State Economic Watch

According to figures released earlier today by the US Bureau of Economic Analysis , personal income in North Dakota fell at a SAAR of -4.2% in 2Q2026. In fact, North Dakota was the only state to see a decline in personal income in the quarter. The next lowest was South Dakota at a SAAR of +1.3%. At the other end of the spectrum was Wisconsin, with a +6.4% increase in personal income in the quarter. The USBEA’s data indicates that North Dakota suffered from a significant drop in farm income in the quarter, which drove its overall personal income growth figure lower. The dividends, interest and rent and transfer payments components for North Dakota both posted increases in 2Q2026, but the net earnings component dropped 9.3% in the quarter. Of this amount, farm earnings fell 75%. In South Dakota, by comparison, farm earnings only fell 31%. A perfect storm of drought, trade wars and high energy and input prices seems to have resulted in a tidal wave of earnings pressure for North Dakota fa...

According to today’s release of 2Q2026 state GDP from the US Bureau of Economic Analysis, there was a wide disparity in growth rates across the 50 states. Five states posted negative real GDP growth in the quarter, led by West Virginia (-2.3%) and Wyoming (-1.6%). Three other states, North Dakota, Kansas and Nebraska saw modestly negative GDP growth in the quarter. The bulk of West Virginia’s decline was the result of a significant drop in mining/oil & gas extraction. This sector also dragged down Wyoming and North Dakota’s GDP growth, but both states were also negatively impacted by a drop in transportation and warehousing activity. The agriculture sector pushed Kansas and Nebraska’s growth into negative territory. On the other end of the spectrum, New York led the pack at +4.0%, followed by South Carolina and Delaware (+3.5%), Utah and Minnesota (3.4%) and Georgia (+3.1%). New York, Delaware, and Utah benefited from strong gains in the FIRE sectors, while South Carolina and Minn...

The University of South Carolina and Westinghouse Electric Company announced that they will be partnering on nuclear industry education. According to the press release from the University, the two parties will “create a multidisciplinary nuclear workforce development program to support U.S. fleet deployment of AP1000® plants. The new program will be centered at the USC Molinaroli College of Engineering and Computing’s planned Nuclear Innovation Center”. The interesting twist here is that two Westinghouse AP1000 had been under construction in South Carolina but were cancelled in 2017 after delays and cost overruns. Westinghouse’s current parent company, Brookfield Asset Management, has been in negotiations with the South Carolina Public Service Authority to purchase and restart construction of those two units. Brookfield has until March 2028 to decide whether or not to move forward with the proposed purchase. It should be noted that two AP1000 units in Georgia were fully completed in A...

Continuing the pattern that we have seen in recent months, the Dallas Fed’s September Texas Service Sector Outlook Survey didn’t live up to the example set by its manufacturing counterpart. The top line revenue index tipped into negative territory in September, falling 7.5 points to -0.9. The business conditions indexes did the same, falling from slightly positive in August to slightly negative in September. The general business activity index fell 6 6 points to -1.8, while the company specific outlook fell 6.2 points to -3.2. The only bright spot was the employment index, which increased from +0.8 in August to +4.1 in September. Similarly the part-time employment index inched higher, but the hours worked index moved lower m/m. The six-month forward expectations indexes were generally flat to slightly higher m/m.  

Housing prices moved modestly higher in July according to the latest release of the S&P Cotality Case-Shiller Indices. The National Composite Index (NSA) increased 1.9% y/y in July, compared to the 1.6% annual gain reported in June. However, the press release notes that “home prices continued to decline in real terms in July 2026, marking the 14th consecutive month of real declines”. The largest eastern US metros continue to post the highest y/y growth rates in the 20-City Composite Index, led by Chicago (+6.86%), New York (+5.78%), Cleveland (+4.22%), Miami (+3.53%), and San Francisco (+3.48%).  The West and Sunbelt metros generally continue to post the largest y/y losses. Seattle saw the largest decline at -1.57%, followed by Las Vegas (-1.29%), Denver (-1.09%), Tampa (-0.73%), and Portland (-0.65%).

