Here's How We Ranked The 50 State Economies

Chicago mercantile exchange tradersREUTERS/John GressTraders react in the Euro Dollar pit at the Chicago Mercantile Exchange to an announcement by the United States Federal Reserve on interest rates January 28, 2004.

We evaluated the states’ economies on the most recently available data for seven measures of economic strength. The states were ranked on each of the seven measures, and then their rankings were averaged together to create the composite index.

Here’s the seven variables we used in the ranking:

July 2014 Unemployment Rate: This is the headline unemployment rate, reported at the state level every month a few weeks after the national figures by the Bureau of Labour Statistics’ Local Area Unemployment Statistics program.

July 2014 Non Farm Payrolls, change since June 2014: As with the unemployment rate, the monthly change in non-farm payroll jobs is published at the state level a few weeks after the national jobs numbers are released, again by the Local Area Unemployment Statistics program.

2013 State Gross Domestic Product per capita: This is a measure of the total economic activity in an area, adjusted for population. State GDP data comes from the Bureau of Economic Analysis, and per capita GDP was calculated using this and Census Bureau population estimates for July 1, 2013.

2012 Personal Consumption Expenditures per capita: This is a measure of the largest part of Gross Domestic Product: consumer purchases of goods and services. The Bureau of Economic Analysis recently developed a state by state estimate of this figure.

2013 Average Annual Wage: This figure comes from the Quarterly Census of Employment and Wages, a more refined and accurate but less timely measure than the monthly employment and wage figures.

2013 Exports per capita: This is a measure of how important exports to other countries are to each state. The Census Bureau measures the dollar value of exports and imports in each state, and we adjusted by the July 1, 2013 population figures to account for the size of each state.

2012 State Government Surplus/Deficit per capita: As an approximate measure of each state’s fiscal health, we used the Census Bureau’s State Government Finances program and took the difference between 2012 total revenue and expenditure, again adjusting by population estimates for July 1, 2012 to account for the size of each state.

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