PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

State GDP Growth: How Did the Big 6 States Perform in 2023?

By at 2 April, 2024, 9:23 am

by Raymond J. Keating –

The U.S. Bureau of Economic Analysis released its latest report on state gross domestic product (GDP). Data for the fourth quarter of 2023 and for all of 2023 are included.

Let’s look at the six largest states by population – California, Texas, Florida, New York, Pennsylvania and Illinois – and see how they compared to the national growth rate.

First, in the fourth quarter, the U.S. economy grew at a real rate of 3.4 percent (seasonally adjusted and annualized). Half of the Big 6 states grew at a faster pace – Texas, Florida and Pennsylvania. New York performed the worst of the Big 6, with it’s growth rate being less than half the U.S. rate.

Second, for all of 2023, the U.S. economy grew at a real rate of 2.5 percent (seasonally adjusted and annualized).

Only two of the Big 6 states grew at a faster pace. The real GDP growth rate in Texas was more than double the national rate, while Florida’s was double the national pace.

Meanwhile, New York, again, performed worst at a meager 0.7 percent rate of growth. In fact, only two states among all 50 performed worse than New York in 2023 (Delaware at -1.2 percent and Wisconsin at 0.2 percent).

The point should not be ignored by policymakers across the nation that Texas and Florida offer attractive policy climates for entrepreneurs, businesses and individuals – for example, with no income and capital gains taxes on individuals and businesses in Texas, and no income levies on individuals in Florida – while New York ranks as one of the most burdensome states in the nation in practically all areas of taxation and regulation.

Yes, while assorted factors come into play, public policy matters.

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist and The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist

 

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