October Geo Score, Swing States and Three Others

This week we bring you the October 2016 DIVER Geo Scores. DIVER Geo Scores are designed to quickly communicate the overall economic health of a selected geographic area on a scale of 0 to 10. The Geo Score reflects the relative economic well-being of the location and is available for all States, counties, and approximately 350 of the largest cities.  Calculations are released monthly and are based on multiple, meaningful economic and demographic data from the employment, income and housing categories.

Geo Score Summary

Among the States with the largest increase year over year, we note that eight of the ten saw significant declines in unemployment and most saw an increase in the labor force as well as a stronger housing market.

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At the other end of the State Score spectrum, those with the most significant decline from October 2015 to October 2016, we note an increase in unemployment and a decline in income among most.

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At the county level, the results for those with the biggest gains were driven by the same factors as the States, while the counties with the largest declines saw widespread declines across employment, income and housing (all categories that makeup our Geo Score).

For cities seeing the greatest Geo Score gains over the past year, the primary drivers for most of the top 25 movers were improved employment and housing conditions.  Conversely, the cities that saw the largest declines in their Geo Scores over the year experienced weakening employment and housing conditions.

Swing States

With the election one day away, we thought we would take one last look at the Geo Scores for the swing States.  While this election seems less about the economy and policy and more about insults, who knows, maybe the direction of the economy over the past year in swing States can offer some insight. We provide two views: who is favored by the current Geo Score (5 or greater favoring Clinton and below 5 favoring Trump; who is favored by the year on year trend (Geo Score greater than last year favors Clinton and less than last year favoring Trump).

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A Look at New Mexico, Arizona and Texas

Last week, Moody’s downgraded New Mexico from Aaa to Aa1 (with S&P holding at AA+ and Fitch not having rated the State).  New Mexico’s Geo Score is a 0 (on a scale of 0-10) driven in part by a high poverty rate.  Their Geo Score did not change month on month.  In fact, it has been seen little movement over the past year.  The economy matters.

Arizona, the 14th largest state by population, is rated Aa3 by Moody’s and AA- by S&P (NR by Fitch). In October, Arizona’s Geo Score, had a significant decline of -0.6 with its decline centered on poor income data and high poverty rates.  In addition to Arizona’s declining Geo Score, we also note that their filing of audited financials has not been stellar.  As the table below highlights, Arizona has been late for its CAFR filings and, in 2015, analysts and creditors waited even longer (342 days – 161 days late) for the filing.

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Texas has seen a slight improvement (+0.2) in its Geo Score from a year ago.   As the 2nd largest state by population, with current ratings of Aaa by Moody’s and AAA by S&P and Fitch, economic and demographic factors look relatively stable.  However, several cities in Texas drew our attention (all of which came to market this year).  These cities are worth monitoring.

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Have a great week,

Jane Ma
Senior Data and PM Analyst