GDP Shrank in Swing States Michigan, Nevada in Run-Up to Election

(Bloomberg) -- Two of the seven swing states likely to determine the outcome of the US presidential election saw their economies contract in the three months through September, based on a gauge from Federal Reserve Bank of Philadelphia.

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Michigan and Nevada were among 14 states that saw a decline in the regional Fed’s monthly coincident index — a proxy of state gross domestic product that combines data on payrolls, the unemployment rate, hours worked in manufacturing and earnings into a single statistic.

The data precede the government’s first look at third-quarter GDP nationwide, which is expected to match the prior period’s 3% annualized advance. (State-level GDP doesn’t come out until Dec. 20.)

It’s one of a few major reports next week — alongside September inflation and October employment — to come out just days before the Nov. 5 election, in which the economy has consistently ranked a top issue for voters.

In the July-to-September period, the coincident index for Michigan decreased by 0.9%, the most of any swing state and third-worst in the country. That’s a notable setback after outpacing the country’s growth as a whole in the second quarter.

Nevada’s index dropped by 0.4%, while that of Wisconsin rose by the same amount. Georgia, Arizona, North Carolina and Pennsylvania each grew by at least 0.5%, trailing the nationwide three-month expansion of 0.7%.

Data from the Bureau of Labor Statistics earlier this week showed unemployment in Nevada rose in September to a three-year high. Other swing states have seen a lower jobless rate recently compared to pre-pandemic levels.

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