State Economic Watch

The Florida Consumer Sentiment Index , published by the University of Florida’s Survey Research Center, declined for the second consecutive month in April. The index fell to 74.6 in April from 78.1 in March, but that's still better than the 72 level reported for April 2025. For context, the recent peak for this index was 79.3 in February 2026. The internals of the survey are more interesting than the top line, wth big disparities in age and income reported. For example the sentiment measure for the age 60 and over cohort is 81.9, while for those under 60 it's 68.7. Similarly, those with incomes of $50K and above report a 80.2 sentiment index, while for those with income under $50K, it’s 58.5. Further, the April 2026 sentiment indexes for the 60+ and $50K+ groups were higher than a year ago, but for the under 60 and under $50K groups, they were lower. The “personal financial situation now compared to a year ago” question produced the same response pattern. It’s important to note...

The Federal Reserve Bank of Philadelphia’s State Coincident Indexes remained in a lackluster range in February. According to today’s release by the Philadelphia Fed, the three-month diffusion index increased slightly to 54 from a revised 50 in January. The three-month index has been stuck in a tepid range since November. The more volatile one-month diffusion index rose to 36 in February from a revised 22 in January. In February, Connecticut joined the group of states posting the most significant three-month declines, along with Montana and West Virginia, while California, Arizona, and Indiana posted the largest increases. The exhibit below is reproduced from the press release.

This lengthy article posted by Governing is well worth spending some time on. It’s a deep dive into the conversion of farmland in California’s Central Valley to renewable energy generation. Farmers in the Central Valley are being forced to take portions of their farmland out of production because of water use restrictions. In response, the proposed Valley Clean Infrastructure Plan will convert some of this fallowed land to utility-scale solar production. The article provides a good historical background and goes into some detail about transmission and other challenges facing the project. 

  The pace of service sector activity growth in the Tenth Federal Reserve District slowed notably in April according to the latest Federal Reserve Bank of Kansas City’s Services Survey . The top line services composite index (SA) fell to 3 in April from 15 in March and 6 in February, and the general revenue/sales index fell to 6 from 18. All three of the employment indexes, employee count, hours worked, and part-time employment fell into negative territory, while the wages index increased from 16 to 22. Nevertheless, the six-month expectations composite index rose for the second consecutive month, to 22 in April from 17 in March, while revenue/sales expectations increased soundly from 20 to 34. The employee and hours worked indexes both fell slightly m/mn, but the part-time employment expectations index increased to 10 from 4. Finally, capex expectations sank to a just barely positive 1 from 19 in the prior month.

Most of the components of the Federal Reserve Bank of Kansas City’s Manufacturing Survey dipped slightly in April but remained in positive territory. The survey’s top line composite index was reported at 10 for April compared to 11 in March and 5 in February, but this was still higher than the -2 reported for April 2025. Almost all of the component indexes (SA) of the survey were lower m/m except for prices paid and inventory. The only index to post negative was new orders for export, which came in at -3. Employee count fell to 2 in April from 7 in March. The six-month expectations indexes were mostly higher in April, but capex and average workweek fell slightly. Nevertheless, all of the expectation indexes were in positive territory in April.

The February 2026 State Employment Report from the US Bureau of Labor Statistics was not much different than the January 2026 report, with the state statistics continuing to reflect a stagnant national labor market. Payrolls were flat in the vast majority of states both on a m/m and y/y basis and unemployment rates were little changed m/m. However, 13 states saw their u-rates rise y/y, with Maryland, Delaware, Florida and Minnesota reporting increases of about 1%. Indiana and Ohio saw their u-rates decline slightly y/y. Arizona was the only state to see meaningful m/m payroll gains in February, while Illinois and Nevada saw losses. Over the year, payrolls were up in California, and Nevada, and down in DC, Maryland, and Iowa. The gains in California were almost entirely driven by significant increases in health and education employment, although the professional and business services category also saw some gains. The situation was similar in Nevada, but increases in leisure and hospita...

Ferrara Candy Company has announced plans to build a 750,000 square foot production facility and associated administrative offices in Orangeburg County, South Carolina. In addition, the Chicago-based company has pledged to hire 1,000 of the state’s residents over the next ten years. For its part, the state has agreed to spend $85 million on site prep, and to provide some tax breaks for the company. The facility is expected to start pumping out Jelly Belly, Nerds, SweeTARTS, and Laffy Taffy in the first quarter of 2029.  

