Western Blue Chip Current Update
January 30, 2026
The states included in the Western Blue Chip Economic Forecast are Arizona, California, Colorado, Idaho, Montana, Nevada, New Mexico, Oregon, Texas, Utah, Washington, and Wyoming.
STRONG Q3 GDP GROWTH IN WESTERN STATES OFFSETS SLOW START TO 2025
After generally weak first quarter growth at the start of 2025, real (inflation adjusted) Gross Domestic Product (GDP) bounced back in the U.S. and Western states with strong third quarter gains. U.S. Gross Domestic Product (GDP) grew at an annualized pace of 4.4% in Q3 compared to Q2. State economies responded in a similar fashion, according to the latest GDP figures for state growth (January 23, 2026) released by the U. S. Bureau of Economic Analysis. Among the Western states, Montana, Oregon, Arizona, Colorado and California grew faster than the nation, while seven Western states grew more slowly (see table).
Nationally, Kansas (6.5%) and South Dakota (6.3%) ranked first and second for the largest Q3 GDP growth. Among Western states, Montana (5.1%) and Oregon (4.7%) had the greatest gains, also ranking 11th and 21st respectively among all states. No Western states ranked among the top ten. Wyoming (2.9%) ranked 49th.
WESTERN STATES REAL GDP GROWTH
| State | Percent Change: Real GDP | ||
|---|---|---|---|
| Q3/Q2 2025 | YTD Q3 2025 | 2024 | |
| Arizona | 4.6% | 2.2% | 4.5% |
| California | 4.5% | 2.5% | 3.2% |
| Colorado | 4.6% | 2.1% | 2.0% |
| Idaho | 3.9% | 2.4% | 4.5% |
| Montana | 5.1% | 2.5% | 3.4% |
| Nevada | 4.1% | 1.8% | 3.1% |
| New Mexico | 3.9% | 1.8% | 4.4% |
| Oregon | 4.7% | 1.1% | 2.1% |
| Texas | 4.2% | 2.6% | 3.9% |
| Utah | 4.1% | 2.8% | 3.5% |
| Washington | 3.4% | 2.5% | 4.7% |
| Wyoming | 2.9% | 0.5% | -0.2% |
| USA | 4.4% | 2.1% | –2.8% |
Source: U.S. Bureau of Economic Analysis, U. S. Bureau of Labor Statistics
With three quarters of real GDP data available for the U.S. and states, calculation of the year-to-date (YTD)growth of GDP provides a (very) preliminary look at how 2025 might compare with 2024. Quarterly GDP growth figures for 2025 were bracketed by a very weak Q1 and a stronger Q3. For the nation, the result is YTD growth of 2.1% through Q3, compared to 2.8% for all of 2024.
Results are similar for most of the Western states. The YTD figures suggest 2025 potentially will be a lower growth year for GDP, depending on Q4 growth. The current consensus among contributors to the Blue Chip panel of professional forecasters calls for U.S. GDP growth of 1.0% in Q4. If this forecast holds, it is likely that the nation and Western states will experience a slowing in GDP growth. For several Western states, it is possible 2025 GDP growth will be half the pace posted in 2024, when final figures become available. Fourth quarter 2025 and preliminary 2025 annual GDP state are scheduled for release by the U. S. Bureau of Economic Analysis on April 9, 2026.
SPOTLIGHT ON TEXAS
“The Texas labor market has slowed notably in the latter half of 2025, with employment in November about 10,000 jobs lower than in May. The state is facing several headwinds, as it is (1) a dominant part of U.S. global trade and, thus, materially impacted by escalating tariffs; (2) heavily dependent on immigrant labor in several key sectors; and (3) impacted by recent adverse events in the oil and gas sector. These factors, along with the associated uncertainly, are likely to remain a near-term drag on economic activity. Nonetheless, the underlying strength in key emerging sectors and competitive business environment should be sufficient to sustain modest growth.”
Ray Perryman, President and CEO, The Perryman Group
“Despite the strong GDP growth numbers at the end of 2025, we’re likely to see a mild national recession in 2026, although Texas will remain in positive territory. Indeed, we may actually see a pickup in business expansions and relocations as the economic situation worsens in other parts of the country.”
Bud Weinstein, Associate of the John Goodwin Tower Center for Political Studies at SMU
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