Texas Governor Greg Abbott issued a 30-day disaster declaration on Monday over the price of diesel fuel. According to the press release from the Governor’s office, the declaration allows for the expanded use of dyed diesel on the state’s roads. As the press release explains, dyed diesel is an “off-road fuel marked red, typically used in agricultural operations, and sold without a motor-fuels tax”. The declaration also “suspends state oversize and overweight permitting requirements for vehicles loaded with fuel, agricultural, or timber products”. At the same time, Abbott has requested a waiver from the USEPA from “ultra-low sulfur diesel requirements”. This waiver would reportedly increase diesel fuel availability in the state. 

The Texas manufacturing sector saw a strong increase in activity again in September according to the results of the Federal Reserve Bank of Dallas Texas Manufacturing Outlook Survey . The top line production index increased 13.4 points m/m to 29.5. This was the third consecutive monthly increase in this index and its highest reading since July 2021. Similarly, other indexes such as new orders, capacity utilization, and shipments all hit multi-year highs. Even the employment index moved 7.1 points higher m/m to 15.1. Despite these strong results, optimism among Texas manufacturers appears to have weakened somewhat, with the six-month forward expectations indexes all coming in flat to slightly lower m/m in September.  

Pirelli North America will invest $1.2 billion to expand its Rome, Georgia production facility according to a press release from the Georgia Governor’s office. The new facilities are expected to be fully operational by 2033 and are expected to generate 1,000 new jobs. The existing Pirelli Rome facility currently employs 234 people.

On Friday, September 25, Kentucky Governor Andy Beshear signed an executive order creating the Governor’s Office of Music to support the state’s music industry. The office will be charged with “highlighting Kentucky’s storied music legacy and to supporting Kentucky artists, venues, festivals and music businesses”. According to the press release , the arts industry in Kentucky generates $6.9 billion in economic activity and accounts for 51,000 jobs. 

A new report from the Maine Office of New Americans concludes that the state could see an economic impact from aggressive federal immigration policies of between $395 million and $3.3 billion and a loss of between 1,800 and 15,100 jobs. The report, authored by the Wallace Economic Advisors, LLC, utilizes low-mid-high enforcement scenarios to model the economic impact to the state of the federal government’s immigration activity.  According to the results, the greatest hit to employment would be experienced in the health services sector, but the biggest economic impact would come from the manufacturing sector.

The services sector in the Tenth Federal Reserve District continues to be weak according to results of the Federal Reserve Bank of Kansas City’s September Services Survey . The top line composite index improved slightly from the -3 reported in August to a neutral 0 in September, but still far below the 14 registered in July 2026. Similarly, the general revenue/sales index improved to 6 from 0 in the prior month, again still meaningfully below July’s reading of 19. The employment indexes, employee count, part-time employment and hours worked, were all lower m/m and in negative territory in the September survey.  After plunging in August, the six-month expectations indexes recovered somewhat in September, with the composite index increasing to 12 from 5 in August, and the general revenue/sales index increasing to 17 from 12. However, both of these indexes are well below their respective June peaks of 26 and 41. Finally, the employment six-month expectations indexes improved slightly,...

  All of the current indexes in the Federal Reserve Bank of Kansas City’s Manufacturing Survey were higher m/m in September. The survey’s top line composite index was reported at 14 for September compared to 10 in August. It was the second consecutive monthly increase in this index. The production, shipments, new orders and backlog indexes all increased m/m. The employment indexes were mixed, with employee count remaining at a neutral 0 and the average workweek increasing from 1 to 13. The six-month forward indexes however, were flat to slightly lower, with the composite expectations index dipping to 19 from 20 in August and most of the other forward indexes down slightly. Price pressure was a consistent theme in the comment section with one respondent predicting that “prices to customers are going to go up and go up significantly if something doesn't change quickly. We are looking at a huge new round of inflation. Perhaps even scarcity of supply”.  