Here’s a link to an interesting Op-Ed by the always equally interesting Alan Ehrenhalt about the revival of Midwestern cities. Ehrenhalt uses recent population statistics to illustrate that cities like Des Moines and Grand Rapids are now growing at a faster rate than that of both other US cities, and of the country as a whole. While Ehrenhalt offers a few possible explanations for this trend, housing affordability appears to be a significant factor. 

The Federal Reserve Bank of Philadelphia’s State Coincident Indexes declined notably in January. The three-month diffusion index fell to 48 from a revised 68 in December. This is the lowest reading for the three-month index since the Covid era. The more volatile one-month diffusion index also fell in January to 42 from a revised 84 in December, but it’s still higher than the revised 24 level posted in November. Similar to December, the states with the most significant three-month declines were West Virginia, Delaware, and Montana, while California and Kentucky posted the largest increases. The exhibit below is reproduced from the press release.

The National Taxpayers Union Foundation has come up with a unique and attention-getting way to look at domestic migration data. Its report, Migration in Minutes , calculates state domestic migration rates in terms of relocations per minute. It’s admittedly a lot more fun to read than the gimmicky annual moving company studies or the dry-as-dust Census migration tables, despite the fact that it uses somewhat stale 2022 IRS data. Similar to the Rich States, Poor States report this blog commented on a few days ago, the analysis in the report reflects the Foundation’s views on state tax policy. Not surprisingly the report finds Florida and Texas as the top net domestic migration states and estimates that each state welcomed a new resident about every 4.5 minutes in 2022. California and New York brought up the rear, with California losing a resident about every 2 minutes and New York about every 3 minutes, according to the calculations. The report also breaks down domestic migration by age...

In a new report , the group Common Sense Institute Iowa has estimated that the state’s weakening rate of natural population growth and historic domestic outmigration, together with a recent decline in foreign immigration, will result in a reduction in Iowa’s GDP of almost $330 million this year. Using US Census Bureau data, the report analyzes Iowa’s declining trend of net births and its long term trend of domestic outmigration and concludes that the state’s economy is highly dependent on foreign immigration. However, current federal immigration policy has caused a significant decline in foreign immigration to Iowa over the last year, resulting in an estimated $231 million loss of economic activity in 2025. The study projects the potential impact to the state’s GDP to increase to -$329 million in 2026, -$321 in 2027 and -$299 million in 2028.

New Jersey’s acting commissioner of the Department of Labor and Workforce Development told a state legislative committee this week that the state’s economy was “strong and stable”. The state’s residents however, have a different view. The latest Rutgers-Eagleton Poll indicates that “three-quarters of residents rate the state’s economy negatively, with 29% rating it as “poor” and 46% as “only fair”. According to Rutgers, this negativity rating is six points higher than it was when the last poll was taken in October.

It’s hard to believe that this is still a thing, but the Arthur Laffer-affiliated think tank, American Legislative Exchange Council, is out with another edition of its Rich States, Poor States publication. The report ranks the states in terms of economic competitiveness using an index of 15 variables, most of which are related to tax policy. For the 19th year in a row, Utah came out on top, with Tennessee, Idaho, North Carolina, and Arizona rounding out the top five. Connecticut, California, Vermont, New Jersey, and New York make up the bottom five. Presumably, a high ranking gives the “top tier” states some bragging rights and marketing material to leverage, but once one realizes that this is essentially a Reaganomics/supply side exercise, it starts to look more like a tax policy race to the bottom than an informative analytical study.

  The April Business Leaders Survey from the Federal Reserve Bank of New York reflects continued weakness in the New York-Northern New Jersey service sector. While some indices improved slightly m/m, most remained in contraction territory. Additionally, optimism about future business conditions continued to weaken. The headline current business activity index firmed slightly m/m but remained in negative at -14.0, while the business climate index fell 3.1 points to a resoundingly negative -49.3. Employee count improved slightly from -8.5 to -2.4, and capex moved to a barely positive +2.9 from-2.5. However, prices paid moved higher to +73.8 while supply availability sank to -20.0. The six-month forward expectations indices all declined, with the headline business activity index declining to +2.9 from +12.7.

