Economy

Fed: Some States Could Approach Recession Soon

JM Ashby
Written by JM Ashby

The national economy may or may not enter recession in 2020 or 2021 as some economists predict, but at least some state economies could approach recession in the very near future according to the Federal Reserve of Philadelphia.

The Fed branch says the economies of some traditional "swing states" such as Wisconsin and Pennsylvania will contract over the next six months.

The economies of seven states – including Michigan, Ohio, Pennsylvania and Wisconsin – are projected to contract over the next six months, data from the Federal Reserve Bank of Philadelphia show. [...]

The early primary states of Iowa and New Hampshire are expected to see tepid growth over the next few months, according to the Fed bank, which released six-month leading indexes for the 50 states Friday.

The other states forecast to contract are West Virginia, Rhode Island and Wyoming. The Fed bank projects that the economies of 43 states – led by South Carolina – will expand over the next six months.

The Fed stops just short of saying these states will absolutely enter a recession, but it's clear that their economies will be well below the national average and very close to recession.

What most of these states have in common is the fact that Trump's signature economic policies from his trade war to his deregulation of the coal industry have utterly failed. His trade war has decimated manufacturing in states that rely on it the most and his crusade to roll back Obama-era environmental regulations has not saved the coal-fired bastions of West Virginia and Wyoming.

The Fed currently projects that South Carolina will lead the nation in economic growth next year, but there's one wild card that could still prevent that from happening.

Trump's decision on whether or not to impose tariffs on European cars and car parts is still pending and, if he imposes those tariffs, South Carolina -- where the likes of Volkswagen, Volvo, BMW, and Mercedes are manufactured -- won't be leading economic growth.

I don't know if this will dramatically effect the way residents of these states vote next year, but at the very least it probably doesn't help Trump.

  • How do they sit around their kitchen tables, looking at their financial information and KNOWING that their business is getting crushed, and still support Trump? Very much akin to the people whose states are not getting the Medicaid expansion or whose Republican government screwed up a perfectly good expansion and still support the asshole.

  • muselet

    Now would be an excellent time for the citizens of those seven states—of all fifty, come to that—to sit down and have a good, long think about the correlation between economic policies and the national economy.

    I suspect those citizens will let the opportunity pass by unremarked.

    –alopecia

  • gescove

    I’ve been amazed how some Trump supporters seem immune to plain facts and reality. Some farmers who watched their export markets literally disappear and farm delinquencies/foreclosures/bankruptcies skyrocket thanks to Trump’s Easy To Win Trade Wars (TM) still claim to be supporters. It makes no sense to me, but I agree that “…at the very least it probably doesn’t help Trump.”

    • 1933john

      They vote with their anus, even
      though it’s dark, is my guess.