Covid-19-related lockdown measures have not been renewed in the U.S. recently and GDP growth has been in recovery mode. Yet, the effect of the pandemic on the U.S. economy is still lingering on elsewhere. As of December, only six states had reached pre-pandemic levels of employment. All six - Utah, Idaho, Texas, Montana, Georgia and Arizona - have retained population growth during the pandemic, however, in part explaining their quick recovery. According to The Wall Street Journal, lower cost of living and fewer coronavirus restrictions attracted companies and workers alike.
According to the report, only a third of all U.S. states is projected to reach pre-pandemic payroll numbers by mid-2022. A look at nonfarm payrolls published by the St. Louis Fed shows that these could be more states in the United States’ West, Midwest and South, which have the ability to attract employers and employees with the promise of a cheaper and less regulated environment.
According to Census data from mid-2021, population growth during the pandemic also continued in South Dakota, Florida and the Carolinas, among others. These states were also coming within reach of closing the Covid-19 employment gap in December. The only growing states with a persisting Covid-19 employment gap were Maine, New Hampshire, Oklahoma and Nevada.
States with a bigger gap to pre-pandemic employment were more likely to be located in the Northeast and Great Lakes regions, while California and Hawaii – both states suffering high population loss – were also among them. Hawaii, where the blow Covid-19 dealt to tourism was acutely felt, as of December still had the biggest employment gap opposite February 2020. Nonfarm payrolls numbers were 12 percent lower. Next up was New York, where a 7 percent gap persisted, followed by 6 percent gaps in Alaska, Louisiana and Vermont. For the U.S. overall, the Covid-19 employment gap stood at -2.3 percent in December.
