These 10 U.S. states have America’s worst economies

Fears of a U.S. recession have eased considerably compared to a year ago as jobs and the economy have continued to grow, and inflation has slowly subsided. But the nation is not out of the woods, and some states are in greater jeopardy than others.

Companies that are making decisions about where to locate or expand their facilities are acutely aware of this. They know it is good business to locate in a state where the economy is growing and diverse, fiscal policies are solid, and the real estate market is strong. That is why CNBC looks at state economies in ranking America’s Top States for Business. Economy is one of ten categories of competitiveness in the annual study, each one weighted to reflect how frequently states use it as a sales pitch when courting companies. Under this year’s methodology, Economy accounts for 14% of a state’s total score.

We consider economic growth and job growth. We look at state finances, fiscal reserves, pension obligations and credit ratings. We also look at the overall health of the housing market. We measure the breadth of each state’s economy by looking at how many major corporations are headquartered there. We evaluate the entrepreneurial economy based on new business formations. And, new in 2024, we measure foreign direct investment in each state, both in absolute terms and as a percentage of gross domestic product (GDP).

Some states are at the top of their economic game — home to America’s 10 best state economies. But these ten states are in a relative slump.

10. Vermont

The fact that there are no major corporations headquartered in The Green Mountain State may track with Vermont‘s idyllic vibe, but it is not positive for the state’s economy. Couple that with lackluster growth, some troubling pension obligations, and flat to lower tax revenues, and you get an economy facing an uphill climb. Republican Gov. Phil Scott has sought to address the state’s many challenges with a strategic plan to “grow the economy, make Vermont more affordable and protect the most vulnerable.” A key to meeting all those goals is to attract more workers to the state. Jobs did grow a tiny bit last year, but it is a small start.

2024 Economy Score: 144 out of 350 points (Top States Grade: D+)

GDP (2023): $35.1 billion (+1.3%)

Job Growth (2023): 0.9%

Debt Rating & Outlook (Moody’s): Aa1, stable

Foreign Direct Investment (2022): 0

Major Corporations: None

9. (tie) Illinois