November 4, 2013
“It’s the economy, stupid.” I’m sure many of us remember that statement from a few years back. With a couple of gubernatorial and many mayoral elections at hand, I thought it might be fun to provide our call on these races by looking at how the economies of those States and cities have fared over the past year. If it is indeed “the economy, stupid,” the below may provide some insight into where incumbents are safe and where change may come. This report will print longer due to the inclusion of more tables than usual.
October Geo Score Highlights
Before getting started, I present some highlights (and low-lights) of the October Geo Score released on November 1. As a reminder, the Geo Score is a relative measure of the health of the economy based on a number of factors including Income, Employment and Housing.
GEO SCORE: BY STATE: Virginia Drops Out of the Top 10 & Replaced by Hawaii; California Most Improved
For October, Virginia, which had a monthly decline of 1 for its Geo Score, fell from the top ten and was replaced by Hawaii. North Dakota and Washington DC continue with the top Geo Scores amongst the States while California gets the prize for the most improved State from October 2012 to October 2013. California’s significant increase, to 3.6 from 1.6, is attributed to a significant decrease in Unemployment and Foreclosure Rates, especially amongst the top ten State movers. Also noteworthy is the significant Geo Score increase for Colorado (+1.8), South Dakota (+1.4), Montana (+1.2) and Minnesota (+1). South Dakota, Minnesota and Massachusetts all enter the Top Ten while Maryland, Virginia and Connecticut dropped out.
Nevada and Mississippi continue to have the lowest Geo Scores while Maryland suffered the steepest decline (-1.8). This was followed by Arkansas (-1.6) and Lumesis’ home state of Connecticut dropping -1.6 points. States suffering significant declines in their Geo Scores saw a marked increase in their Poverty Rates. Six of the ten States with most notable declines, including Illinois, Louisiana and Arkansas, saw increases in both their Unemployment and Poverty Rates.
GEO SCORE: BY COUNTY: North Dakota Counties Dominate Top 10; Two Colorado Counties Top List of Most Improved
The top Geo Score counties have a North Dakota tilt, with six counties coming from the Roughrider State. Primary drivers of the Top 10 Geo Score increases were decreases in the Unemployment and Foreclosure rates across the board. Counties with the most significant increases in their Geo Score came from Colorado, California and Florida, all experiencing positive trends in Housing Price Indices.
Although there was not one common factor among counties with the greatest declines in Geo Scores, there was a trend amongst six of the ten counties (Geary, KS; Monroe, PA; Piute, UT; Portsmouth City, VA; Rice, MN; York, PA) all showing decreases in Labor Force Participation Rates, with eight of ten showing increases in Poverty Levels.
GEO SCORE: BY CITY: More good news for California with Best Overall Score and Biggest Increase; Aurora, CO Tops the List of Biggest Increase
This month’s top city Geo Scores saw Redwood City, CA knock out Torrance, CA. For the Top Ten Geo Score increases at the city level, all saw declines in the Unemployment and Foreclosure Rates, as well as positive trending Housing Price Indices. California had 19 of the 25 top movers for cities.
Significant turnover occurred in the Worst 10 cities, with new entrants being Hartford, CT, Muncie, IN, Camden, NJ and Merced, CA. For cities with the steepest declines in Geo Scores, all had increases in Foreclosure rates. Eight of the Bottom 10 also saw increases in Poverty Levels.
For more information or to see a full list of DIVER Geo Scores for the current month, please visit our website at www.lumesis.com/our-solutions/diver-geo-score.
Election Crystal Ball
For purposes of peering into our crystal-ball, the focus is on the gubernatorial races and select cities where the incumbent is running. To help measure just how the economy is doing, I use the DIVER Geo Score as my proxy. The Geo Score measures the economic well-being of the State and city and I use the Geo Score as of October 31 and one year prior. The Geo Score is a proprietary score of the relative economic well-being of States, counties and over 375 cities. Each is rated on a simple scale of 0-10 (ten being the best) and looks at factors associated with Income, Employment and Housing. Importantly, this review is based solely on the economic well-being of the location and does not contemplate a politician’s popularity, time in office or other factors folks may find relevant (don’t get me started on that point).
New Jersey and Virginia are the two States featuring a gubernatorial election. New Jersey’s Geo Score calculated at the end of October 2013 is 6.8, down from 7.0 one year prior. Importantly, on a relative basis, the Geo Score is still above the average for all States. Virginia, similarly strong in that it is well-above the mid-point of 5, has seen its score decline by a full point – from 9 to 8. That ranks amongst the bottom four in terms of year-on-year decline when compared to all other States.
The state of their economies, as measured by the Geo Score, are in good shape (68th and 80th percentile), which favors the incumbent. While both have seen their relative rank drop, they just have not improved as quickly as some other States. Based on the current Geo Score and changes from a year prior, the incumbent is favored. However, the challenger may have find some strength in the fact that their relative rank has dropped (more so in VA), but the overall health favors the incumbent.
The city focus looks at those cities for which we calculate the Geo Score (generally, the largest 375 cities) and where the incumbent is running for re-election. We look at a total of 34 cities. The table below provides a breakdown of those cities and the Geo Scores. Our projected winner is highlighted in green (again, based solely on the Geo Score).
Our methodology for the cities includes the following rules:
- In cases where the Geo Score was flat, the incumbent was given the nod so long as the Geo Score was greater than five.
- Where the Geo Score is above 6, the change must be greater than minus 1 to warrant projecting the challenger as the winner. Of the 34 Mayoral races we will be eagerly watching this Tuesday, we project the incumbent will hold on to their place in 20 of the 34 races (59%).
We’ll let you know the results next week.
A special thanks to Samantha Cohen for this week’s commentary.
Have a great week.
Gregg L. Bienstock, Esq.
CEO & Co-Founder, Lumesis, Inc.
Data Released Last Week:
- UPDATED: DIVER Geo Score, State, County and Place, Current & Trend, Oct 2013
- FEMA Disasters, County, YTD 2013
- Weekly Initial and Continued Jobless Claims, State, 10/19/2013 Drought Intensity, County, Oct, 2013
- UPDATED: Bankruptcy Filings – Issuers, State, County, 2013
- UPDATED: Default Filings – Issuers, State, County, 2013