Negative Growth

No this isn’t about the stock market this week, but it does shed light on the overly optimistic view of investors leading into this week.

“24/7WallStreet” reports on state economies, and notes that 46 of the 50 states had at least one county with negative GDP growth — that is, economic shrinkage. We’ve said repeatedly that economic prosperity in the US is unequally distributed, and it is. Some people have enjoyed it, while many people have not.

The four states with no shrinkage are

  • California
  • Hawaii
  • Massachusetts
  • New Hampshire

Even in these states, growth had been uneven. Since 2013, the California economy has growth by an impressive 22.5%. However, Colusa County, California has seen growth of “only” 5.3% — itself a good figure compared to much of the rest of the US. The growth rate for the State of Mississippi was 3.2% and for Missouri, 4.8%.

In comparison, Colorado has seen economic growth of 20.7% during this same time span, but Kiowa County has contracted by 25.4%. The Idaho economy grew by 17.8% statewide, but Custer County shrank by more than 40%.

The industries that seem to be driving shrinkage are

  • Agriculture,
  • Mining, and
  • Utilities.

I’m not the first to note that the crisis in American agriculture is very similar to the situation prior to the Great Depression of 1929. Of course, past performance is no guarantee of future results.

Can we lose another 1,000 points today?

Sources:

  1. https://247wallst.com/special-report/2020/02/27/fastest-shrinking-local-economy-in-every-state-2/4/

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