Will State Economics Swing the 2024 Election?

Battleground states in this year’s presidential race present a challenge for Kamala Harris and an opening for Donald Trump.

By Shawn Donnan Stuart Paul Nazmul Ahasan Christopher Cannon August 8, 2024

For all the turbulence that has shaken the US presidential contest this summer, voters have been consistent in saying the economy is their top election issue. But the economy that matters most isn’t national: It’s in the seven swing states poised to decide the race.

That group is home to 61 million people and had a combined gross domestic product in 2023 of $4.4 trillion, an output rivaling Germany’s. And it’s showing some economic cracks that could prove a political obstacle for Vice President Kamala Harris, who will have to answer to voters for the record of President Joe Biden’s administration.

In the so-called Blue Wall industrial states — Michigan, Pennsylvania and Wisconsin — where the political stakes are now highest, the combined growth from 2019 to the end of 2023 was just a third of that seen outside swing states, once you adjust for inflation and population increases.

In Arizona, which has enjoyed strong real GDP per capita growth, inflation and soaring housing costs hit household budgets hard, much as they have in Nevada and North Carolina. Georgia has benefited from new investments in electric vehicle plants, but it’s also seen its growth diluted by a swell of new residents.

Battleground Realities

Real GDP per capita change, 2019–2023

Those burdens help explain why Biden struggled to get his economic message to resonate in these critical states, even as the US unemployment rate sat near historic lows, inflation cooled, and the country’s recovery from the pandemic downturn became the envy of much of the world.

Democrats will court voters on a wide range of issues, including abortion and the future of US democracy, and Harris’ move to the top of the ticket has galvanized their base. But the mixed picture in swing states underscores a hard truth for the party: National data may point to a healthy US economy, but voters’ perceptions of it are heavily shaped by conditions on the ground where they live.

Watch: How Kamala Harris Is Recharging the Democratic Party

Most battleground states more acutely felt the recent surge in the cost of living. States like Pennsylvania and Wisconsin have lagged the nation in their recoveries from the 2020 recession.

All but one of the battlegrounds have seen slower annual real per capita growth since 2019 than they did in the two years prior, when Republican nominee Donald Trump was president.

Some of the swing-state counties that will decide the election have been among the slowest to recover from the pandemic downturn. In JD Vance, Trump chose a running mate meant to appeal to those places. Harris is aiming for a similar effect with her selection of folksy Minnesota Governor Tim Walz, whom she introduced to voters on a barnstorming tour of swing states this week. Yet while Harris will have to defend the long-term promise of Biden’s jobs and manufacturing agenda, Trump is selling a memory of a pre-pandemic economy in which life just felt easier.

And with some forecasters and investors worried about risks of a recession, voters might have fresh reason for economic frustration by Election Day.

Watch: How Swing State ‘Misery’ Will Decide the US Election

This comes into sharp relief when looking at swing states by county. Many local economies remained smaller at the end of 2022 than they were before the pandemic, according to the latest official county-level data available. That highlights how bumpy things were for many communities in the early aftermath of that economic shock.

The Slow Recovery in the Blue Wall

Erie County, Pennsylvania, is one place where it feels to many voters like the economy is standing still — or worse. Its inflation-adjusted GDP per capita was 3.2% smaller by the end of 2022 than it was in 2019, making its bounce back from the pandemic recession slower than in most parts of the US. And that could matter in November: Biden won the county by a mere 1,400 votes in 2020.

Partisan Growth Divide

Swing states’ real GDP per capita change, 2019–2022

Look around and you can see the attempts to jump-start growth. Local boosters point to $1.2 billion in new investment and a plan to revitalize the city of Erie’s downtown. A federally funded boulevard is being built along the Lake Erie waterfront. There is a new climbing wall and a food hall downtown. Local microbreweries have been expanding. Plans are afoot to turn a landmark building into a boutique hotel.

But economic development is a long-term game that doesn’t always align with the political calendar. That’s a problem for Democrats, who increasingly see the Blue Wall states as those most essential to their bid to keep the presidency.