  The April Beige Book , released this afternoon by the Federal Reserve, reported stable to modest growth across the Fed Districts. Boston and New York reported some softness, and St. Louis and San Francisco noted flat economic activity, but all of the other Districts cited modest growth. A consistent theme across all of the Districts was the uncertainty brought about by the conflict in the Middle East, with both businesses and consumers taking a “wait-and-see” approach to spending. Almost all Districts continued to reference K-shaped consumer spending, but most noted that almost all consumers are being generally cautious. Labor markets in almost all of the Districts were flat with recent hiring concentrated in temporary or part-time workers rather than permanent full-time staff. Ports and other transportation entities expressed concern over rising fuel prices, while agricultural respondents were worried about the cost and availability of fertilizer due to the Middle East conflict....

  The April Empire State Manufacturing Survey from the Federal Reserve Bank of New York reflected a moderate improvement in manufacturing activity in New York State, with the headline general business conditions index moving into positive territory at 11.0 compared to the -0.2 reported for March. Similarly, the shipments index increased soundly from -6.9 to 20.2, and new orders increased 12.9 points to 19.3. Additionally, the two employment indexes, number of employees and average work week, increased modestly. Finally, the prices paid index increased from 36.6 to 51.0. However, the six-month forward looking indexes were generally weaker m/m, with the general business conditions expectations index falling from 31.0 to 19.6. Likewise, the new orders, shipments, employment and capex expectations indexes all moved modestly lower.

The saga of the unfinished VC Summer nuclear units in South Carolina remains endlessly fascinating. While a sister project in Georgia was completed and has been producing power for about two years, the state-owned utility Stanee Cooper and what was then South Carolina Electric and Gas, pulled the plug on the South Carolina project after significant delays and cost overruns. Now, with the nuclear power renaissance in the US beginning to materialize, it’s starting to look like the South Carolina units may actually be completed at some point, thanks to an MOU agreed to in December between Santee Cooper and Brookfield Asset Management. Really, an incredible turn of events.

 Bloomberg is out this morning with a grim article about the pressures on the Florida healthcare system resulting from changes to federal policy. The article cites declines in ACA coverage due to rising premiums and the refusal by the state to expand Medicaid as reasons for increasing levels of uncompensated care in the state's healthcare system.

  A new study by the Colorado Chamber Foundation catalogs corporate departures from the state since 2019. In its report, 2025 RELOCATION TRACKER:Colorado's Lost Corporate Opportunities & Competitiveness Assessment , the Foundation uses publicly available information to identify the companies that have left the state and some of the reasons why. It estimates that the state lost 13,607 jobs to corporate relocation from 2019 through 2025 and cites Texas as the top destination for these companies, followed by California, Arizona, and North Carolina. 

Concerns are being expressed by political leaders and others in Utah and Idaho about the lack of skilled workers to meet the demands of a revived US nuclear power industry. The US Department of Energy has reportedly estimated that a proposed 400 gigawatt increase in nuclear power capacity by 2050 would require a tripling of the existing nuclear industry workforce. Both states are looking at ways to tailor workforce training to accommodate this expansion.

  A new report from the University of Massachusetts, Amherst Donahue Institute’’s Economic and Public Policy Research Group takes a deep dive into the economic profile of the state’s research and development industry. The report, The Research and Development Ecosystem: Engine of the Massachusetts Economy , identifies a direct and indirect contribution of $218 billion to the state’s economy from R&D activities, equivalent to 28% of Massachusetts GDP. It warns that federal research cutbacks and restrictive visa policies threaten to impact the state’s economy for a decade. 

  The latest Tri-State Tracking reports from the Federal Reserve Bank of Philadelphia starkly illustrate a now familiar employment theme. The Philly Fed notes that through January 2025, y/y employment growth in Delaware, New Jersey, and Pennsylvania has been driven almost entirely by the health and education services sector. In all three states, the payroll gains from this category dwarf all other sectors by a wide margin. While both Delaware and Pennsylvania saw some modest gains from a handful of other payroll sectors, New Jersey experienced y/y employment  declines in every category except health-education and business services.   

  Non-current mortgages ticked up nationally in February from 4.1% to 4.2% with both early-stage delinquencies and mortgages 90+ days delinquent inching higher, according to the most recent ICE Mortgage Monitor . Delinquency and foreclosure rates were little changed in most states in February, with the highest delinquency rates still being posted primarily by the southern states. The five states with the highest non-current rates remain Louisiana (8.6%), Mississippi (8.5%), Alabama (6.4%), Arkansas (6.1%), and Indiana (6.0%). Idaho, Washington, Montana, Hawaii, and Colorado had the lowest non-current rates, all 2.4% or less. The states seeing the greatest y/y increase in non-current rates were Utah (+19%), Arizona (+15%), Maryland (+14.4%), and Nevada (+12.2%). We note that Utah, Arizona, and Nevada all saw modest increases in early-stage delinquencies in February. Hawaii was the only state to post a y/y decline in its non-current rate.

