“Promises Made! Promises Kept?” Links between Trump’s Economic Policy and County Level Unemployment Rates – The Property Chronicle
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“Promises Made! Promises Kept?” Links between Trump’s Economic Policy and County Level Unemployment Rates

The Analyst

In the 34 months since November of 2016 the U.S. unemployment rate has declined -1.2% through August 2019. Across the counties that President Trump campaigned in, the average decline has been roughly -1% (through July 2019). 

In Pennsylvania, county level unemployment rates have declined an average of -1.5%; in Texas the decline has been -1.9%; Alabama a whopping -3.1%; and in coal loving West Virginia -1.1%.

Major Trump policies fall under the mantra “America First”. The goals of this approach entail – among other things – domestic energy independence, the adoption of “fair-trade” tariffs, and a reduction in the flow of illegal aliens. The policies effectiveness or lack thereof can be partially assessed by county level variation in labor market outcomes. President Trump has tended to focus most on the unemployment rate in his “Thank you Tour” and “2020 Campaign” rallies, so that is what I’ve chosen to focus on.   

Effects of Energy Policy

Domestic field production of crude oil has increased 29% from November 2016 through July of 2019. Counties reliant on oil production have seen their unemployment rates decline an average of -1.5% versus an average decline of -1% for non-oil producing counties. Coal production has declined -16.5% since Trump took office. In-spite of this the average decline in unemployment rates for counties with coal mines has been -1.8% versus -1% for counties without coal mines. This suggests to me that while coal miners might leave Trump in 2020, their neighbors will stand by his side. 

What about the Farmers? 

Since Election Day, agricultural exports have fallen -5.2%. The decline in the unemployment rate for counties weighted by 2017 corn production has been a modest -0.6%, this is roughly half the decline of -1.25% experienced by non-corn producing counties. The same calculation for wheat heavy counties produced an even lower weighted decline of -0.47%. Farmers have clearly not meaningfully benefited from Trump era trade policy.   

Intrastate Differences 

Intrastate declines are even more telling, especially in Pennsylvania and the border regions of Texas. West Pennsylvania has seen the bulk of the improvement for the state as a whole. If this continues, I foresee Trump Pennsylvanians chanting, “Promises Made! Promises Kept!”, into 2020.

Texas: The Big Oil Laboratory

Texas counties closest to the boarder have seen some of the largest unemployment rate declines in the state. The figure below shows the counties with the largest declines in the unemployment rate. Presidio County, a prominent boarder county, has seen its unemployment rate fall -4.7% since Trump’s election. Oil producing counties like Zavala County have seen unemployment rates decline even further (in this case -7.6%). The unemployment rate has declined (on average) -2.2% in oil producing counties across the state. The average decline in non-oil producing counties has been -1.7%.

The Analyst

About Steven Sabol

Steven is Founder and Chief-Executive Officer at Capital Markets Data, a firm passionate about the collection and dissemination of long-term economic data. Steven's website is capitalmarketsdata.com, and he Tweets at @capitalmarketz.

Articles by Steven Sabol

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