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Were Fourth District Local Governments Ready for a Recession? How the Great Recession Influenced How Much They Save
While almost no one anticipated the pandemic-induced shutdown of economic activity experienced this year, local government officials know that the business cycle will sooner or later pull down tax revenues. During years of expansion, cities and counties should be setting aside resources that will enable them to lessen the cuts necessary to balance their budgets during a recession. How prepared were the local governments of the Cleveland Fed’s Fourth District for the COVID-19 crisis?1 Looking at the most recent data available for a sample of the District’s largest cities and counties, we ...
How Much Help Do State and Local Governments Need? Updated Estimates of Revenue Losses from Pandemic Mitigation
I estimate that state and local governments have lost $141 billion of revenue from all sources in fiscal year 2020 (FY20) due to the COVID-19 mitigation shutdowns. Under three scenarios of increasing severity, I estimate that state and local governments will need to cut expenditures by between $59 billion and $350 billion in fiscal year 2021 (FY21) to offset impending loses of revenue. Some of the revenue losses can be offset by the rainy day funds that state and local governments have set aside during the expansion, but jurisdictions that lack a fiscal buffer may face painfully deep service ...
Layoffs during the COVID-19 Pandemic: Four Findings from WARN Act Data
With economic conditions changing so rapidly during the COVID-19 pandemic, the standard layoff indicators that policymakers and analysts use are falling short. These indicators are either not released frequently enough, or they lack geographic or industry information. Some indicators, such as initial unemployment insurance claims, may be less accurate under the current extreme conditions because of processing delays, duplicate claims, and fraud.2
COVID-19 and Supply Chains: A Year of Evolving Disruption
The Federal Reserve Bank of Cleveland regularly surveys a broad cross-section of businesses in the region it serves and convenes business advisory councils in eight of the region’s major metropolitan areas. The information collected through these surveys and conversations points to trends that are not yet apparent in the data and fills gaps in researchers’ understanding of our region’s economy. The information is helpful to Federal Reserve policymakers during their discussions about the nation’s monetary policy. Anecdotes herein have been edited for length and clarity.
Migrants from High-Cost, Large Metro Areas during the COVID-19 Pandemic, Their Destinations, and How Many Could Follow
This data brief presents estimates of the number of people who have already migrated from the high-cost, large population centers to lower-cost and less-populated regions during the pandemic. It also presents the potential impacts on lower-cost regions that might receive more remote workers.2 Migration away from high-cost, large metro areas did spike during the pandemic. Even if the percentage of remote workers following these recent migration patterns is small, the number of these workers may be large enough to provide other regions the opportunity to substantially grow their workforces.
Fourth District Business Response to COVID-19: Early Findings
The coronavirus outbreak has landed hard on economic activity in the Fourth Federal Reserve District. Businesses in the region, which encompasses Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia, are experiencing many challenges—a sharp pullback in demand, the need to furlough workers and shutter factories, and a cloud of uncertainty hanging over their outlooks for recovery.
A Speeding Rate Starts to Slow: COVID-19 Mortality Rates by State
The cumulative COVID-19 mortality rate of the United States has doubled or more each week between February 29, 2020 and April 12, 2020. Thankfully, doubling has stopped in several states as of April 12, 2020. One of these states, Louisiana, had the third-highest COVID-19 mortality rate in the country. In the Cleveland Fed’s District,1 the growth in mortality rates has continued to slow in Kentucky, Ohio, and West Virginia, but not in Pennsylvania. However, in most states mortality rates are still rising rapidly—mortality rates doubled or more between April 5, 2020 and April 12, 2020 in 37 ...
Estimates of State and Local Government Revenue Losses from Pandemic Mitigation
This data brief presents estimates of the impacts of the COVID-19 mitigation shutdowns on US state and local income and sales tax revenue. The author estimates that these revenues will decline by $54 billion in fiscal year 2020 (FY20). Depending on the speed of the recovery over the next fiscal year, another $25 billion to $137 billion of revenue may be lost. If states split their rainy day funds between FY20 and fiscal year 2021 (FY21) to offset these revenue declines, the shortfalls would be reduced to $21 billion in FY20 and $4 billion to $78 billion in FY21.
Did the COVID-19 Pandemic Cause an Urban Exodus?
One constant through the upheavals of 2020 was the steady stream of media reports about residents’ fleeing dense urban areas. In this data brief, I use the Federal Reserve Bank of New York/Equifax Consumer Credit Panel (CCP) and find that migration flows were in fact very unfavorable for urban neighborhoods in 2020. However, people’s taking flight from urban areas is only part of the story.
Getting to Accuracy: Measuring COVID-19 by Mortality Rates and Percentage Changes
Comparing the trajectory of the COVID-19 epidemic in the United States to that of other countries can provide important insights into how the virus is progressing in the United States and the effectiveness of our response. The quality of those insights depends on the data we choose to compare and how we conduct that comparison. This report argues that cumulative mortality rates and their percentage changes are the best available measures for comparing the trajectory of the epidemic in different countries. Based on these measures, the epidemic in the United States has a similar mortality rate ...