Economic output in the first quarter increased by 2.1% nationally, with the highest growth in Western and Southeastern states, while the agricultural Midwest saw a decline. According to new figures from the Bureau of Economic Analysis, Washington state’s GDP surged 4.5% due to the AI boom, while South Dakota experienced a 1.6% drop amidst agricultural challenges.
California saw a 3.7% GDP rise, and both North Carolina and South Carolina increased by 3.2%. Nebraska and Iowa were the only other states with GDP decreases, down 0.9% and 0.1%, respectively. In contrast, personal income rose significantly in North Dakota and South Dakota, driven by increased oil prices amid the Iran war, with North Dakota’s income up 22.4% and South Dakota’s by 11.8%.
The Dakotas experienced a disparity between personal income growth and economic output, with South Dakota’s GDP declining and North Dakota’s barely rising by 0.1%. This discrepancy is attributed to inflation adjustments, where oil price impacts are reflected in personal income but not in inflation-adjusted economic output. Oil production remains essential to North Dakota’s tax revenues.
Hawaii was the only state where personal income decreased, dropping 23.9% due to a downturn in tourism and federal job cuts, as reported in a February state report.
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