A recent analysis conducted by WalletHub has positioned Massachusetts as the state with the strongest economy in the United States, with Iowa unfortunately ranking at the bottom.
The study, which measures states based on 28 key economic indicators as of April 2025, reveals significant disparities in economic health across the nation.
While Massachusetts scored 70.84 out of 100 possible points, placing it at the forefront of this ranking, Iowa managed only 31.61, underscoring the economic challenges that states can face.
According to WalletHub analyst Chip Lupo, a state’s economic strength is crucial not just for measuring growth but also for enhancing residents’ financial success.
Lupo points out that factors such as low unemployment rates and high average incomes in states like Massachusetts can help residents achieve their financial goals, from homeownership to debt reduction and savings accumulation.
Delving into the specific strengths of the top-performing state, Massachusetts particularly excels in innovation potential, ranking first nationally.
Massachusetts invests significantly in both academic and industry research and development, which has contributed to its economic growth.
Furthermore, the state holds the second-highest rate of invention patents per capita and has a labor force that is heavily concentrated in high-tech industries, boasting the highest share of jobs in these sectors alongside a robust STEM workforce.
In addition, Massachusetts leads the nation with the highest percentage of firms listed on the Technology Fast 500 list, solidifying its status as an innovation powerhouse.
Utah earned the second spot in the WalletHub assessment with a score of 69.18, driven largely by its impressive economic activity.
The Beehive State reports a median annual household income exceeding $88,500 after adjustments for cost of living—a figure representing the second-highest in the nation.
Utah also showcases a healthy labor market, with a low unemployment rate of 3.2%, and has experienced an impressive 6.1% income growth between 2023 and 2024.
This state continues to show potential for future business success, ranking third in both startup activity and business growth rates, as well as sixth for the percentage of jobs in high-tech industries.
The rankings also highlight the strengths of Washington, California, and New Hampshire, which secured the third, fourth, and fifth positions respectively.
Washington, with a score of 68.97, has made its mark through robust research and development investments and a high concentration of tech jobs.
California, despite its staggering economic output of $4.17 trillion in 2024, ranks second in economic activity, though it finds itself at 47th in economic health.
Lastly, New Hampshire’s well-rounded performance earned it solid scores across the various categories evaluated by WalletHub.
In stark contrast, Iowa finds itself in a troubling position, ranking 51st in economic activity and 48th in economic health.
The Hawkeye State’s innovation potential, however, is somewhat better, rated at 29th nationally, though it still faces significant struggles, particularly in attracting new business formation, as it ranks last in startup activity.
West Virginia follows, claiming the 50th position with a score of 32.34, notably struggling in innovation potential, where it ranks at the bottom.
Additional states that faced economic challenges include Hawaii, North Dakota, and South Dakota, rounding out the bottom five economies with respective scores of 33.09, 33.28, and 34.18.
Interestingly, while South Dakota earns a commendable 2nd in economic health metrics, it suffers from poor standings in both economic activity and innovation potential.
The disparities highlighted in the WalletHub analysis reveal stark contrasts between states, such as Louisiana’s per capita export value being 59 times that of Hawaii, and Massachusetts’ proportion of high-tech jobs being four times greater than that of Arkansas.
This analysis serves to illuminate the significant variations in economic health and potential, painting a clear picture of the current economic landscape in the U.S.
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