Nebraska’s gross domestic product (GDP) grew 2.9 percent during the second quarter according to the U.S. Bureau of Economic Analysis (BEA). This comes on the heels of a real growth rate of 6.4 percent in the first quarter. By comparison, the national economy grew 6.7 percent during the quarter. Nebraska’s rate of growth ranked 47th among states and it was one of four states including Wyoming, Delaware, and Alaska with growth rates of less than 3 percent (Figure 1). Nebraska’s neighbors had growth rates greater than 6 percent, exception for Wyoming and South Dakota, while Nevada saw the highest growth rate among states of 9.7 percent.
Economic growth at the national level stemmed from increases in personal consumption, fixed investment, exports, and state and local government spending. The spending increase went mostly to food services and accommodations, pharmaceutical products, clothing, and footwear. Sectors contributing most to GDP growth during the quarter were food services and accommodations, information, professional and technical services, and real estate. Agriculture, transportation, and retail trade undermined GDP growth during the quarter.
Nebraska’s lower growth rate relative to national growth is related to several factors. Nebraska has the nation’s lowest unemployment rate and one of the nation’s highest labor force participation rates. While labor shortages are an issue across the country, shortages may be more limiting to growth in Nebraska relative to the nation as a whole. Also, the sectors contributing the most to national growth—information, professional, and technical services—do not play large roles in the state’s economy. These sectors contributed to growth in other states, but not so much in Nebraska. Finally, two sectors prominent in Nebraska—agriculture and transportation—shrank at the state level in the second quarter. Thus, they held back growth more so in Nebraska compared to other states.
Figure 1. Percent Change in Real GDP at Annual Rate, Q1-Q2—2021