California economy falls to 5th best in US on this scorecard
WalletHub says the No. 1 state economy is Washington, then Utah, Massachusetts and Colorado.
”Survey says” looks at various rankings and scorecards judging geographic locations while noting these grades are best seen as a mix of artful interpretation and data.
Buzz: California has the nation’s fifth-best economy on one scorecard, but that lofty grade dropped by two spots in a year.
Source: My trusty spreadsheet reviewed WalletHub’s annual look at state-by-state economic achievement. The financial advice website assembled 28 economic and demographic metrics into three equally weighted slices of business performance: economic activity (stats on output and business formation), economic health (a mesh of jobs, income and affordability), and innovation potential (technology-related trends).
Topline
Finishing ahead of California on this 2023 scorecard was No. 1 Washington, then Utah, Massachusetts and Colorado. The worst economy was in West Virginia, then Louisiana, Alaska, Mississippi and Hawaii.
And California’s big rivals? Texas was No. 9 and Florida was 13th.
Details
Look inside the math to see what California does well and where it struggles.
California’s best grade came for tech-centric “innovation potential” at No. 3.
Tops was Massachusetts and Washington, and after California came Maryland and New Hampshire. Lows? West Virginia, then South Dakota, Louisiana, Hawaii and Arkansas. The rivals? Texas was No. 23 and Florida was 32nd.
California also scored high for growth-linked “economic activity” at No. 8.
Tops? Utah, then Washington, DC, Colorado, and Nevada. Lows? Alaska, then Louisiana, Oklahoma, West Virginia, and North Dakota. The rivals? Texas was No. 10 and Florida, No. 15.
California’s blemish – and perhaps a warning signal – was a No. 42 ranking for affordability-tied “economic health”.
No. 1 was Utah, then Idaho, Florida, North Carolina, South Dakota, and Texas. At the bottom was Louisiana, then Mississippi, Illinois, New Mexico, and West Virginia.
Bottom line
Consider year-to-year movements in this scorecard as an equally meaningful benchmark of any state’s real-time economic well-being.
California fell to No. 5 from No. 3 in 2022 – a two-spot decline in the ranking that translates to a 33rd-place performance among the states for the year.
That slip is in line with other subpar results for California’s economy.
The state’s meek 0.4% growth in gross domestic product for 2022 ranked No. 42 for business output. A Philadelphia Fed yardstick that mirrors GDP growth in a more real-time fashion had the state’s economy growing at a 2.7% pace in April, 29th in the nation.
And a local business group says California is a tough place to do business, citing stats through 2019 showing expanded exits of business establishments from the state.
Now looking at WalletHub’s 2023 math, California’s dip was nowhere near the biggest decline, which was seen in New Hampshire – off 18 spots in the year to No. 23 from 5th place. Then came Iowa, off 15 spots to No. 39 from 24th, and Montana, off 7 spots to No. 25 from 18th.
The past year’s biggest improvement was found in Delaware, up 14 spots to No. 14 from 28th. Next was Vermont, up 11 spots to No. 30 from 41st. Then came Arizona, up 7 spots to No. 10 from 17th, and Idaho, up 7 spots to No. 6 from 13th.
Oh, what about Texas? The Lone Star state was 12th for scorecard movement in 2023, up 3 spots to No. 9 from 12th.
And Florida was 20th for improvement, up one spot to No. 13 from 14th.
Politically speaking
The economy leans blue on this scorecard if we define blue states as those who supported President Biden in the 2020 election – and red states for those who did not.
My spreadsheet found blue states with an average No. 20 overall ranking vs. No. 32 in red states. In 2022, it was 21st for blue and 31st for red.
Looking at the three scorecard slices for 2023, blue states excelled in economic activity (No. 22 average vs. No. 30 red) and innovation potential (No. 18 vs. No. 35 red). Red states were tops for economic health (No. 23 vs. No. 29 for blue).
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com