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These Oil States Entered Recession While Rest of U.S. Recovered

Some oil-dependent states suffered recessions last year, dragging down overall U.S. growth
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Oil Market Seeks Demand as Price Falls Below $49


As economists ponder what’s behind the slowest U.S. economic recovery since World War II, a new explanation is taking shape: several states have suffered severe downturns of late that hampered growth nationwide.

Fresh research by Federal Reserve Bank of Kansas Senior Economist Jason Brown shows Kansas, New Mexico, Oklahoma and Wyoming experienced recessions last year, while others saw milder contractions, including Maine, Montana, North Dakota, Louisiana and West Virginia.

Brown said a ripple effect from the decline in commodity prices hit the oil- and coal-dependent states particularly hard, leading to economic contractions as local governments such as Oklahoma cut back on spending. 

The findings also underscore the growing sense of economic inequality in the nation, as data compiled by Bloomberg show states like Washington and Massachusetts grew well above the national average last year. They saw employment climb as joblessness expanded in Louisiana, Oklahoma, Wyoming, North Dakota and Alaska.

The theme played out in the presidential race when Donald Trump targeted his campaign to voters left behind by the economic recovery, pledging after his win to help Americans he called “the forgotten men and women of our country.” Of all the states mentioned that experienced some degree of economic downturn, only New Mexico and Maine supported his rival, Hillary Clinton.