Performance metrics are keys in every business. Having grown up on a sheep ranch, one of the very important metrics measured was the average daily gain of sheep. Since all of the livestock were exposed to the same feed conditions, it was important to identify the genetics that provided the best performance (average daily gain). To calculate accurately, however, required weighing each lamb at birth since that weight varied greatly.
The same is true when it comes to tracking the economic performance of every state. To do so requires an estimate of the value of all goods and services produced each quarter and then comparing that number to the prior quarter. Measuring and tracking the Gross Domestic Product (GDP) is one the tasks completed by the U.S. Bureau of Economic Analysis (BEA). The BEA removes all gains (or losses) caused by inflation, hence the use of the term Real GDP – inflation adjusted.
The following table shows the real growth in GDP from Q2 2018 to Q3 2018 for all 50 states plus the District of Columbia. As usual, I invoke the TINSTAANREM axiom — There Is No Such Thing As A National Real Estate Market or a National Economy. The same is true regarding economic activity in each individual state. The good news is that all but one state — West Virginia — posted growth in GDP from Q2 to Q3 2018. The data are presented alphabetically and by growth rate.
Obviously a growing economy produces more jobs. The next chart (from an earlier blog) shows the net job growth in the 12-months ending December 2018 by state. While the comparison between the two is not perfect, it is highly and positively correlated.
To view the entire BEA release click https://www.bea.gov/news/2019/gross-domestic-product-state-third-quarter-2018
When it comes to job creation, the growth in GDP comes up king.