Employment: Real Numbers vs. Fictitious Dystopian Hellscapes
We consider the two sets of books kept by politicians on economic performance with one version presented at the national level and a separate one at the state level.
We consider the two sets of books kept by politicians on economic performance with one version presented at the national level and a separate one at the state level.
With another round of employment statistics under our belt last week, we consider the state of the factual in political discourse and the failure to apply it.
The typical red state governors cite the horrors of the US economy right now and team up with Senators and House Reps to run more sets of books than Meyer Lansky.
For a different audience, the home state leaders often tout the extremely positive state level economic numbers and then go to Washington with some very different themes when it is not “their guy” at the State of the Union podium.
One of these days, someone will connect the dots.
We all ponder when and where employment will finally start to turn and show something resembling a contraction that flows into PCE and GDP and support some of the more defensive hard landing scenarios for the bears.
So, we thought a quick note on employment at one state level might be worth a brief comment. That state is Alabama since that state got some airtime after the State of the Union (SOTU) address.
We looked at the recent US employment data to wrap up last week (see Payroll Feb 2024: Records, Revisions, Reality 3-8-24). Some of that good news worked its way into the SOTU speech themes, but the rebuttal was striking not so much for the usual counter spin but for the state it was sourced from – Alabama. A rebuttal from a GOP Senator that described the US economy as something out of the Book of Revelations or something that would make Mad Max start crying as he curls up in the fetal position.
This inspired us to dig a bit deeper into the BLS’s extensive disclosure on state unemployment statistics. Unsurprisingly, the following commentary reveals that many critics of the US economy are sitting in states with record low or near record low unemployment rates. Their governors routinely boast about their great economies and do so repeatedly. That’s a good thing! However, doing a 180 on the story line and skipping the facts for political purposes is not.
Katie Britt Meets “The Road”
The Katie Britt response from the GOP on SOTU night is not a GOP-only problem across the elections, but it is a useful focal point just by being the most recent. We have seen the same (even if not as bizarre) with others at the helm and notably in the years when Trump, Obama, and Bush were in the White House.
Away from the generic weirdness of the Britt rebuttal was that it was set against the much-heralded economic success of Alabama. That did not make it into the prepared statements of course.
This most recent SOTU rebuttal was especially strange though since it comes from an Alabama Senator, Katie Britt. Her home state has been routinely touting the all-time lows in unemployment and great economic performance of Alabama, which has been staring at some very strong numbers in the home state.
The question could be asked of Coach Tuberville (the other Senator from AL) as well. Tuberville spent most of the last year trying to turn the economic lives of military families into maelstroms of uncertainty, and he naturally applauded the Britt sales pitch from a “housewife.” Tuberville is typically not encumbered by facts or specifics or concepts either.
The charts (above & below) tell a timeline story on Alabama unemployment rates and how that framed up across the recent cycles and under Trump and Biden. The whole process of evaluating economic facts gets so cynically disconnected from the truth that you can laugh or cry or get harsh. I am Boston Irish, so the options are limited. We will have a downturn. We always do. In the meantime, the economic performance of so many states has been impressive, and many of them are deep red. So don’t lie about it.
The above chart hammers home how much better the employment picture has been in Alabama under Biden. You don’t have to give him credit for it. You just can’t misrepresent the health of the Alabama economy. You need to point to a fact somewhere. If inflation is your only theme, then say it. Of course, it would help if you could even remotely identify the causes of inflation beyond the simplistic “Biden caused it.” More often than not, the talking heads run out of material quickly and reveal themselves to be conceptually bereft and factually devoid. Talking points without substance can’t be your life’s blood.
Some questions to ponder…
The questions go like this for Katie Britt (or Coach T, who we think needs to watch more economic game film):
Is your home state Alabama in awful economic circumstances? If not, which states are you referring to that are in such pain? You have 49 more to choose from, and I need to know which states earned the almost-tears.
If Alabama is a mess, did anyone inform your Governor? (I have these press releases here that say otherwise.)
At a 2.5% average unemployment rate in 2023 (source: BLS) and 2.8% to end the year, is that higher or lower than the overall US? (Hint: it is lower.)
I see here you hit record low unemployment rates in 2023 on multiple occasions. Were those levels lower than in the Trump Administration? (Hint: Yes. See the chart above.)
How can that be when the economy is the worst it has ever been?
Are more people working today in Alabama than in Jan 2021? Jan 2022? Jan 2023? Are more people working than in Dec 2019 before COVID? Are unemployment rates higher or lower?
If your state is doing so great, are you worried about some other states than your own? Which ones did you have in mind? Are you concerned about the 16 states that had higher unemployment rates than the US rate of 3.9%? I see zero states currently above the median unemployment rate of 5.8% since the start of 2009. Actually, none are even close. Hmmm. Must be rigged data. Probably mail-ins.
