Hurricane Matthew, Political Rhetoric, Exports and the Economy

October 17, 2016

This week we cover two quite different topics.  We start with a look at the most recent FEMA data regarding Hurricane Matthew; and then, in an attempt to move us beyond the “Sex, Lies and Audiotape” conversation that is occupying the minds of many Americans, we take a closer look at the importance of exports, employment and wages on the economy.

Matthew’s Impact

Hurricane Matthew impacted a significant part of the southeastern United States.  The impact on people and the broader economic impact is still evolving with additional flooding still expected.  What we do know is that, as of this writing, 63 counties, across four States were declared Major Disaster areas while another 50 counties, across two States, were Emergency Disaster areas, as declared and defined by FEMA.  Our thoughts and prayers are with those impacted.  In the coming weeks and months, the impact on jobs, housing and tax receipts and spending will become clearer and is something to watch for.


Source: DIVER Analytics; FEMA.  Red = Major Disaster areas; Blue = Emergency Declaration areas.

Beyond “Sex, Lies and Audiotapes”

Breaking from the constant coverage of topics none of us could have predicted would dominate a presidential election, we turn to the importance of exports – something each candidate has spoken to (do you recall)?  Both candidates have staked out positions (at least relatively recently in one case) that trade with other countries is either awful and we need to re-work deals or there is no interest in new trade deals.  This anti-trade posture, if it were to become policy, should be of concern to those States with a relatively high reliance on exports.  If we cut off trade, change deals or walk away from new deals, we need to consider the resulting impact on US jobs, tax receipts (income and otherwise) and the many other related economic factors.

Quite simply, exports are a critical part of our economy and, for certain States, more important than some may think.  According to the US Census Bureau and the BLS, in 2015, ten States relied on exports for 10% or more of their State’s GDP.  Another 14 have more than 7% (and less than 10%) of their State GDP coming from exports.


Source: DIVER Analytics; US Census Bureau; BLS

If our elected officials were to tear up agreements and not approve or veto others, it is likely that our trade partners would react in ways that will directly impact our exports.  Exports equal jobs and tax receipts.  While our country does have a trade deficit, throwing out the baby with the bathwater may be more detrimental than refining deals or taking other, more productive, steps.

Employment and Wages

Some have opined that our economy is on solid footing.  Indeed, the Federal Reserve continues to suggest that growth (at the new hoped for normal of 2% as opposed to the good ol’ days of 4%) and employment will allow them to raise rates – data dependent, of course.  As we know all too well, we have had one rate increase since last December.  Below we take a look at some data around employment and wages.  While other factors dominating headlines may sway swing State voters, we note the swing States with an “*” in case one thinks declining employment and wage trends are important.

For our analysis, we look at county level data and focused on identifying States and counties meeting the following, year on year, criteria: declining labor force, declining number of employed people, declining wages and an increase in the number of the unemployed.  There are 208 counties (less than 10%) exhibiting these combined criteria across 38 States (and territories).


Source: DIVER Analytics; BLS;

Three of the eleven swing States make the top 10 and they represent a meaningful portion of electoral votes.

Have a great week,

The DIVER by Lumesis Team.