Erie County, PA

Population change, 2019–2022

–1.0%

Unemployment rate, June 2024

3.9%

Real GDP per capita change, 2019–2022

–3.2%

Median household income, 2022

$59,396

2020 Presidential election results

Biden: +1.0 p.p.

Erie’s economic malaise is not uncommon in Pennsylvania. In that state, 40% of the population lives in a county that had not recovered to its pre-pandemic GDP by the end of 2022. Nationwide, that was true for only a fifth of the population.

In Pennsylvania and other swing states, many of those moribund places are solid Trump country. The data, then, suggest it’s not just political polarization that is fueling voters’ sour economic outlook under the Biden administration: It’s their own experiences.

That will make it hard for Harris to peel away votes from Trump in those reliably Republican areas — even if local officials say federal pandemic and infrastructure spending have brought some relief.

Uneven Recovery

Percent of population living in a county where GDP per capita declined, 2019–2022

“The Biden administration has given us the cash to do what we need to do, but I just don’t see the Biden administration getting full credit for it,” says Brenton Davis, who in 2021 became the first Republican to be elected county executive in almost two decades.

Voters in Erie don’t offer an especially upbeat view of the economy’s recent trajectory.

The region was waging a decades-long battle with deindustrialization and its after-effects long before the pandemic. The county’s population has declined nearly every year since 2012, and over that time the area has lost more than 10% of its factory jobs.

At least so far the manufacturing renaissance that the Biden administration has been so fond of touting — and that Harris could claim some credit for — hasn’t turned up in Erie.

The Housing Squeeze in the Sun Belt

Different Paths

Population percent change

Washoe County, Nevada, has become a magnet for the 21st-century industrial jobs that the Biden administration has worked hard to create and keep in the US. It has drawn more than 76,000 new residents since 2010 as the Reno area has transformed itself from a casino hub to a regional logistics and advanced manufacturing powerhouse that is home to major facilities for companies like Tesla Inc. and Walmart Inc.

Different Paths

Population percent change

But that runaway growth has unwelcome consequences: The influx of well-paid workers has put intense pressure on the local housing market, leaving many voters boxed out of homeownership and facing soaring rents.

In 2019, a typical household in Nevada could expect to spend almost 20% of its income on mortgage payments if they purchased a median-priced home. That rose to almost 37% in 2023, according to calculations by Bloomberg Economics.

Washoe County, NV

Population change, 2019–2022

+3.2%

Unemployment rate, June 2024

5.0%

Real GDP per capita change, 2019–2022

+8.3%

Median household income, 2022

$81,531

2020 Presidential election results

Biden: +4.5 p.p.

Housing affordability is a national issue. In June the median sales price of an existing home reached a record $426,900 even with mortgage costs near two-decade highs. But in Nevada it’s become a dominant concern in races up and down the ballot.

In a visit to the state in March — before he handed the baton to Harris — Biden brandished a proposal to give tax breaks to new homebuyers as Republican Governor Joe Lombardo called for the president to release more federal land for new homes. Senator Jacky Rosen, the Nevada Democrat facing a tough reelection campaign this year, is pushing a bill to do just that for Washoe County.

To many in the region, those feel like slow-moving solutions to an immediate need.

Some options for short-term relief are cropping up, but their reach is limited. Greater Nevada Mortgage, a local lender, has offered $50,000 down payment grants to first-time homebuyers with 80%-120% of the area’s median income and $10,000 of their own to contribute. According to James Anderson, Greater Nevada’s president, within days of launching the program, the lender had more than 250 applications for the 40 or so grants it can deliver this year.

Local officials and residents alike have seen the impact of the housing squeeze.

To Taylor Adams, president and chief executive officer of the Economic Development Authority of Western Nevada, the housing strain is just one symptom of the burden that high interest rates — and the extended wait for the Federal Reserve to start cutting them — are placing on the local economy. The increased cost of capital has put new industrial projects in the Reno area on hold, he says. Higher mortgage costs also are affecting decisions to relocate by potential new workers.

“We are certainly feeling the effects of higher for longer,” Adams says.

