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Except For Locked-Down Blue States, America’s Economic Recovery From COVID-19 Is Amazingly Strong


The nation’s corporate media have mostly downplayed or ignored the U.S. economy’s remarkable performance following the COVID-19 lockdowns earlier this year. They have completely ignored how pandemic-related economic restrictions in many states have prevented the ongoing recovery from being even stronger.

In just five months, the unemployment rate has fallen by 45 percent from its April peak of 14.7 percent, and the economy has also regained just over half of the 22.2 million jobs lost in March and April. This is a far better performance than most economists expected. Media outlets far and wide, and even the Congressional Budget Office, originally predicted that it would take ten years for the economy to fully recover.

The government’s Bureau of Labor Statistics (BLS) told us on Oct. 2 that the nation’s seasonally adjusted unemployment rate in September was 7.9 percent (down from 8.4 percent in August), and that the economy added 661,000 jobs during the month.

Both CNBC and the Associated Press emphasized that September’s job additions were a sharp drop from the nearly 1.5 million jobs added in August. Both outlets failed to tell readers how volatile government hiring affected these results.

In August, 1.02 million jobs were added in the private sector while government employment increased by 467,000. September saw an increase of 877,000 jobs in the private sector and 216,000 jobs lost in government, primarily in local education. Coming in just 14 percent lower than August, September’s private-sector result was hardly the major “loss of momentum” CNBC and the AP claimed.

Recent government data tells us we are seeing two recoveries. Most states have seen moderate to significant improvements in conditions since April, but ten states, in particular, have not.

While August’s jobless rate was 8.4 percent, the following ten states, according to the BLS’s Sept. 18 detailed report, turned in results above 10 percent. Most of the laggards were well above that double-digit threshold:

California: 11.4 percent
Hawaii: 12.5 percent
Illinois: 11.0 percent
Massachusetts: 11.3 percent
New Jersey: 10.9 percent
New Mexico: 11.3 percent
Nevada: 13.2 percent
New York: 12.5 percent
Pennsylvania: 10.3 percent
Rhode Island: 12.8 percent

These states have one thing in common: Their governors have imposed severe pandemic-related restrictions on economic activity, and they have been either been extraordinarily reluctant to or have directly refused to lift them, despite COVID-19’s diminishing mortality threat.

These ten states have just under one-third of the country’s population. Their combined population-weighted unemployment rate in August was 11.4 percent. This means the unemployment rate for the rest of the nation was below 7 percent.

Given the national unemployment rate’s half-point drop in September and the continued refusal of the governors of these ten states to make significant moves to genuinely reopen their economies, it’s reasonable to predict that the contrast between them and most of the rest of the country will be even starker on Oct. 20 when the BLS releases its next state-level report.

It’s likely that corporate media will either fail to notice the seriously lagging states before Election Day — or, if they do, they will fail to properly assign blame. In the AP article noted earlier, reporter Christopher Rugaber claimed that the economy “has remained one of the few bright spots in (Donald) Trump’s otherwise weak political standing.” He then contended that “voters in some battleground states may feel differently,” and specifically cited Pennsylvania’s 10.3 percent unemployment rate as an example.

The Trump administration presides over the entire country. That includes states which are recovering strongly and those which aren’t. For that obvious reason, longtime economics reporter Rugaber should have known better than to imply that Trump is the only reason the Keystone State’s recovery is lagging. It’s reasonable to suspect that he and other reporters in the business press know what’s really happening and that they simply won’t tell us.

Pennsylvania Gov. Tom Wolf and his administration are the real culprits here. The state’s original stay-at-home and shelter-in-place orders stretched into mid-May. When some “non-essential” businesses began defying those orders, Wolf took to the bully pulpit to warn businesses the state could pull their licenses and other required government approvals to operate. He also threatened to withhold state and federal funding from counties whose district attorneys announced they would not prosecute offenders.

The state’s current gathering restrictions, all of which clearly continue to stifle economic activity and keep many businesses from reopening, include the following:

  • An indoor gathering limit of 25; outdoors, it’s 250.
  • Restaurants and bars can only operate at 25 percent of capacity for indoor dining (50 percent for restaurants which are “self-certified”).
  • On-premises alcohol consumption is banned unless the drinks are served as part of a meal.

In mid-September, when a federal judge ruled that many of Wolf’s pandemic shutdown orders were unconstitutional, Wolf declared he would not heed the ruling, and attacked Trump and the state’s Republican legislators. On Oct. 1, a federal appellate court allowed the gathering limits to remain in place during appeal.

This strident, authoritarian, my-way-or-the-highway attitude exhibited by Wolf and his fellow governors in the previously mentioned states has injected unprecedented discouragement, uncertainty, and malaise into their respective business climates, while leaving millions of their citizens in serious economic pain. That most of the rest of the U.S. economy is recovering far more robustly is a testament to the fact that Trump hasn’t caused the lagging states’ woes.