  In its new combined format, the US Bureau of Economic Analysis reported 4Q2025 GDP and personal income statistics for the US together with those of the states earlier today. This blog reported on the state GDP statistics in a previous post. According to the BEA, personal income increased at a 3.4% annualized rate in the quarter in the US, increasing in 47 states and declining in three. Hawaii posted an outsized growth rate of 41.5%, but the BEA reports that this was principally due to payment of a claims settlement related to the 2023 Maui wildfire. Apart from Hawaii, North Carolina and Louisiana both posted personal income growth of over 5%, but in each case, the growth was broad based and wasn’t driven by any individual personal income component. Iowa, South Dakota and North Dakota saw personal income declines of 1.5%, 2.0% and 4.0%, respectively, with all three negatively impacted by declines in farm income. The below exhibit is from this morning’s BEA press release.

This morning, the US Bureau of Economic Analysis reported that real GDP increased in 35 states in 4Q2025, but declined in 13 states and the District of Columbia. The biggest gains were seen in the Dakotas, with North Dakota posting an annualized growth rate of 3.8% and South Dakota 3.0%. Minnesota had the third highest growth rate at 2.2%. Economic growth in the Dakotas was principally driven by strong gains in the Agriculture, Forestry, Fishing and Hunting category. In North Dakota’s case, the 4Q growth in that sector of +3.42% represented a substantial snapback from the -2.76 reported in 3Q. DC, Maryland and Virginia led the way on the downside with real GDP declines of 8.3%, 3.3% and 1.8%, respectively, and in each case, a sharp decline in the Federal Civilian category was the principal reason. The below exhibit is from this morning’s BEA press release.  

The January 2026 State Employment Report from the US Bureau of Labor Statistics contained little in the way of meaningful content. According to the statistics released today, state labor markets remained stagnant in January. Payrolls were flat in the vast majority of states both on a m/m and y/y basis. Unemployment rates were largely unchanged m/m, but there was some notable movement y/y, with 14 states posting increases. The largest y/y u-rate increase was posted by Delaware, which saw its rate rise 1.3% to 5.4%. Indiana and Ohio saw their u-rates decline slightly. Monthly payroll gains were posted by California, Texas, Illinois, Indiana and Iowa, while DC saw a decline. Over the year, payrolls were up in California, Texas, South Carolina and Nevada, and down in DC and Maryland. Increases in health and education employment boosted most state numbers, but Texas, South Carolina and Nevada also saw gains from construction. DC and Maryland continued to suffer from the federal employment ...

The most recent edition of the Alaska Department of Labor and Workforce Development’s  Alaska Economic Trends publication analyzes the changes in the state’s population profile since 2000, and notes the significant increase in the percentage of the population age 65 and older. The number of 65+ residents in Alaska has increased to approximately 120,000, or 15% of the population currently, from under 40,000 and about 5% of the population in 2000. Alaska’s natural rate of population growth has decreased during this period as the number of deaths has grown while births have declined. This article from the Anchorage Daily News , via the Governing website, describes the situation in more detail. 

The Federal Reserve Bank of Dallas has increased its estimate for Texas employment growth in 2026. It now projects growth of 1.9% through December 2026, with an 80% confidence band of 1.1% to 2.7%. The growth estimate equates to 278,400 new jobs. In its prior forecast of February 6, 2026, the Dallas Fed projected 2026 job growth of 1.1% or 154,600 new jobs. The Dallas Fed’s upgraded growth projection is due, in part, to an increase in its Texas Leading Index in the three-month period ending January.

According to a report in the Oregon Capital Chronicle , international arrivals to Portland International Airport fell 21% from 2024 to 2025. However, travelers from  Canada, historically the state’s largest source of international tourism, fell 32% over the same period. Presumably, there was a similar decline in the number of tourists who drove from Canada to Oregon, but that statistic isn’t addressed in the article.

  Governor Patrick Morrisey signed legislation this week to cut West Virginia's personal income tax rate 5%. It was the third such PIT reduction since 2023. The state’s top rate will fall to 4.58% from 4.82%. The tax package will cost approximately $230 million. Prior to the initial 21% rate cut in 2023, the top PIT rate was 6.5%.