Nine state economies expected to shrink this year, most since 2008 recession
The list of states that are predicted to shrink this year increased from October
The list of states that are predicted to shrink in 2020 increased from October 2019.
Nine states’ economies are expected to contract within the next six months, the highest amount since the financial crisis, according to new projections published by the Federal Reserve Bank of Philadelphia.
West Virginia’s economy is forecast to shrink the most, according to the latest figures.
But a handful of other states could see growth falter in the first half of 2020, including Pennsylvania, where the decline is anticipated to be the most severe since May 2009, according to Bloomberg, which first reported the news.
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Montana, Oklahoma, Vermont, Delaware and New Jersey are also expected to slide into contraction this year, possibly hurting President Trump’s reelection odds in 2020. In 2016, Trump eked out a narrow victory over Democratic candidate Hillary Clinton in Pennsylvania, though he won decisively in Montana, Oklahoma and West Virginia.
Residential street in downtown Charleston, West Virginia with the Capitol building in the background at sunrise.
The list of states that are predicted to shrink this year increased from October, when just Montana, Pennsylvania and West Virginia were included.
The bank is anticipating that 41 states will grow over the next six months.
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Early voting state Iowa is also predicted to see marginal growth over the next few months, according to the bank, which produces six-month leading indexes for the 50 states each month.
The index calculates the six-month growth rate by analyzing different state data including housing permits, initial unemployment insurance claims, delivery times from the Institute for Supply Management manufacturing survey, and the interest rate spread between the 10-year Treasury bond and the 3-month Treasury bill.