The economies of red states – those that lean Republican – have recovered more quickly from the pandemic than blue states, according to a new report.
The Wall Street Journal analyzed federal data and numerous studies and reported that Republican-led states are “winning” the economic recovery by multiple measures.
“Since February 2020, the month before the pandemic began, the share of all U.S. jobs located in red states has grown by more than half a percentage point, according to an analysis of Labor Department data by the Brookings Institution think tank. Red states have added 341,000 jobs over that time, while blue states were still short 1.3 million jobs as of May,” The Wall Street Journal reported.
“To track each state’s progress toward normal since the pandemic began, Moody’s Analytics developed an index of 13 metrics, including the value of goods and services produced, employment, retail sales and new-home listings. Eleven of the 15 states with the highest readings through mid-June were red. Eight of the bottom 10 were blue,” the report said.
“Behind those differences is mass migration,” the report added. “Forty-six million people moved to a different ZIP Code in the year through February 2022, the most in any 12-month period in records going back to 2010, according to a Moody’s analysis of Equifax Inc. consumer-credit reports. The states that gained the most, led by Florida, Texas and North Carolina, are almost all red, as defined by the Cook Political Report based on how states voted in the past two presidential elections. The states that lost the most residents are almost all blue, led by California, New York and Illinois.”
While the economic success of Republican-led states has brought down the United States’ overall unemployment rate, the country as a whole appears to have entered a recession while also suffering from record high inflation.
According to the Atlanta Fed’s GDPNow measure, which is the Federal Reserve’s primary gauge for measuring economic activity, the United States economy will shrink by 2.1% in the second quarter. The 2.1% contraction in the second quarter combined with the first quarter’s decline of 1.6% would mean that the United States has entered a recession.
At the same time, inflation in the United States has reached the highest rate in more than 40 years with prices rising 8.6% from May 2021 to May 2022, according to a new report from the Bureau of Labor Statistics.