Arkansas Leads US in GDP Growth for Second Consecutive Quarter

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Arkansas led the U.S. in economic growth for the second consecutive quarter in the fourth quarter of 2024, according to federal data released Friday.

The state’s real gross domestic product in the period increased by 5.1% compared to the fourth quarter of 2023, the U.S. Department of Commerce’s Bureau of Economic Analysis reported. Mississippi was second in the country with GDP growth of 4.2% in the quarter. Alaska was third with GDP growth of 4%.

All but two states — Idaho and South Dakota — posted GDP growth in the period. Arkansas’ growth rate was higher than the nationwide annual rate of 2.4%.

The sector that includes agriculture, forestry, fishing and hunting increased in 17 states and was the leading contributor to growth in six states, including Arkansas. The category contributed 2.3% to Arkansas’ annual GDP growth.

Arkansas’ second-highest growth category was health care and social assistance, which contributed 0.62% to annual GDP growth, followed by utilities at 0.42% and manufacturing of durable goods at 0.35%.

In a news release, Gov. Sarah Huckabee Sanders attributed the growth to “commonsense, conservative economic reforms,” such as lower taxes and investments in education workforce development. Secretary of Commerce Hugh McDonald said the state has built
“significant economic momentum.”

“This growth is the result of smart, commonsense public policy under the Sanders administration that is focused on delivering low costs and taxes, cutting red tape, and supporting businesses in Arkansas,” he said in the release.

Personal income in Arkansas increased at an annual rate of 3.6% in the fourth quarter, higher than the 3% rate recorded a year ago and ranked 47th compared to other states.

Farming contributed 1.39% to the state’s annual personal income growth, making it the top category, followed by construction with 0.41% and state and local government with 0.34%.

Economist Michael Pakko wrote on his AR Economist blog that real GDP in Arkansas has shown cumulative growth well above the national average over the past five years. Since the fourth quarter of 2019, the state’s GDP has expanded 17.2%, compared to 12.2% for the U.S.

“The most recent two quarters,” Pakko wrote, “contribute to a widening of that gap.”

Arkansas posted real GDP growth of 6.9% in the third quarter of 2024, the highest in the nation.