innovation potential (47th).
Other noteworthy findings from the study reveal striking disparities between states. Louisiana's exports per capita value is 59 times higher than Hawaii's, while South Dakota's unemployment rate is 3.1 times lower than Nevada's. Massachusetts' share of high-tech industry jobs is four times greater than Arkansas', and New Hampshire's poverty rate is 2.7 times lower than Mississippi's.
The comprehensive analysis utilized data from numerous authoritative sources, including the U.S. Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, National Science Foundation, and the Kauffman Foundation, among oth