Last week, Moody's Analytics economist Mark Zandi released a graphic showing that Delaware is one of the states facing a high risk of recession.
Zandi has been a widely quoted economist for decades and was known to make a presentation or two in Delaware when he owned Economy.com, based in West Chester, PA. In 2005, he sold the business to the investment ratings firm Moody's.
Delaware isn't alone in being at risk, according to a listing from Zandi. the only state in the region in an expansion mode is Pennsylvania. The states of New York and California are "treading water" and hold the key to whether the nation will see a downturn.
Zandi's assessment runs counter to the perception among some that Delaware is in decent shape. That assessment is partially due to a jobless rate that's around the national average and the state government having an investment-grade credit rating.
A financially strong government is important in Delaware, since that sector, for better or worse, accounts for a sizable chunk of total employment.
Zandi sees signs nationwide of job growth being confined to healthcare and hospitality. Based on the recent wave of restaurant closures in Delaware, the hospitality industry may no longer be a growth area. Healthcare employment in Delaware increased by 2,600 over the past year, with hospitality accounting for about a third of that number. Construction also saw slow growth.
Zandi has been sounding the alarm on the economy for some time. His case was bolstered this week by anemic job growth numbers and a rising US employment rate. Delaware will release unemployment figures on Sept. 19.
Republicans will discount Zandi's assessment. During Trump's first election campaign, he was accused of injecting his personal views into his evaluation of the future president's economic plans. Zandi denied any bias, while acknowledging that he is a registered Democrat. He also noted that his company had advised GOP Presidential candidate John McCain.
Recently, the Trump Administration alleged that the economic numbers are being manipulated, with the president firing the head of the Bureau of Labor Statistics. Last week's revision showed job growth had weakened.
What's next?
The stock market is betting that an expected reduction of interest rates by the Federal Reserve will help. A wild card is the president's evolving tariff policies and their impact on inflation. What no one wants to see is "stagflation," characterized by negative job growth and higher inflation. - Doug Rainey, chief content officer.
State-level data makes it clear why the U.S. economy is on the edge of recession. Based on my assessment of various data, states making up nearly a third of U.S. GDP are either in or at high risk of recession, another third are just holding steady, and the remaining third are… pic.twitter.com/DXPzn7GOrb
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