Happiness Index: Nevada Left in the Dust

Where the Recession is Still Felt

The recession may be over but don’t tell that to the residents of Nevada and Michigan. Foreclosures are rampant in these two states, unemployment remains frozen in double digits and residents here are generally saddled with debt well above the national average, making these two of the least fiscally healthy states in the country, according to MainStreet’s bi-annual analysis of state-by-state economic data. Nevada, more than most states, felt the full force of the housing industry’s collapse leading up to the recession, while Michigan’s economy suffered a major blow from the struggles of the auto industry. While both have shown modest improvements throughout the economic recovery, Michigan’s 10.3% unemployment and the fact that one in every 103 Nevada homes is in foreclosure show just how far these states have to go toward a full recovery. The recession’s aftermath can be felt in the U.S. as a whole, though to a lesser degree. Unemployment sits at 9.2%, one in every 605 homes was in foreclosure as of May and the average person had $24,810 in non-mortgage debt, or roughly 60% of that individual’s income. Those numbers don’t exactly inspire confidence, but for some states, particularly in the Great Plains and the Northeast, the recession is truly becoming a thing of the past. States like North Dakota and Nebraska have unemployment rates that are less than half the national average, while Vermont has a foreclosure rate that is the envy of the rest of the country, in part because these states were insulated from the worst of the housing crisis and the ensuing economic downturn. Meanwhile, residents in New York and Connecticut have extremely low debt to income ratios, due mostly to the fact that their incomes are well above average. In short, consumers in these states have an easier time finding work, accrue less debt and are less likely to lose their homes than the country as a whole, all of which earn these states a high ranking on our Happiness Index.


How the Happiness Index Works

Every few months, MainStreet analyzes and ranks the financial health of the 50 states and District of Columbia based on three key economic factors: foreclosure rates, unemployment rates and the total non-mortgage debt per capita. The result is the Happiness Index, a report that provides a snapshot of the economic challenges facing consumers in each state. MainStreet used the most recent unemployment data from the Bureau of Labor Statistics and the most recent foreclosure data from RealtyTrac, both of which were from May of this year. In addition, we used Experian’s May data on non-mortgage debt per capita, which includes debt from credit cards, auto loans and more, and paired this with the average personal income by state, based on the Bureau of Economic Analysis’s data from the first quarter of 2010. We then weighed each of these three factors equally to come up with the final rankings. To put these numbers in context, we have also included the rankings from the previous Happiness Index, released in December 2010, which run from one to 51, with the lower numbers being better. In this way, we can see which states have improved the most, and which are still facing a bleak economic reality. Here are the 10 states that currently have the best overall economic environment followed by the 10 states with the worst.


9th Happiest (Tied): Pennsylvania

Pennsylvania has been one of the big success stories this year so far, according to the newest Happiness Index data. In just the seven months ending in May of this year, the state’s unemployment rate dropped by more than 1 percentage point, and the foreclosure rate plummeted from 1 in every 969 homes to about half that many. The debt to income ratio also improved slightly by about 2%, helping this state jump into the top 10. 2010 Rank: 20th Non-Mortgage Debt as % of Annual Income: 59.8% Unemployment Rate: 7.4% Foreclosure Rate (1 foreclosure per # of households): 1,849 Photo Credit: Tony the Misfit


9th Happiest (Tied): Massachusetts

Massachusetts’ economic situation has changed little in the previous seven months. Between November 2010 and May of this year, the state’s unemployment rate improved slightly by 0.6 percentage points, but its foreclosure rate worsened a bit from 1 in every 1,222 homes to 1 in every 1,124. Its debt to income ratio is essentially unchanged. 2010 Rank: 9th Non-Mortgage Debt as % of Annual Income: 46.9% Unemployment Rate: 7.6% Foreclosure Rate (1 foreclosure per # of households): 1,124 Photo Credit: Getty


8th Happiest: Maryland

Maryland continues to rank among the most fiscally healthy states, thanks to its low unemployment rate and debt to income ratio. However, the state’s foreclosure rate slipped somewhat during this seven-month period, dropping from 1 in every 1,685 homes in November to 1 in every 1,301 homes in May. 2010 Rank: 6th Non-Mortgage Debt as % of Annual Income: 52.4% Unemployment Rate: 6.8% Foreclosure Rate (1 foreclosure per # of households): 1,301 Photo Credit: scaramouche