The housing crisis in Reno is just one part of a “silent tidal wave” that has hit many of the city’s residents alongside the rapid growth, says Marie Baxter, who runs Catholic Charities of Northern Nevada. The young Californians moving in for jobs at Tesla and other new industrial superstars in the area caused rents to skyrocket, leaving even people making $20–$25 per hour in warehouse jobs struggling to make ends meet.

“I’m still seeing 100 people a day walking through the door of Catholic Charities, the majority of whom are going to get evicted or lose their housing for a variety of reasons. And mostly it’s because their rents are going up,” Baxter says, adding that many of them are employed and working hard. “We’re talking about people who are absolutely doing everything right.”

Sandra Salas, who makes $22 per hour doing maintenance for a Reno property company, turned to Catholic Charities for help making rent after a hernia operation sidelined her for a time and left her with $6,000 in medical debt. The help staved off an immediate crisis. But Salas says she is still on tenuous economic footing.

“It’s just gotten to the point that it scares me. I don’t want to take time off because I’m running the risk of losing my home,” Salas says. “My income looks good, but as a single mother it’s not livable.”

Give Me Shelter

Percent of a state’s median household income spent on mortgage payment for median-value home

When a Bigger Pie Meets More People

Few places in the US are bursting with new residents quite like Atlanta and its suburbs, which have added more than 200,000 people since 2020.

The trouble is: That huge inflow of people is making its economic growth more diffuse. Georgia’s nominal GDP has grown almost 25% since 2019, but in real per capita terms its economy has grown by just 2.5% in that time, the Bloomberg analysis found.

Inflation plays a role in that. According to a measure devised by Bloomberg Economics to capture the cumulative effect of price increases, Georgia is one of five swing states whose residents have experienced worse inflation than the country overall. The Misery 2.0 Index combines price rises over four-year periods with the unemployment rate in each state. It builds on what’s known as the Misery Index, a measure used for decades by economists to track consumer distress.

Battleground Blues

Bloomberg Economics’ Misery 2.0 Index

Jackson County, Georgia, sits on metro Atlanta’s eastern exurban fringe, and was one of the fastest-growing counties in the US from 2019 to 2022. The growth has been fueled by new industrial investments like SK Battery America’s manufacturing facilities, which employ around 3,000 people to make batteries for Ford and Volkswagen.

And while its per capita economic growth is stronger than in the state overall, Jackson County is a case study for how even in pockets of swing states that are booming, voters are beginning to focus on the downsides of breakneck growth.

Local officials have started hitting the brakes on new developments and are casting a more skeptical eye on companies promising big new investments. Their view is informed by what they are seeing all around them in the Atlanta suburbs — gridlocked traffic, surging home prices and the changing politics that come with an influx of new residents — and questions about who really benefits when new companies come to town.

Jim Shaw, a former banker who heads the county’s chamber of commerce, which also operates as the local economic development agency, worries about the capacity of everything from the county’s schools to its water resources. He also has started to question the logic of drawing new employers.

“I don’t know how many more jobs we need to create when you have to start importing people into your community to fill the jobs that you created to help the people that were already there,” says Shaw. “I think we may be chasing our tails a little bit.”

Jackson County, GA

Population change, 2019–2022

+14.4%

Unemployment rate, June 2024

2.8%

Real GDP per capita change, 2019–2022

+15.9%

Median household income, 2022

$82,056

2020 Presidential election results

Trump: +58.0 p.p.

Jackson County is likely to vote heavily for Trump in November’s election, as it did in 2020. Pete Fuller, who chairs the local Democratic Party, says he expects it to grow more competitive in future elections, as newcomers to the region spill into Jackson from blue-leaning Gwinnett and Clarke counties.

In the meantime, though, Fuller has noted a disconnect: In a county that might easily be an advertisement for the benefits of Bidenomics as it reaps the rewards of green energy investment and a manufacturing revival, people continue to grumble.

“Businesses are opening all over the place right now,” Fuller says. “People are spending money like crazy. But all you hear is: ‘The economy’s so bad that we’re in a recession.’”