WalletHub’s 2025 Happiness Report Pinpoints Financial and Work Strains in U.S. States

Published Date: September 11, 2025

Last Modified : September 27, 2025

WalletHub’s 2025 report ranks U.S. states on happiness using metrics like depression rates, unemployment and income, showing Hawaii at top and West Virginia last amid financial and work strains.

Written by: Archana N

Senior Writer & Content Strategist

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Edited by: GlimMarket Editorial

Editors, Writers & Reviewers

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Reviewd by: Dileep K Nair

Senior Editor & Expert Reviewer

WalletHub released its annual happiness rankings on September 8, 2025, covering all 50 states based on data from sources like the Census Bureau, Bureau of Labor Statistics and Centers for Disease Control and Prevention. The study assigns scores on a 100 point scale, with higher numbers indicating better conditions for happiness, across three main categories: emotional and physical well being, work environment and community and environment.

Hawaii tops the list at No. 1, thanks to the highest life satisfaction rates, second lowest depression levels and longest life expectancy in the country. Around 85% of Hawaiian adults report good or better health, ranking 10th nationally and nearly 72% feel active and productive daily.

Maryland follows at No. 2, with the lowest unemployment rate at 3.2% and the highest share of households earning over $75,000 annually. It also has the third lowest rate of traumatic childhood events and fifth lowest suicide rate.

Nebraska ranks third, bolstered by the sixth lowest depression rate, ninth highest share of residents in good health and fourth-lowest unemployment at 2.9%. The state shows the second-highest economic security, factoring in employment, insurance coverage, and financial stability, along with the sixth lowest divorce rate at 18%.

New Jersey comes in fourth, Connecticut fifth, Utah sixth, California seventh, New Hampshire eighth, Massachusetts ninth and Idaho tenth. At the other end, West Virginia ranks last at 50th, with the highest adult depression rate, second-lowest adequate sleep rate, and fourth lowest sports participation.

Louisiana is 49th, marked as the least safe state, with the third highest divorce rate and third-highest average work hours, tied with Wyoming. Arkansas ranks 48th, Alabama 47th, Alaska 46th, Tennessee 45th, New Mexico 44th, Kentucky 43rd, Mississippi 42nd, and Oklahoma 41st.

The rankings reflect national patterns where financial stability correlates with lower stress levels. In top states like Hawaii, the unemployment rate stands at 3.0% and it has the second highest share of households above $75,000 income. Maryland residents report enjoying their work and feeling motivated at the third-highest rate nationwide.

Lower ranked states show higher suicide rates, like Alaska’s highest and longer work hours, with Mississippi tying for fifth highest. WalletHub analyst Chip Lupo stated that “happiest states offer strong economies, quality healthcare, leisure time, and good weather.” These elements tie into broader economic indicators, including recent job reports showing national unemployment at 4.3% in August.

Inflation and Policy Changes Widen Gaps in State Happiness Scores

WalletHub’s 2025 rankings build on patterns seen in prior years, where states with stable economies and strong social supports consistently score higher. The study uses 30 metrics, weighted differently, to compute overall scores, with emotional and physical well being accounting for the largest share.

Inflation at 2.7% nationally has widened gaps, as lower ranked states like West Virginia face higher financial anxiety, ranking 11th lowest in that metric. Work environment metrics include commute times, unemployment rates and average hours worked, with Alaska posting the highest weekly work hours and lowest income growth.

Community factors, such as safety and volunteer rates, drag down southern states; Louisiana ranks as the least safe and Alabama has the third lowest volunteer rate. Nebraska’s rise from ninth in 2024 to third reflects improvements in health metrics and economic security.

Minnesota slipped out of the top 10, from sixth in 2024, due to relative declines in work-life balance indicators. These shifts align with national trends, including a 7% increase in underemployment, workers in jobs below their skill level, since last year, particularly in manufacturing heavy states like Ohio and Michigan, per BLS figures. Policy changes, including tariffs on imports implemented in March 2025, have raised costs for small firms reliant on global supply chains, with 28% reporting higher input prices.

Social isolation rose 8% nationally from 2024, more pronounced in rural low ranked states like Montana and Wyoming, though not in the bottom 10. Divorce rates remain high in bottom states, with New Mexico at the top nationally.

The Conference Board’s Leading Economic Index, down for 28 consecutive months, signals ongoing strain, echoing WalletHub’s findings on economic security. Consumer confidence hit a six month low in August amid job concerns, particularly in lower ranked regions.

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Household Budgets Stretched by Debt and Health Concerns

Families in lower ranked states encounter elevated financial anxiety and health challenges, as seen in West Virginia’s highest depression rate and second lowest sleep adequacy. National median household debt reached $15,000 in non-mortgage obligations in Q2 2025, driven by credit cards and auto loans, per Federal Reserve figures.

In Arkansas, the second-lowest sports participation rate ties to broader well-being declines. GlimMarket notes that these dynamics create cycles where health issues limit productivity, especially in states with poverty rates over 18% like Mississippi.

Job Strain Rises with Layoffs and Longer Hours

Workers report 38% dissatisfaction nationally, up from 32% in 2024, amid tech and manufacturing layoffs. Louisiana’s third highest average work hours and Alaska’s highest suicide rate highlight job related stress. Unemployment in bottom states like West Virginia exceeds the 4.3% national average, reducing leverage in negotiations. In contrast, Maryland’s 3.2% rate supports higher motivation levels.

Small Operations Face Higher Costs from Tariffs and Credit Limits

Small enterprises in trade exposed areas face input cost rises of 10-20% from 2025 tariffs, per industry reports. WalletHub’s economic security metric, second highest in Nebraska, includes insurance and stability factors vital for small business viability. NFIB’s August 2025 optimism index hit a three year low, reflecting credit tightening in states like Alabama.

GlimMarket observes that retaliatory tariffs erode exporter competitiveness in bottom ranked regions.

Expert Views Tie State Disparities to Broader Policy and Market Shifts

WalletHub’s data underscores how policy choices, including tariffs and lending standards, influence state rankings, with top states showing resilient economies amid national slowdowns. Inflation projections toward 4% by early 2026 could exacerbate disparities, as lower ranked states already lag in income growth, like Alaska’s lowest rate.

One third of sectors contract nationally, per recent assessments, with manufacturing job losses projected at 150,000 by Q1 2026 if tariffs expand.

State level variations reveal that high income thresholds over $75,000 correlate with lower anxiety, as in Maryland’s top share. Community metrics, like Nebraska’s low divorce rate, buffer against isolation trends.

Global demand softening from Europe and China may trim 2026 GDP by 0.5%, hitting export dependent small firms harder in mid-ranked states. Federal Reserve signals for 50 basis points in rate cuts by year end face complications from rebounding inflation.

The rankings echo 2008 patterns, with constrained policy tools now amplifying risks. Adjustments in trade and immigration could mitigate downturns, as current setups contribute to what analysts term policy driven slowdowns. Without shifts, lower ranked states risk deeper economic ruts by mid 2026.

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Disclaimer

This article is based on WalletHub’s 2025 Happiness Report and public data as of September 11, 2025, reflecting financial and social trends in the US. GlimMarket has no stake in the entities discussed and offers no financial advice or opinions on investments or policy. Readers should verify findings independently and consult trusted sources before making decisions, as economic and social conditions may evolve.

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