Map showing states with the most developed economies

The U.S. economy grew 1.4 percent in the first quarter of 2024, according to the Bureau of Economic Analysis.

But in a country as diverse as the United States, the economy works differently in different states. Thirty-nine states and the District of Columbia’s economies expanded to start the year.

Idaho led the nation with a 5 percent annual expansion rate of gross domestic product (GDP). The state’s economy is characterized by lower unemployment than the national rate. In May, the unemployment rate was 3.3 percent, compared with the national rate of 4 percent, according to the U.S. Bureau of Labor Statistics.

The US economy has faced significant challenges over the past year. The COVID-19 pandemic has plunged the country into recession. Although the country emerged from the crisis, it faced inflationary pressures that forced the Federal Reserve to raise rates, which raised borrowing costs across the economy and tightened financial conditions. Despite this, the economy is growing.

Idaho, for example, has recovered from the Covid crisis. In the second quarter of 2020, when the pandemic was at its peak, Idaho’s economy shrank by nearly 25 percent, and the unemployment rate rose close to 12 percent, according to data from USAFacts.

Recent data shows that the state’s economy is driven by retail, information services and construction. According to Idaho’s Department of Commerce, the state prides itself on its balanced budget approach to fiscal policy, low taxes and a business-friendly regulatory environment behind its economic success.

Nevada followed suit, expanding 4.4 percent in the first quarter, showing signs of recovering from the effects of the pandemic recession. The state has been hit hard by Covid as an economy that relies on tourism and leisure and hospitality has lost millions of jobs. The economy shrank by more than 48 percent and its unemployment rate soared to near 31 percent. The unemployment rate has improved and was 5.1 percent in May.

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A bicyclist waits for a green light in historic downtown Boise on May 26, 2018. Idaho’s economy has recovered well from Covid-19.

Stock Photos/Peterv via Getty Images

Other states that posted strong growth were Oklahoma at 4.2 percent, Arizona at 3.2 percent and Delaware at 3.1 percent.

South Dakota, on the other hand, was the poorest performer, contracting 4.2 percent in the first quarter of 2024 after expanding 5.2 percent in the third quarter. The state was also hit by the Covid crisis as its economy shrank close to 17 percent in the second quarter of 2020. Since then, its recovery has been uneven, with five recessions since then, including one that began this year, data from the U.S. show.

Other states that struggled to start 2024 included North Dakota and Kansas, whose GDP each fell 3.9 percent, and Iowa, which saw a 3.3 percent decline.