If you are not worried about the auto and aerospace and defense boom in Alabama, is your Sweet Home Alabama heart bleeding for Governor Gavin Newsom in California? I am sure he is waiting with bated breath for a pep talk as he tries to get the unemployment rate under 5%. I am sure he appreciates your selfless concern for him as he manages one of the largest countries in the world – a state that has helped make the US the global leader in technology.
Did you lob in a call to Doug Burgum in North Dakota to see how he is holding up under the stress of his 1.9% unemployment rate in his home state? He must also be worried about some other states if the US economy is that bad. I understand he exports a lot of his state GDP to other states from the oil patch. I guess there must be some demand out there beyond his state borders. Does the record oil production in the US today show weakness in demand? Does high demand help the economy?
Did you call Kristi Noem to see how South Dakota is keeping the lights on with her 2.0% unemployment rate? She can pursue other interests (Vice President?) with unemployment that low.
Nebraska at 2.5% unemployment in Dec 2023 seems to be holding up pretty well while pitching in on a 1930s dustbowl theme caused by Biden. Maybe they can back you up, Katie. Different spelling but the name Ricketts (NE Senator) just sounds like a health struggle. Of course, he bragged about record low unemployment in his state during the month of June 2022 when national inflation peaked. That was 1 ½ years into the Biden term. He likely has been told “time to get negative.”
Maybe Kansas needs some help with its major presence in aerospace and agriculture and its 2.6% unemployment rate? They seem to be doing ok. They have a Democratic Governor who just announced in Jan 2024 the highest employment in Kansas state history. Obviously, she is a bad actor that cannot be relied upon. You can always turn to Senator Roger Marshall of Kansas. After all, he said Biden was “destroying a recovering economy” so they can skip the “record high employment” setbacks.
Maybe Mike Lee of Utah can help you keep a straight face while making gross misrepresentations and help you level out your facial mood swings? Utah posts 2.8% unemployment. It takes practice to sell economic hardship at those levels. He animates better than almost anyone, feigns shock like Olivier, and gets camera time for it in SOTU events.
Maybe Wyoming, with more Senators than House Reps and less people than the District of Columbia, can help out from their 2.9% unemployment rate. The needle moved on Liz Cheney being unemployed. With Senator Barrasso, they punch above their weight class.
One last question Katie, which states do we send the sympathy cards to since Alabama is clearly crushing it? Alabama presumably only did that despite Biden, who has overseen a superior national GDP performance vs. Trump (see Tale of the Tape in GDP: Trump vs. Biden 12-4-23). Then again, those planes and cars and components made in Alabama do cross state line to buyers, right? Or is that too much economic theory?
You get the idea overall with Iowa unemployment at 3.0%, South Carolina at 3.0%, Florida at 3.1%, and Georgia at 3.2%. Pick a state and reconcile the trends of 2021-2024. The good news is that facts are there. The bad news is that too many of the economy bashers have a severe allergy to facts. Everyone needs to go along with the narrative, or you lose the sense of collegial cohesion with other liars. That is a violation of group trust.
Ok I need to get back to the economy now….
This is the SOTU rebuttal version, right?
The above is the Alabama version of the economy. We would highlight the above visual is using 2022, the toughest year of the tightening cycle and inflation battle. A healthy number of jobs were added nationally in every month in 2022 (see Unemployment, Recessions, and the Potter Stewart Rule 10-7-22, December Jobs Report: Mixed Feelings 1-6-23).
Alabama is clearly a success story in no small part due to government policy (federal and state) as well as private sector investment. Airbus and the auto transplants among many others are there for a reason. That reason is not the factual exactitude of their Senate members. Strong demand for autos and airplanes is a function of the national consumer sectors and corporate health. Leisure and travel usually do well when people have jobs.
The whole political approach to the two sets of books revolves around bragging about state level success but then amorphously and ambiguously describing economic catastrophe at the national level. That approach is lame and cynical and jaded. The game is old hat. I just wish media talking heads would prepare a few more obvious questions to call them out. This one would have been a layup. Facts matter.
State on state economic zero sum games are also a reality…
On a separate note, Alabama is one of those states that receives far more in funding allocations from the Federal government in the deployment of tax revenues than Alabama pays in. New York is one of the states that pays in far more than it receives and is routinely one of the top net tax donors (along with CT, NJ, MA). Those states get the honor of subsidizing what some have dubbed the “moocher states.”
There is a reason that Congress does not want a “net tax donor” and “net tax taker” analysis done each year. Maybe one representative from those net donor states can get a “rebuttal to the rebuttal” each year after the SOTU. They have earned it.
Alabama has been a winner in defense allocations and the investment of so many global players in the auto sector among other trends. That good news offers favorable economic upside and is mirrored in quite a few states. Rolling up state-level performance (with all its related self-congratulatory commentary from their governors) to the national economic story calls a lot of BS on the Washington DC talking heads saying something very different in other venues.
Katie: as a suggestion for the next time, this is a better economic hardship look.