Over 40% of the U.S. population lives in one of the 10 states that have been hardest hit by inflation, collectively accounting for 199 of the 270 electoral votes needed to win the 2024 election. That’s almost 74% of the electoral vote needed to secure the presidency.

Could inflation alone determine who wins the Presidency?

NationalBusinessCapital.com’s inaugural report on inflation found five of the most populous states in the country also rank among the most impacted by increasing costs for goods and services. While it’s very unlikely that strongly partisan inflation-ravaged states like California, New York, Texas, or Florida will be changing colors anytime soon, if their populations vote with their wallets we might see some surprising results.

The report looked not just at where prices have been rising the most but also at indicators of how much difficulty state residents are having when paying their bills. Our results found inflation-distressed states to be primarily located in the South, where households appear to be particularly sensitive to price increases.

The most impacted states, however, were California and New York, which suffered from a potent combination of decreasing wages (when adjusted for inflation) and large price increases from 2021 to 2022. Household budgetary distress, while not quite as high as in the South, was relatively high in both states as well. Over 1 in 4 adults in all 50 states reported difficulty meeting expenses within the last seven days during the first quarter of 2024.

Key Findings

• Almost 74% of Electoral Votes Needed to Win the Presidency Can Be Found in the Top 10 Most Impacted States: If residents in these states voted solely based on inflation, their candidate would be virtually certain to win the presidency. Over 40% of the U.S. Population Lives in One of the 10 Most Affected States: California, New York, Florida, Georgia, and Texas were the most impacted by inflation, respectively. Each of the five rank among the 10 most populous states and collectively account for over a third of the U.S. population, with the remaining five states (Louisiana, South Carolina, Hawaii, Alaska, and Oklahoma) raising that number to above 41%.
• Loss of Real Personal Income in California and New York Compounded the Pain of Big Price Increases: California and New York saw the first and sixth largest price increases on goods and services between 2021 and 2022 along with the sixth and 11th biggest decreases in real personal income.
• Southern States Have Struggled to Absorb Price Increases: While they saw comparatively moderate price increases, residents of the Southern States among the top 10 reported more difficulty meeting expenses and greater rates of credit card delinquency than most other regions.
• Non-continental States Saw Big Increases in Personal Expenditures: Alaska and Hawaii saw the first and third biggest increases in personal consumption year-over-year from 2021 to 2022, with substantial increases in the price of goods and services.
• Swing States Mostly Landed in the Middle of the Pack: With the exception of Georgia, none of the most (or least) affected states are typically cited as swing states for the 2024 election.

THE 10 STATES WHERE INFLATION IS HITTING HARDEST (2024)

1. California

Score (out of 100): 82.9 (1st)

Many of the nation’s most expensive cities are in the Golden State, so it should come as no surprise to hear that Californians are feeling the sharpest sting from inflation.

Prices rose more in California from 2021 to 2022 (130.5 IPD, 1st) than any other state, with real personal incomes declining 6.9% over the same period (6th). Regional CPI remained high over the past year as well at 4% (1st). To their credit, Californians appear to be tightening their belts more successfully than some; despite price increases, personal expenditures aren’t up as much as you might expect (2.4%, 26th). Still, with around 38% of California adults reporting difficulty paying their bills (14th) earlier this year, the state’s stamina may be running low.

2. New York

Score: 76.3 (2nd)

The Empire State saw a big increase in prices from 2021 to 2022 (124.9 IPD, 6th), compounded by a significant loss in real personal income (-5.9%, 11th). Personal expenditures rose by 4.2% (8th) during the same period, adding to the overall stress on household budgets.

The pain does appear to be abating for New Yorkers relatively, however, with Mid-Atlantic states seeing lower overall CPI growth than much of the nation (3.5%, 22nd). Around 37% of New York adults reported difficulty paying for expenses in Q1 of this year (14th).

3. Florida

Score: 72.3 (3rd)

There may be a storm brewing in the Sunshine State. With credit card delinquency rates at nearly 12% (2nd) and over 38% of adults reporting difficulty paying for expenses (11th), household budgets are looking pretty stressed in Florida.

While not as bad as California or New York, Florida did see considerable growth in prices from 2021 to 2022 (118.5 IPD, 13th), along with an increase in personal expenditures (3.4%, 15th). Real personal income also fell, though not as badly as most states (-2.5%, 35th). Whether the pain gets worse will likely depend on whether local service economy salaries can keep up with inflation.

