GDP, or gross domestic product, reflects the economy in a particular region of the world. Though it makes sense to refer to states as having a GDP, you might run into situations where the economic performance of a state is referred to as the GSP, which stands for gross state product. Either way, for the sake of this article, we will be calling them GDP values.
When looking at GDP by state in the United States, the GDP helps inform people about how well a state's economy is doing. The GDP of a state refers to the overall production and distribution of goods in a state. You will find that GDP values are listed as dollar amounts because it is a monetary representation of how much a state either brought in or spent quarterly.
These are two different ways of viewing GDP in a country. The income approach is the former of the two, and it is defined by calculating how much money everyone in a certain location kept as profits over the course of a year. The expenditure method of determining GDP is the exact opposite way of calculating gross domestic product for a particular state. However, the value should still be relatively similar, if not identical. The expenditure method looks at how much money people spent in a given year, compared to how much they made in total.
The gross domestic product of a state is calculated every three months. With this quarterly system in place, the progression or digression of the GDP in each state can be seen so state governments can understand how their economy performed throughout the year. Looking at economic performance from one year to the next is important to see where the state is thriving and where the state could use additional effort. Still, it is more informative for the GDP values to reflect shorter periods.
Many changes occur on a month-to-month basis, and economies are already very fluctuating variables, so it makes more sense to view trends on a smaller scale than reflecting on GDP values once at the end of every year. Now that we understand that GDP values reflect the economic performance, let's start looking at numbers.
The numbers in this article are the GDP for each state in Q3 of 2020. The full 2020 GDP report will be available later in 2021, and this article will be updated again with the annual numbers for 2020.
Gross Domestic Product (GDP) by State
Real GDP increased in all 50 U.S. states and the District of Columbia in Q3 of 2020. According to the U.S. Bureau of Economic Analysis the real GDP for the U.S. as a whole increased at an annual rate of 33.4%. The real GDP by state increased at an annual rate ranging from 19.2% in D.C. to 52.2% in Nevada. In Q2 of 2020, all 50 states and D.C. saw significant decreases in real GDP ranging from -20.4% in D.C. to -42.2% in Hawaii and Nevada.
The significant increases in GDP from Q2 to Q3 reflect the continuous efforts to reopen businesses and resume the economic activity restricted by the COVID-19 pandemic. The leading contributors to the increase in real GDP nationally were healthcare and social assistance, durable goods manufacturing, and accommodation and food services. Healthcare and social assistance increased 75.1% nationally and was the leading contributor in 26 states.
The ten states with the largest GDPs (in millions of dollars) are
- California ($3,120,386)
- Texas ($1,772,132)
- New York ($1,705,127)
- Florida ($1,111,614)
- Illinois ($875,671)
- Pennsylvania ($788,500)
- Ohio ($683,460)
- Washington ($632,013)
- Georgia ($627,667)
- New Jersey ($625,659).
Four states contribute over $1 trillion to the U.S. GDP: California, Texas, New York, and Florida. California has the largest GDP of any state, at $3,120,386,000,000, accounting for about 14.7% of the country's total GDP. Texas follows with $1,772,132,000,000, abot 8.4% of the country's total GDP.