Pennsylvania’s economy could be impacted by a potential recession in 2020, according to two separate studies looking at how states across the country would weather broader economic forces in the year ahead.
Researchers with Bloomberg suggested the Keystone State could be one of seven across the U.S. entering a state of contraction, while the online economic publication Fit Small Business placed Pennsylvania in the middle of its look at the states most likely to survive a recession.
In addition to Pennsylvania, Bloomberg’s analysis suggests three other battleground states – Michigan, Ohio and Wisconsin – that tilted in President Donald Trump’s favor in the 2016 race could be vulnerable to contraction during the upcoming pivotal election year.
The Bloomberg analysis was based on data from the Federal Reserve Bank of Philadelphia, but does not necessarily portray an ominous picture of next year’s economic climate in the respective states.
“The data don’t predict recessions in Michigan, Pennsylvania, Wisconsin and Ohio,” Bloomberg’s Alexandre Tanzi and Gregory Korte wrote in the article. “Rather, it shows the states may be entering a weak period in their business cycles.”
Fed indexes reveal Pennsylvania’s economy contracted 0.13 percent at the end of the third quarter of this year. By contrast, the national economy continued to expand at the end of 2018 in the state to the tune of 0.73 percent.
The other three states expected to contract next year, according to the Federal Reserve, include Rhode Island, West Virginia and Wyoming.
The Federal Reserve’s economic forecast in other states is different, particularly those in the southern portion of the country, which points to continued growth in the year ahead. South Carolina is expected to have the strongest growth.
The Fit Small Business report, “Best States to Survive a Recession in 2020,” placed Pennsylvania No. 25 in its roundup. The organization’s analysis dug into such data as availability of stabilization funds, economic strength and diversity, the unemployment rate and a look at each state’s performance in the 2008 recession.
Pennsylvania received an overall score of 29.35 in the Fit Small Business analysis. Top performer Texas, by comparison, received a score of 35.37, while the No. 50 state on the list – Montana – notched a score of 21.2.
On a more granular level, Pennsylvania was dinged in Fit Small Business’ analysis for not having any stabilization funds available in the event of an economic emergency. The categorical item accounted for 15 percent of each state’s overall score.
Other statistical data that contributed to Pennsylvania’s overall score included the state’s 3.9 percent unemployment rate and the current median home value price of $175,600 across the state.
Kelly Main, a staff writer with Fit Small Business, said the organization’s analysis revealed some general trends in different regions of the country.
“Our research revealed that, generally, both southern and Midwestern states are best equipped to handle the next recession,” Main wrote.