State Economic Watch

Delinquency and foreclosure rates in most states moved higher in December according to the most recent ICE Mortgage Monitor . The national rate of total non-current mortgages ticked up to 4.1% as of December 31, 2025, from 3.8% as of October 31, 2025. The states with the highest non-current rates are still clustered in the south, with Louisiana at 8.6%, Mississippi at 8.4%, Alabama at 6.4% and Arkansas and Indiana at 6.0%, and all five were higher in December than in October. Idaho, Washington, Montana, and Colorado had the lowest non-current rates, all under 2.5%. The states seeing the greatest increase in non-current rates y/y were Maryland (+10.6%), Utah (+9.5%), and Arizona and Arkansas (+8.5%). Conversely, the states posting the largest declines in non-current rates were Florida (-8.8%), Hawaii (-5.7%), and South Carolina (-5.5%).

A new posting from the Federal Reserve Bank of Kansas City analyzes the health of the Oklahoma labor market. Its economists found that the state’s labor market remains healthy, as evidenced by continued low unemployment, but that its hiring dynamics are showing considerable weakness. Oklahoma’s unemployment rate remains below the national average at about 3.6%, but its hiring rate, which has traditionally been above the US average, fell below the US rate in 2H2025. Its hire rate fell from a peak of 5.5% in 2022 to 3.1% in 2H2025. The near term outlook isn’t encouraging with 70% of Oklahoma businesses in a recent KC Fed survey expecting employment to be flat or down in 2026. The firms cited “low growth expectations and economic uncertainty” as the principal reasons for the low pace of hiring.

Stateline takes a look at the recently released Census migration statistics and finds an ironic and overlooked element to the US immigration saga. It appears that the surge in immigration over the last few years may actually help some “red states” gain Congressional seats once the 2030 census is conducted. While current federal immigration policies have depressed the inflows since 2025, states like Texas and Florida are nevertheless still expected to pick up House seats in 2030 thanks, in part, to the 2020-2024 surge.

Governing has looked beneath the surface of California’s economy and has found some sobering statistics. While it ranks as one of the largest economies in the world in terms of GDP, California’s labor market is among the weakest in the US. The state’s rate of job growth ranked 37th in 2025, and its December unemployment rate of 5.5% was the highest in the country. Economists point to the Bay Area as a principal source of weakness, as the region lost 20,000 jobs in 2025.

A recent report from economists at the Federal Reserve Bank of Dallas discusses the continued importance of utility-scale solar to Texas’ economic development, particularly when it comes to data centers. They note that Texas is the top state for utility-scale solar generation and that, despite current challenges from policy changes at the federal level, the state added as much solar generation in 2025 as it did in 2024 and is expected to add significant additional capacity in 2026. The economists conclude that the state's energy demand will continue to increase over the next five years as a result of “demand from data centers, cryptomining, oil field electrification and new industrial customers”, and that solar will remain “ part of the energy mix and an important driver of data center development in Texas”.

 Excellent special section in yesterday's New York Times that highlights the impact of the Trump Administration's policies on the states. Most of the pieces in the section are very quick, short reads, but there are a couple of interesting longer write-ups, such as one that discusses the impact of the Administration's trade policies on Port of Seattle longshoremen, and another that describes the negative effect that the Administration's aggressive approach to Canada is having on the economy of northern Vermont.