Trump counties may be winning a bit more, but their prognosis remains dim

General Motors production workers Dina Mays and Joseph Stanton work on the 10-speed transmission assembly at the General Motors (GM) Powertrain Transmission plant in Toledo, Ohio, U.S. March 6, 2019. Picture taken March 6, 2019.  REUTERS/Rebecca Cook - RC18171696D0

As the 2020 conversations ramp up, the “red and blue” economic growth patterns in the U.S. continue to be an enormous focal point. Now, as new data comes out on the years 2017 to 2018 and the president crows, it’s clear that counties that voted for President Trump have been “winning” a little—or at least winning a little more than they were.

Specifically, the geography of growth has changed somewhat—at least for the moment: Counties that voted for Donald Trump are seeing a bit faster employment growth than they were in the Obama years and are now adding jobs a little faster than are counties that voted for Hillary Clinton.

From 2010 to 2017, counties that voted for Clinton added jobs at a rate of 1.7 percent annually, compared to the 1.5 percent growth rate in Trump-voting areas. But in 2017 and 2018, the pattern looks different.

Figure 1

From January 2017 to September 2018, both Clinton and Trump counties saw an uptick in job creation. However, the increase was significantly larger in Trump counties where the annualized rate of growth increased from 1.5 percent to 2.6 percent a year.

Given that, the locus of growth really is a little different than it was in the lead-up to the 2016 election. As before, the 490 counties that voted for Clinton continue to massively predominate in the sheer volume and productivity of their economic activity. Together they accounted for two-thirds of the nation’s employment growth and three-quarters of its GDP growth. But during the first 21 months of the Trump administration, as people and jobs once again begin to spread out and sprawl, job growth rates in the 2,622 Trump-voting counties have gone from lagging behind those in Clinton counties to outpacing them. Redder, smaller, more exurban, and rural counties really are ‘winning’ a little more—at least for now.

What’s going on here? It’s pretty clear that the modest, probably temporary, gains of red counties likely have little to do with Trump-era policies and much to do with familiar cyclical and sectoral economic patterns.

Remote, less-densely settled Trump counties rely inordinately on “traditional” agriculture, manufacturing, energy, transportation, and construction sectors—but it’s hard to discern major Trump administration policy changes that would have “goosed” those industries. President Trump’s impact on trade rules, for example, or energy policy, have been minimal thus far—more noisy and contradictory than consequential. For its part, the tax cut of 2017 provided a short-term “sugar high,” but without any particular geographical focus.

Far more important, by contrast, is the fact that the Trump-country economy—reliant on those traditional industries—is highly cyclical. Manufacturing, energy, construction, transportation and warehousing are all volatile and highly dependent on national or global business cycles—and all are experiencing their fastest employment growth of the decade in the Trump years.

Table 1

That means that these industries bore the brunt of the recent Great Recession, and are at last moving beyond the downturn and catching up somewhat. As such, the current trend reflects something of a reversion to the normal long-term dynamics of the economy, as notes my colleague William Frey. Writing especially about population movements and growth, Frey comments “that the steady improvement in the economy and the housing market in more places, along with changing residential preferences, may be prompting employers and job-seekers to take a new look at areas that were growing before the Great Recession.”

Yet, we might still question how durable and deep-going the current employment uptick in Trump counties will prove to be. Many of the industries like mining, oil and gas, and construction that are adding jobs in red counties will be the first to be hit by any forthcoming recession, as we have noted before. The global slump in farm prices is expected to continue. Equally daunting, the types of physical and “routine” jobs prevalent in rural and small-town America make red counties especially exposed to automation and globalization in a digital era that has tilted the locus of long-term growth trends toward the biggest, densest cities with their high education levels and powerful “agglomeration” economies.

And don’t forget: The present uptick in employment growth in more peripheral counties does not change the fact that output per worker in Clinton counties remains 30 percent higher than in Trump counties, which as we showed at the beginning of the Trump presidency, is one of the most important measures of economic value-creation and prosperity.

Against this backdrop, the recent acceleration in Trump counties may prompt some excessive crowing from the president but it likely won’t translate into a long-term reversal of fortunes.