Employment growth in Massachusetts has lagged that of the US since COVID 2020 pandemic. A new study by economists at the Federal Reserve Bank of Boston calculates that, when indexed to January 2020, total employment in Massachusetts in July 2026 was slightly below the January 2020 level (0.994), but the comparable figure for the US was slightly higher (1.045). They conclude that anemic post-pandemic growth in three sectors, professional and business services, healthcare and social assistance, and construction were primarily to blame. However, they note that Massachusetts enjoyed above average growth from these three sectors from January 2009 to January 2020, and that this pace of growth proved to be unsustainable post-COVID.

A new study by the Arizona State University W.P. Carey School of Business Seidman Research Institute estimates that Major League Baseball’s Cactus League spring training activities contributed $495.8 million to Arizona’s GDP in 2026 and produced $806.9 million in overall economic activity for the state this year. Unfortunately, the Institute doesn’t seem to have released the study to the general public yet. Its website has a similar 2018 study available, but not the 2026 study. All we have at the moment are media reports based on what appears to be a selective distribution of a press release. 

The Federal Reserve Bank of Philadelphia’s State Coincident Indexes registered another solid gain in August as the three-month diffusion index increased to 92 from 86 in July. This brings the three-month diffusion index back to a level last seen in April 2026. The indexes increased in 48 states with only Hawaii and Alabama posting index declines over the three-month period. However, the indexes of both of these states actually improved slightly m/m. Seventeen states posted over 1.0% increases over the last three months, led by Nevada and Rhode Island. The exhibit below is reproduced from the press release.

The latest Federal Reserve Bank of Philadelphia’s Nonmanufacturing Business Outlook Survey indicates stable economic activity in the Philadelphia area services sector in September.  The top line firm specific general business activity index rose from -8.2 in August to a just positive +0.3 in September. However, the regional general business activity index dropped to -22 from -10.6 in the prior month. Still, the employment indexes all showed positive movement m/m, with the full time index increasing to +19 from +2.1, and the average workweek moving into positive territory at +8.5 from -13.4 in August. The capex indexes also moved higher in the month. The six-month general forward business activity indexes increased m/m, but the expectations for firm specific activity were stronger at +20.3 than the regional expectations at +2.0.

According to a press release from the office of West Virginia Governor Pat Morrisey, the state’s tourism hit record levels in 2025. Visitor count reached 78.4 million last year, up 1.8% y/y. State officials estimate that tourism’s contribution to the West Virginia economy hit a record $9.4 billion last year. The state’s total nominal GDP was estimated at $109.3 billion in 2025.

A new survey from the Connecticut Business & Industry Association’s Foundation for Economic Growth & Opportunity, points to a degree of pessimism among the state’s businesses. According to the survey results, only 9% of respondents believe the state’s business climate is improving while 38% feel it is declining. Only 1% expect strong growth in Connecticut’s economy over the next twelve months and just 26% expect moderate growth. The high cost of doing business in the state seems to be the principal driver of the downbeat responses. Nevertheless, only 8% of respondents said that they were actively considering moving out of state. 

Another month, another low information State Employment Report . Today’s release from the US Bureau of Labor Statistics shows little change in state employment markets in August. Only four states posted m/m increases in nonfarm payrolls in the month, the largest on a percentage basis being a 0.6% gain in New Mexico. No single sector dominated in New Mexico, but most of the gain was concentrated in construction, health & ed, and government. The remaining 46 states saw no material change in employment. The y/y numbers told a similar story, with eight states posting payroll increases and 42 staying flat. The largest y/y percentage gainers were Louisiana, New Mexico, and South Carolina, all at 1.6%. Louisiana saw gains from construction, while New Mexico benefited from increases in health & ed and government. South Carolina saw gains across almost all of the employment sectors, especially health & ed and leisure & hospitality. The District of Columbia continues to suffer fr...

