State economic growth strengthened in the first quarter of 2026, with real GDP increasing in 46 states and the District of Columbia. According to the Bureau of Economic Analysis (BEA), state-level growth rates ranged from a 4.5% annualized increase in Washington to a 1.6% decline in South Dakota, while Delaware’s economy was essentially unchanged during the quarter.
Nationally, real GDP, measured at a seasonally adjusted annual rate, increased by 2.1% in the first quarter of 2026, led by downward revisions to imports, which are a subtraction in the GDP equation and nonresidential investments. Consumer spending, which is the backbone of the U.S. economy, was revised lower in the third estimate.
Regionally, real GDP increased in all eight regions between the last quarter of 2025 and the first quarter of 2026. Growth was comparatively higher compared to the previous quarter, with regional gains ranging from a 0.2% increase in the Plains region to a 3.6% increase in the Far West.
The Pacific Northwest led state economic performance in the first quarter, with Washington (+4.5%) posting the strongest growth rate among all states. BEA reported that the information sector was the largest contributor to Washington’s economic expansion, reflecting continued strength in technology-related activity. California came in second with 3.7% real GDP growth, followed by North Carolina and South Carolina tied for third place with 3.2% real GDP growth. In contrast, South Dakota recorded the weakest performance, declining 1.6%, driven by the agriculture, forestry, fishing, and hunting sector. Nebraska and Iowa declined by 0.9% and 0.1% respectively, while Delaware was unchanged.
The broad-based nature of growth across states suggests that economic activity improved considerably from the slower pace recorded at the national level in late 2025. While growth was widespread geographically, state-level results continued to reflect differences in industrial composition. States with significant exposure to information and professional services industries generally outperformed, while states more dependent on agriculture faced greater headwinds during the quarter.