Data on the 2020 economy are beginning to provide clear evidence that most state economies, and thus the United States, are recovering from the deadly effects of the coronavirus pandemic. No, the misery is certainly not past, but yes, the number of positive growth signs are finally outnumbering the negative ones.
As a starting point, consider the nearby Department of Commerce rendering of 2020 first-quarter GDP growth for each of the 50 states. There is not a positive number to be seen. Even the darker-blue, higher-growth states found near the fold of the map actually just show lower negative numbers. These range from -1.3% for Nebraska to -3.6% for Wyoming and Arizona.
An even darker picture is seen in the northeast, where New York, for example, shows -8.2%. That region was hit early and hard by the virus, as we all know, but to see how the virus wiped out activity through indirect as well as direct effects, take a look at Nevada, with an economy that depends heavily on tourism and entertainment. Nevada also shows a -8.2% GDP loss.
Yes, things looked rather bleak on the GDP front in March.
We get a dark confirmation of continuing hard times in the below Federal Reserve Bank of Philadelphia’s May coincident indicator map for the 50 states. Every state takes on the most negative hue. While no deep breathing is being registered, fortunately, there was a pulse beat — indeed, a strong one that could not be observed.
We see the evidence in the Philadelphia bank’s just-released July map. Notice that there are now just five states registering a negative reading for the most recently observable three-month change. These are Alaska, Connecticut, Massachusetts, New Mexico, and New York. Three are in the nation’s hard-hit northeast corner. It is also interesting to see the surge of strength in Michigan and Kentucky, two of the nation’s leading automaking states. These give more than a hint that manufacturing is on the move again.
Overall, we are witnessing the results of a reknitting process that combines the effects of massive federal transfers in the form of stimulus and relief funding and the reinventing that is occurring in countless small and large firms that enables work and production to recover.
Of course, we are constantly reminded by public health guardians that we are treading on dangerous ground with schools and universities opening again and large crowds gathering for political and other entertainment activities. At any moment, we are reminded, new surges in the virus can cause state leaders to hit the brakes. Yet, in spite of this and in spite of the difficult road still in front of us, more and more people are learning how to live and prosper again in a coronavirus world.
Let’s remain wary while recognizing that a brightening picture deserves a small celebration.
Bruce Yandle is a contributor to the Washington Examiner’s Beltway Confidential blog. He is a distinguished adjunct fellow with the Mercatus Center at George Mason University and dean emeritus of the Clemson University College of Business and Behavioral Science. He developed the “Bootleggers and Baptists” political model.