Manufacturing activity in the Philadelphia area expanded in September but at a slower pace than in August according to the Federal Reserve Bank of Philadelphia’s Manufacturing Business Outlook Survey . The top line general business activity index fell to 37.8 in September from 47.4 in August. New orders and shipments were essentially unchanged m/m, but the employment indexes declined, with the employee count index falling to 11.8 from 27.9 in the previous month, and the average workweek index dropping to 18 from 26.5. The forward-looking six-month expectations indexes were mixed but strong, with the general business activity index falling to 52.9 from 73.6, while employment expectations indexes moved higher. The capex six-month expectations index fell modestly in September to 37.1 from 48.2. Finally, 68% of respondents estimated that their total production increased in 3Q2026 compared to 2Q2026.

Here’s an article from West Virginia Watch via News From The States that requires a couple of readings in order to follow the logic. According to the article, the director of the West Virginia Office of Energy told state lawmakers on Tuesday, that the development of data centers will actually improve the state’s water quality issues, telling Delegates that “the whole issue on water has been mischaracterized”. The idea here seems to be that data centers will generate revenue that can be used to pay for water infrastructure projects. Not surprisingly, this appears to have been met with a certain level of skepticism.

Conditions in the New York-Northern New Jersey service sector appear to have weakened in September according to the results of the Federal Reserve Bank of New York’s Business Leaders Survey . After being briefly above zero during the summer, the top line business activity index returned to negative territory, dropping to -8.7 in September from +0.5 in August. Similarly, the business climate index declined 10.2 points m/m to a pessimistic -35.9. It should be noted that the business climate index hasn’t been in positive territory since 2021. Employee count also shifted from positive to negative, falling 7.3 points to -4.9 in September, while wages held steady. The six-month forward expectations indices all moved lower m/m, with the forward-looking business activity index falling 4.3 points to +5.0, and the business climate expectations index moving 2.5 points lower to -19.0. The forward-looking employment and capex indexes also declined m/m but remained in positive territory. However, t...

Senators Tim Kaine and Mark Warner have introduced a bill to reduce traffic at Washington National Airport (DCA) in order to improve safety. The bill would cap arrivals to no more than 28 in a 60 minute period, establish limits to reduce flight clustering, and eliminate 30 flight slots over five years. The proposed legislation is in response to the mid-air collision near DCA last year that killed 67 people. You can find a link to the press release from Senator Kaine’s office here . 

The employment situation in New Mexico isn’t expected to improve anytime soon, according to the new Consensus Estimate from the state’s Consensus Revenue Estimating Group. The forecast calls for annual growth in state nonfarm payrolls of less than 1% through the forecast period (FY31), with employment growth of 0.1% estimated for FY26 compared to 1.2% in the previous forecast (December 2025). The new August forecast attributes this reduction, in part, to cuts in the federal workforce instituted over the past year. However, the out years don’t look much better, with payroll growth of 0.6% projected for FY27 and 0.2% for FY28. Real state GDP growth of 1.9% is forecast for FY26, 1,5% for FY27, and 1.3% for FY28.

Manufacturing activity in New York State eased modestly in September according to today’s Empire State Manufacturing Survey from the Federal Reserve Bank of New York. The headline general business conditions index fell 13 points m/n to a still positive reading of +7.6. Similarly, both the New orders and shipments indexes fell, but new orders remained positive at +2.0 while shipments moved into negative territory at -3.2.  The employment indexes were firm however, with employee count improving to +10.6 from +9.3 in July, and hours worked increasing 10.1 points m/m to 17.0.  Finally, the six-month forward looking indexes were mostly modestly lower in the September survey, with the general business conditions expectations index falling 3.1 points m/m to a still positive +29. The new orders and shipments expectations indexes were also down modestly but remained firmly in positive territory, while the capex expectations index was a touch lower but essentially unchanged at 14.9. Th...