7th Happiest: New Hampshire

New Hampshire is blessed with the third lowest unemployment rate in the country, and one of the lowest debt to income ratios to boot. The only blight on the state’s current economy is its foreclosure rate, which dropped below one in 1,000 during the previous seven months. 2010 Rank: 5th Non-Mortgage Debt as % of Annual Income: 53.2% Unemployment Rate: 4.8% Foreclosure Rate (1 foreclosure per # of households): 930 Photo Credit: Leventhal Map Center


6th Happiest: New York

Unemployment has hovered around the 8% mark in New York for much of the year, better than the national average, but still higher than all the other states in the top 10. However, what the state lacks in employment opportunities, it makes up for with an incredibly low foreclosure rate and minimal personal debt. 2010 Rank: 7th Non-Mortgage Debt as % of Annual Income: 49.4% Unemployment Rate: 7.9% Foreclosure Rate (1 foreclosure per # of households): 3,367 Photo Credit: Getty


5th Happiest: South Dakota

South Dakota, like much of the Midwest, was spared the worst of the housing crisis and the turbulent labor market that followed. While many states saw their unemployment rates hit double digits and have one in every few hundred homes foreclosed on, South Dakota has coasted along with dreamy economic numbers. 2010 Rank: 8th Non-Mortgage Debt as % of Annual Income: 62.5% Unemployment Rate: 4.8% Foreclosure Rate (1 foreclosure per # of households): 3,974 Photo Credit: Mykl Roventine


4th Happiest: Wyoming

After claiming the top spot on the Happiness Index at the end of last year, Wyoming slipped back a bit, though it still ended up in the top five. Though the state’s unemployment rate improved somewhat, dropping from 6.6% in November to 6% in May, its foreclosure rate worsened. In November, just 1 in every 2,800 homes was in foreclosure. 2010 Rank: 1st Non-Mortgage Debt as % of Annual Income: 55.6% Unemployment Rate: 6% Foreclosure Rate (1 foreclosure per # of households): 2,331 Photo Credit: whatleydude


3rd Happiest: Nebraska

Nebraska held onto the top spot through several consecutive cycles of the Happiness Index, before losing out to Wyoming in December. The state has since slipped one more spot though the three financial markers have held remarkably steady this year. 2010 Rank: 2nd Non-Mortgage Debt as % of Annual Income: 59.5% Unemployment Rate: 4.1% Foreclosure Rate (1 foreclosure per # of households): 2,788 Photo Credit: Kables


The Happiest (Tied): Vermont

Vermont’s economic situation has long stood out from the rest of the country’s and only continues to improve. The state’s foreclosure rate is by far the lowest nationwide, and it has the sixth lowest unemployment rate overall. During this seven-month period, Vermont’s unemployment rate improved by .3 percentage points, its debt to income ratio improved by more than 3 percentage points, and as if its foreclosure rate weren’t low enough already, it dropped further from 1 in 31,262 in November to 1 in 39,281 in May. All of that was enough to finally land Vermont the top spot on the Happiness Index, though it will have to share that honor with the next state on our list. 2010 Rank: 3rd Non-Mortgage Debt as % of Annual Income: 60.1% Unemployment Rate: 5.4% Foreclosure Rate (1 foreclosure per # of households): 39,281 Photo Credit: Bruce Tuten


The Happiest (Tied): North Dakota

One can’t help but pine for the days when America’s economy more closely mirrored the current situation in North Dakota. This state has the lowest unemployment rate and the second lowest foreclosure rate. In fact, North Dakota’s economy is one of the only ones in the nation to be expanding beyond pre-recession levels, which is why its unemployment rate dropped from 3.8% to 3.2% in the previous seven months. At that rate, there might not be any unemployed people left in the state by the next time we do this list. 2010 Rank: 4th Non-Mortgage Debt as % of Annual Income: 61.2% Unemployment Rate: 3.2% Foreclosure Rate (1 foreclosure per # of households): 9,589 Photo Credit: afiler


10th Least Happy: Alabama

While Alabama’s foreclosure rate has improved somewhat in recent months, residents continue to be saddled with one of the highest debt to income ratios in the country, and the state’s unemployment rate has actually worsened by more than half a percentage point. 2010 Rank (Out of 51): 38th Non-Mortgage Debt as % of Annual Income: 73.1% Unemployment Rate: 9.6% Foreclosure Rate (1 foreclosure per # of households): 1,433 Photo Credit: Southernpixel


9th Least Happy: Utah

Utah’s economic situation has shown faint signs of recovery, but there is still a long road ahead. The state has the fourth highest foreclosure rate in the country and the seventh highest debt to income ratio. 2010 Rank: 42nd Non-Mortgage Debt as % of Annual Income: 71.6% Unemployment Rate: 7.3% Foreclosure Rate (1 foreclosure per # of households): 365 Photo Credit: Pink Sherbet Photography