4. Georgia

Score: 70.9 (4th)

Florida’s neighbor to the north is facing similar struggles in this inflationary environment. Nearly 39% of Georgia adults reported difficulty paying expenses (9th). Credit card delinquencies are in the double-digits as well (10.5%, 8th), as consumers turn to plastic to shore up budget shortfalls.

The Peach State may be a good bellwether for the country as a whole. Price increases between 2021 and 2022 fell right around the median (111.2, 25th), with real personal income falling by 4.5% (20th), and PCE increasing by 3% (18th). The fact that so many adults in the state are reporting financial distress anyway speaks to how little margin for error many households have for absorbing price increases.

5. Texas

Score: 67.8 (5th)

Texas has been a powerful economic engine in recent years, a fact reflected by state wages being fairly inflation-resistant (-0.5% real personal income, 43rd). Nevertheless, a small decrease in buying power is still a decrease, and the resulting 4% increase in personal expenditures (11th) is one the Lone Star State is struggling to afford.

Over 39% of Texas adults reported difficulty meeting expenses in Q1 of 2024 (6th), one of the highest rates in the U.S. Additionally, over 11% of Texans are underwater with their credit cards (4th).

6. Louisiana

Score: 66.8 (6th)

Personal consumption expenditures didn’t increase much in Louisiana from 2021 to 2022 (0.9%, 39th), so how did the Bayou State land on our top 10 list?

Unfortunately, while price increases were on the modest side (105.1 IPD, 38th), real personal income in Louisiana took a walloping, dropping 6.1% in one year (9th). Nearly 44% of Louisiana adults reported struggling to pay for expenses in Q1 of 2024 (2nd). 90-day credit card delinquencies, as well, were at 11% in Q4 of 2023 (6th).

7. South Carolina

Score: 66.6 (7th)

Like the other coastal Southern states that landed among our top 10, the Palmetto State has both benefited from domestic migration while also proving to be vulnerable to even modest cost of living increases (108.6 IPD, 28th) and relatively low declines in real personal income (-3%, 30th).

Nearly 39% of South Carolina adults reported trouble meeting expenses in Q1 of 2024 (7th), and the state has a credit card delinquency rate of 10.4% (11th).

8. Hawaii

Score: 66.2 (8th)

Hawaiians, on average, pay some of the highest prices in the nation. They also had to absorb the second-highest price increases between 2021 and 2022 (128.6 IPD, 2nd). Over the same time, Hawaiians saw personal expenditures increase by 4.7% (3rd). Regional CPI remained high from March 2023 to March 2024 as well.

So why didn’t Hawaii rank higher? As stressed as budgets in the Aloha State might appear on paper, however, a relatively low number of state residents reported difficulty paying their bills in Q1 of 2024 (33.6%, 35th). Credit card delinquencies in Q4 were also low compared to most other states (8.3%, 32nd).

9. Alaska

Score: 65.4 (9th)

Trailing Hawaii is the U.S.’s other non-continental state, Alaska. While the Last Frontier’s price premiums aren’t as high as Hawaii's, they are higher than those of most rural states. Alaskans saw the biggest increase in personal expenditures from 2021 to 2022 (5.7%, 1st), though this was softened somewhat by a small increase in real personal incomes (0.7%, 46th), a rarity for that year.

Overall, Alaskan households appear to be moderately stressed, with a little over 34% of adults struggling to pay for expenses (15th) and almost 10% delinquent on their credit card payments (15th). With regional CPI remaining high, however, problems could worsen if salaries fail to keep up.

10. Oklahoma

Score: 64.2 (10th)

While the Sooner State saw relatively low price increases between 2021 and 2022 (103 IPD, 44th), Oklahoman budgets appear to be under considerable economic stress, with personal expenditures rising substantially over the same period (3.6%, 13th).

One thing is for certain: Oklahomans are struggling to keep up. Over 42% of Oklahoma adults reported difficulty paying bills in Q1 of 2024 (3rd). Credit card delinquencies are also well above the national average for states (11%, 5th).

THE 10 STATES LEAST AFFECTED BY INFLATION (2024)

41. Maine

Score: 40.2 (out of 100)

Despite a big hit to real personal income (-6%, 10th), Mainers actually saw a decrease in PCE (-1.7%, 48th). Credit card delinquencies (8.4%, 30th) and reported difficulty meeting expenses (31.2%, 43rd) were also relatively low.