A report from the Los Angeles County Economic Development Corporation, leaked by Politico on Saturday, concludes that the economic cost of the threatened relocation of Paramount from California could be quite costly to the state. The report estimates that a full withdrawal of Paramount operations would result in a loss of up to 58,000 jobs and a reduction in total economic output of over $21 billion annually. The relocation threat is the product of the dispute between Paramount-Skydance and a coalition of state attorneys general who are seeking to block its proposed merger with Warner Brothers Discovery.

Non-current mortgages moved lower in July, according to the most recent ICE Mortgage Monitor . The service reported that total non-current mortgages nationally dropped to 3.9% in the month compared to 4.1% in June, with the delinquency falling to 3.4% from 3.6% in the prior month, and foreclosures holding steady at 0.5%. However, both of these figures were higher y/y. Delinquency and foreclosure rates were the highest in the South and Midwest, with Louisiana (8.2%), Mississippi (8.1%), Alabama (6.0%), Indiana (6.0%), and Arkansas (5.6%) comprising the top five. The states with the best performing mortgages in July were concentrated in the West, with Idaho, Montana, Washington, California, and Oregon reporting the lowest non-current rates, all 2.4% or less. The states seeing the greatest y/y increase in non-current rates were Hawaii (28.7%), Colorado (+17.2%), Michigan (+16.4%), Kentucky (+15.8%), and Indiana (+14.1%). New York, South Dakota, Wyoming, and Idaho say y/y declines in thei...

The Hawaii Department of Business, Economic Development and Tourism moved its estimate of the state’s GDP growth lower in its latest quarterly economic report . The Department now estimates  real GDP growth of 1.3% for the state in 2026 compared to the previous quarterly estimate of 1.6%. Additionally, it forecasts growth of 1.6% in 2027 and 1.8% in 2028 and 2029. Actual real GDP growth in 2025 was 2.5%. Non-ag employment growth is projected to be 0.3% for 2026 and 0.5% in 2027, 2028, and 2029. Finally, the Department anticipates an increase in visitor arrivals of 0.9% in 2026 with shorter stays and 4.5% fewer visitor days, but an increase in visitor spend of 2.3%. 

The new Connecticut Consumer Outlook Survey from the CBIA Foundation Economic Growth & Opportunity indicates that most of the state’s residents are under increasing financial pressure. According to the survey results, 50% of Connecticut residents view themselves as worse off financially than a year ago, and only 9% think they are in better shape. Further, 40% expect their financial condition to deteriorate over the next twelve months. As far as the overall Connecticut economy is concerned, 42% think it will be bad or mostly bad over the course of the next year, while 57% expect a recession in the next twelve months. One of the principal drivers of these downbeat figures appears to be the cost of living, as 87% of respondents indicated that the cost of living in the state has risen slightly or significantly over the last year.

In its latest quarterly forecast , the University of Virginia's Weldon Cooper Center for Public Service has upgraded its projection of Virginia’s GDP growth to 0.5% in 2026 compared to the 0.2% decline it had forecast in May. Consistent with prior forecasts, the UVA economists see the state’s economic growth improving after 2026, with the new forecast calling for state GDP growth of 1.4% in 2027 and 1,6% in 2028. However, they note that the state’s economic growth is not accompanied by a corresponding growth in employment, as they forecast a 18,500 decline in payrolls for the state in 2026. While the state’s unemployment rate has continued to stay low, the UVA economists note that this has been due, in part, to sizable declines in the state’s labor force since early 2025. 

A new poll from the Albuquerque Journal found that only 16% of those polled ranked the New Mexico economy as good, while only 1% thought it was excellent. On the other side of the ledger, 43% of respondents said the economy was fair and 38% labeled it as poor. In fairness, these results are reportedly not too dissimilar to those of the previous poll taken in 2024.