8th Least Happy: California

California was hit harder than most by the housing crisis – not to mention its government’s budget nightmare. The state currently has the second highest unemployment rate in the country and the third highest foreclosure rate, each of which are little improved from seven months prior. The only area where California excels is in its average debt to income ratio, which ranks among the 10 best nationwide. 2010 Rank: 39th Non-Mortgage Debt as % of Annual Income: 54.9% Unemployment Rate: 11.7% Foreclosure Rate (1 foreclosure per # of households): 259 Photo Credit: worldsurfer


7th Least Happy: Florida

As bad as the fiscal situation is in Florida, the state’s economy has shown some substantial signs of improvement. In just seven months, the unemployment rate dropped by 1.4 percentage points and the foreclosure rate has been almost halved, dropping from 1 in 267 homes in November to 1 in 461 homes. It’s not a pretty picture, but the economy is certainly on the right track. 2010 Rank: 45th Non-Mortgage Debt as % of Annual Income: 63.1% Unemployment Rate: 10.6% Foreclosure Rate (1 foreclosure per # of households): 461 Photo Credit: Karen Horton


6th Least Happy: Arizona

Arizona’s economy, on the other hand, appears to be stuck. The unemployment rate improved by just .3 percentage points and the foreclosure rate actually worsened slightly, rising from 1 in 262 homes to 1 in 210. 2010 Rank: 48th Non-Mortgage Debt as % of Annual Income: 71.3% Unemployment Rate: 9.1% Foreclosure Rate (1 foreclosure per # of households): 210 Photo Credit: Ken Lund


5th Least Happy: South Carolina

South Carolina had the unfortunate honor of ranking as the least fiscally happy state in the country on our previous Happiness Index, and continues to place among the bottom five. During this seven-month period, each of the three economic markers improved in South Carolina, but the state still has double digit unemployment and a debt to income ratio and foreclosure rate that are well above the national average. 2010 Rank: 51st Non-Mortgage Debt as % of Annual Income: 72.5% Unemployment Rate: 10% Foreclosure Rate (1 foreclosure per # of households): 730 Photo Credit: Shoshanah


4th Least Happy: Georgia

Georgia’s unemployment rate has hovered around 10% throughout this year and the state’s foreclosure rate is now the fifth highest in the country. Its debt to income ratio remained essentially unchanged and ranked as the 10th highest of any state. 2010 Rank: 50th Non-Mortgage Debt as % of Annual Income: 70.6% Unemployment Rate: 9.8% Foreclosure Rate (1 foreclosure per # of households): 387 Photo Credit: totalAldo


2nd Least Happy (Tied): Idaho

Idaho has little to show this year so far in the way of economic progress. The state’s unemployment rate was unchanged between November and May, and the average debt to income ratio actually increased by about 1 percentage point, making it the third highest nationwide. The foreclosure rate improved slightly, but is still the sixth highest in the country. 2010 Rank: 47th Non-Mortgage Debt as % of Annual Income: 77.1% Unemployment Rate: 9.4% Foreclosure Rate (1 foreclosure per # of households): 460 Photo Credit: amanderson2


2nd Least Happy (Tied): Michigan

Much has been written about the resurgence of the auto industry in Detroit and the surrounding regions, but any recovery is slow coming in Michigan overall. Though the unemployment rate improved by about 1 percentage point during this seven-month period, it is still the fifth worst in the nation, and the state’s foreclosure rate remained essentially unchanged. 2010 Rank: 49th Non-Mortgage Debt as % of Annual Income: 66.6% Unemployment Rate: 10.3% Foreclosure Rate (1 foreclosure per # of households): 311 Photo Credit: jimmywayne


The Least Happy: Nevada

Of all the states, Nevada may have the longest road ahead. This state has the highest unemployment rate and by far the highest foreclosure rate, and its debt to income ratio is well above average. To be fair, Nevada arguably had the most to overcome, with an unemployment rate above 14% at one point and a foreclosure rate of more than 1 in 100. Unfortunately, even now, the state’s unemployment rate is stuck above 12% and its foreclosure rate is little changed at 1 in 103. More than any other state, Nevada seems in danger of being left in the dust by the economic recovery. 2010 Rank: 46th Non-Mortgage Debt as % of Annual Income: 67.1% Unemployment Rate: 12.1% Foreclosure Rate (1 foreclosure per # of households): 103 Photo Credit: matze_ott


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