There remains a notable disconnect in the U.S. economy between continued growth and tepid inflation and widespread pessimism and uncertainty about the future among Americans.
“I think people are just nervous,” President Biden recently told Yahoo Finance in an exclusive interview. “And that’s why we’ve got to stay steady, stay on course, and keep creating these great jobs.”
Insights into this disconnect come from looking more deeply at the states, cities and towns that are the lifeblood of the U.S. economy. According to data from the Economic Innovation Group (EIG): Distressed Communities Index Fast forward to 2023 and we see that local economies across America still have not fully recovered from the impacts of the COVID-19 pandemic.
About 52 million Americans live in “distressed” ZIP codes, up from 50 million in 2018, according to EIG, which uses U.S. Census Bureau data to classify neighborhoods by economic status.
The hardship score is calculated based on weighting factors, including the number of residents with a high school diploma, the poverty rate, the number of adults not working, the housing vacancy rate, the median income ratio, the change in employment, and the change in the number of business establishments.
EIG found that urban areas across the country have become increasingly “distressed” in recent years, while their surrounding suburbs are considered more “prosperous.”
Take Cleveland, for example: “Almost every zip code in the city is in recession, but the suburbs are definitely thriving,” EIG research leader August Benzow told Yahoo Finance.
“The pandemic has exacerbated this trend.”
The health of a local economy generally correlates with the size of its population, and the pandemic has caused big shifts in population across the country.
EIG previously Defined Counties considered “urban with a population of 250,000 or more” have seen the largest population losses, with these counties losing a combined 812,000 residents between July 1, 2020 and July 1, 2021.
“Following a large influx of domestic migration early in the pandemic, suburban and exurban counties continued to grow the fastest in 2022,” according to the report. After gaining 931,000 people in 2021, those same counties added an additional 832,000 residents in 2022.
“Obviously, the pandemic has exacerbated this trend, allowing people to live farther away from cities and still work remotely or with a hybrid model,” Benzow said.
A recent note from Goldman Sachs reiterated this point: “Domestic migration is leaving big cities, with roughly half moving to metropolitan areas with populations between 250,000 and 1 million. … The latest figures show that this demographic shift that began at the beginning of the pandemic, driven by fears of the virus and remote work opportunities, has not only not reversed, but is in fact continuing through mid-2023.”
The pandemic has also highlighted huge wealth disparities among the population, as those who can afford to move from cities to the suburbs have done so, while lower-income urban residents have been left behind.
Let’s take a look at Fort Worth, Texas. Fort Worth is the 13th most populous city in the United States. saw An increase of 4.1% between 2020 and 2023 (approximately 1 million residents).
However, 32.2% of residents live in zip codes rated by EIG as “distressed,” while 29.2% live in zip codes rated as “thriving.” The city center is the most distressed area compared to the “comfortable” and “thriving” suburbs.
“People have a good quality of life; [where] “They have an opportunity,” Fort Worth Mayor Mattie Parker told Yahoo Finance, “and that’s why we’re seeing a lot of migration to places like Fort Worth across the country.”
At the same time, rising demand for housing is expected to drive the city’s median property value to $1.2 billion in 2020-2021. Increased That’s an 11.5% increase, worsening home-buying problems.
“Mixed-income and moderate-income housing is a challenge for a lot of cities, which means that often the focus is on low-income housing and there are a lot of tools and government partnerships to make that happen,” Parker said, “but often the largest housing sector is middle-income — first-year teachers, first-year firefighters, young families who can’t afford to live in the city because there’s no moderate-income housing.”
According to the Goldman report, “Stronger population growth in non-metropolitan areas has led to somewhat faster home price appreciation compared to pre-pandemic trends compared to metropolitan counties. Post-pandemic migration trends are likely linked to changing housing preferences, with more people in the survey saying they prefer larger, more spacious homes.”
read more: Why are home prices so high?
Oklahoma City also faces a complicated economic situation.
Thriving communities make up 36.3% of the city and surrounding areas, while distressed communities make up 26.4%, mainly in the urban core.
City Poverty Rate While 15% is still higher than the national average of 12.6%, the homeownership rate is more than 5% below the U.S. average.
“We certainly recognize the inequities in our community and we’re trying to do everything we can to at least address them,” Oklahoma City Mayor David Holt told Yahoo Finance.
Holt said: Capital Area Project The program has made significant investments in tourism in recent years, including the construction of an arena for the Oklahoma City Thunder. Estimation It is said to have created more than 3,000 jobs in the surrounding area and generated annual profits of approximately $590 million.
Holt stressed that the city is focusing on distressed areas and trying to provide more equal opportunities for residents.
“We’re not promising equal outcomes,” he said, “but if the outcomes continue to be unequal, then it’s clear that we’re not really providing equal opportunity.”
Adriana Belmonte is a reporter and editor covering politics and health policy for Yahoo Finance. You can follow her on Twitter. Adrian Bells Please contact me at adriana@yahoofinance.com.
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