A new article in the Minnesota Reformer discusses the potential risk AI poses to Minnesota’s “headquarters economy”. The article suggests that the state’s economic culture is more supportive of Fortune 500 headquarters than of tech start-ups, making it more vulnerable to advances in AI. It cites a February 2026 report from NorthStar Policy Action and the University of St. Thomas, which concluded that “one-third of working Minnesotans, or over 800,000 workers, are in jobs with high levels of exposure to GenAI”. However, this doesn’t necessarily mean that AI will displace all of these workers. Instead, the report notes that “exposure could lead to supplementing existing jobs, rather than replacement”. 

In today’s release of the Federal Reserve’s August 2026 Beige Book , ten of the twelve federal reserve districts reported moderate growth since early July, but the Kansas City and San Francisco district banks reported no change in economic activity. Both reported softening consumer spending, as high energy prices pressure wallets and force consumers not only to shift to value-oriented retail establishments, but also to increase their use of credit cards for purchases. Financial institutions noted that some stress in loan portfolios is beginning to materialize.

  In the July 2026 State Employment and Unemployment report, the US Bureau of Labor Statistics (BLS) cited New Jersey as the only state to see a “statistically significant” m/m reduction in nonfarm payrolls in July. The state posted a loss of 25,600 jobs (0.6%) in the month. According to the seasonally adjusted numbers tabulated by the BLS, these losses were concentrated in the Professional and Business Services (-13,400) and Leisure and Hospitality (-7,300) categories. This citation by the BLS has generated the typical press coverage , complete with political spin.  A look at the non-seasonally adjusted (NSA) numbers provides some interesting color, though. The Professional and Business category did in fact post a loss of 14,200 jobs m/m on an NSA basis, providing some support to the argument that the state’s high cost of living is driving out businesses. However, the Leisure and Hospitality sector actually added 1,100 jobs on an NSA basis, thereby supporting the claim that ...

In the August 2026 edition of its AgLetter , the Federal Reserve Bank of Chicago reports that farm values in the Seventh Federal Reserve District held steady y/y in the second quarter. As the below exhibit illustrates, the results were split, with farm values in Illinois and Iowa seeing gains, while those in Wisconsin and Indiana posted y/y losses. However, the Chicago Fed’s economists note that in real terms, farm values in the district declined 3.7% y/y in the quarter. Some lenders commented that “investment activity for data centers and solar and wind farms helped hold up agricultural land values”. The below exhibit is reproduced from the Chicago Fed’s August AgLetter . Source: Federal Reserve Bank of Chicago  

The results of Federal Reserve Bank of Kansas City’s August Services Survey indicate a weakening services sector in the Tenth Federal Reserve District. The top line composite index moved into negative territory for the first time since November 2025, falling to -3 in August from 14 in July. Similarly, the general revenue/sales index fell to 0.0 in August from 19 in the prior month. The employment indexes, employee count, part-time employment and hours worked, were all in the negative single digit range, but it should be noted that these indexes have been bouncing between single digit positive and single digit negative all year. The declines in the six-month expectations indexes were particularly grim, with the composite index falling to 5 in August from 24 in July, and the general revenue/sales index falling to 12 from 39. Finally, the employment six-month expectations indexes all moved from modestly positive to modestly negative territory. One survey respondent noted that “business ...

The Texas manufacturing sector posted solid growth in August according to the results of the Federal Reserve Bank of Dallas Texas Manufacturing Outlook Survey . The top line production index increased six points m/m to 16.1, while the new orders index jumped to 22 in August from 5.4 in July. Capacity utilization and shipments also increased m/m. Additionally, the general business conditions index and the company specific outlook index both gained in the month. The only relatively weak area was employment, with the employment measure falling, while the hours worked index ticked up only slightly. However, all of the six-month forward expectations indexes, including the employment measures, were higher m/m. The results from the Texas Service Sector Outlook Survey were a bit more muted. The top line revenue index fell in August to 6.6 from 9.5 in the prior month. Similar to the Manufacturing Survey, the employment and part-time employment indexes were lower m/m, but the hours worked index...