The State of the Economy...and the Presidential Election
Pennsylvania. Political lore has it that people vote their wallets; in large part, they choose a leadership team based on their immediate sense of economic well-being and confidence about the future. Peace and prosperity tend to favor an incumbent, while a distressed economy can spell trouble for a candidate's reelection bid. What follows are snapshots of the economic conditions in the 10 states with the most votes in the Electoral College, which elects the president and vice president.
The Keystone State has always had a split economic identity: its eastern half is the Northeast; its western half, the Midwest. This year, western Pennsylvania is outperforming its eastern counterpart, largely because of its large manufacturing sector. The trend is nothing to get excited about.
"It's not getting bad as fast as it once was," says Jake Haulk, senior economist with Mellon Bank in Pittsburgh. "We're still moving lower as of the second quarter in 1992." In two years the state has lost 130,000 jobs. Both Mr. Haul and the WEFA Group, a forecasting firm in Bala-Cynwyd, Pa., predicted that unemployment will peak this year at an average of 7.3 percent to 7.6 percent, then fall about one-half a percentage point next year.
"Overall, Pennsylvania is faring about the same as the US," says Paul Flora, regional economist with PNC Financial Corp based in Pittsburgh. "The consumers seem to be feeling a little better but still in a mode where they're interested in paying down old debt rather than taking on new debt."
Job uncertainty is also playing a role. Who would buy a washing machine or a house if their job were at risk? What that suggests is that big growth won't come till after the election, Mr. Flora says. "The consumer has to be at the party to keep the party going."