42. North Dakota

Score: 38.8, tied

North Dakota enjoyed the biggest increase in real income of all states (3%, 50th), softening relatively low price increases (102.9 IPD, 45th). Credit card delinquencies are high (10.5%, 9th), however, despite a relatively low number of adults reporting difficulty paying expenses (29.8%, 45th).

42. New Hampshire

Score: 38.8, tied

Despite serious losses in real personal income (-8%, 4th) and growth in prices (124.9, 6th), New Hampshirites actually saw the biggest decrease in PCE (-3.2%, 50th) among all states, with relatively few adults reporting difficulty meeting expenses (27.2%, 49th).

44. Idaho

Score: 38.3

Idaho scored low on all of our metrics except PCE growth (4.7%, 3rd). However, the Gem State's low regional CPI (2.5%) over the last year should help keep it from creeping up the list anytime soon.

45. Iowa

Score: 37.7

Iowa saw some of the smallest price hikes in our report (102.6 IPD, 46th) and had only a small decrease in real personal income (-1.1%, 41st). Credit card delinquencies were on the high side (9.1%, 21st), with about 1-in-3 adults reporting difficulty meeting expenses (38th), which is relatively low for Q4 of 2024.

46. Minnesota

Score: 37.0

Whatever is going on in the North Star State with regard to inflation, Minnesotans are handling it well, with the third lowest rate of credit card delinquency (6.7%) and percentage of adults saying they’re struggling to pay for expenses (28.8%).

47. South Dakota

Score: 36.6

Like its namesake to the north, South Dakota was one of just five states to see an increase in real personal income (1.6% 48th) from 2021 to 2022. Price increases have also been comparatively low (102.1 IPD, 47th).

48. Vermont

Score: 35.8

Like its neighbor to the east, Vermont has managed to decrease its PCE (-0.2%, 44th) despite relatively high price increases (117.3, 17th). Vermonters also reported the lowest rate of difficulty paying bills in Q1 of 2024 (26.7%, 50th).

49. Wyoming

Score: 29.7

Wyoming ranked low in all of our inflation pain metrics, notably seeing only a 0.6% rise in PCE (40th).

50. Montana

Score: 28.4

Montana was one of the few states to see an increase in real personal income (0.8%, 47th) along with modest growth in prices (104.7, 39th). The lack of sales tax doesn’t hurt either.

COMPLETE RANKING OF ALL 50 STATES (2024)

Methodology

To create our rankings, we collected metrics related to inflation rates and consumer stress in each of the 50 states. We then ranked each of the states within each metric and applied a weight to the metric to determine the state’s score in that ranking. Scores within each metric were then aggregated and normalized to give each state an overall score between 0 and 100. States most impacted by inflation received a higher score than those that were less affected.

The seven metrics we chose, along with their weights, were:

• % Change in Personal Consumption Expenditures (PCE) (15%): PCE measures consumer spending on goods and services in constant dollars, and is used by the Federal Reserve to measure inflation. This metric represents the YoY change in PCE from 2021 to 2022. Data was sourced from the Bureau of Labor Statistics.
• % Change in Real Personal Income (15%): This metric measures the change in the amount of money individuals in each state earned from 2021 to 2022 in constant (2017) dollars. Declining purchasing power in a state can stress household budgets. Data was sourced from the Bureau of Labor Statistics.
• Implicit Price Deflator (IPD) (16%): The implicit price deflator is a ratio that measures the change in the price of goods and services YoY. IPD measures a broader range of goods and services than CPI. A higher IPD implies larger price increases. This metric represents the change in prices from 2021 to 2022 and was sourced from the Bureau of Labor Statistics.
• Change in Regional Consumer Price Index (CPI) (15%): CPI measures the average change in prices over time of a selected basket of consumer goods and services and is commonly used to measure inflation. The metric represents changes in CPI in each state’s region between March 2023 and March 2024. Data was sourced from the Bureau of Labor Statistics.
• % Reporting Difficulty Paying for Household Expenses (16%): This metric represents the average number of respondents in each state who reported having difficulty paying for typical household expenses within the last seven days to the US Census Household Pulse Surveys conducted between January and March 2024. 
• Credit Card Delinquency Rate (15%): This metric represents the percentage of credit card balances that are 90 days or more past due in each state. Data is for Q4 of 2023 and was sourced from the Federal Reserve Bank of New York.
• Average Combined Sales Tax (8%): Higher sales tax can magnify the costs of rapidly increasing prices. This metric represents the average combined state and local sales taxes in each state. Data was sourced from the Tax Foundation.