Economic output in the U.S. increased by 2.1% in the first quarter, with Western and Southeastern states experiencing the most growth, while the agricultural Midwest saw declines. These insights come from the latest Gross Domestic Product figures released by the Bureau of Economic Analysis. Washington state led the growth with a 4.5% rise, driven by the AI boom in the tech sector, whereas South Dakota faced a 1.6% decrease due to ongoing agricultural challenges.
Following Washington, California recorded a 3.7% increase in state GDP, while North Carolina and South Carolina both saw 3.2% growth. Other states like Nebraska and Iowa experienced minor GDP reductions, with figures dropping by 0.9% and 0.1% respectively.
In contrast, personal income trends varied notably as North Dakota and South Dakota reported substantial increases, fueled by rising oil prices amid the Iran war, with North Dakota seeing a 22.4% rise and South Dakota an 11.8% increase. This disconnect between income growth and economic output in the Dakotas is due to inflation adjustments, where personal income isn’t adjusted for inflation, unlike economic output. The significance of oil production also impacts North Dakota’s tax revenues.
Hawaii was the only state where personal income fell, decreasing by 23.9%. The state has been affected by a downturn in tourism and federal job cuts, as reported in a February state report. Read more on the Bureau of Economic Analysis website.
