Mapped: America’s $2 Trillion Economic Drop
It only took a handful of months for the U.S. economy to reel from COVID-19’s effects.
As unemployment rates hit all-time highs and businesses scrambled to stay afloat, new data shows that current dollar GDP plummeted from nearly $21.6 trillion down to $19.5 trillion between Q1’2020 and Q2’2020 (seasonally adjusted at annual rates).
While all states experienced a decline, the effects were not distributed equally across the nation. This visualization takes a look at the latest data from the Bureau of Economic Analysis, uncovering the biggest declines across states, and which industries were most affected by COVID-19 related closures and uncertainty.
Change in GDP by State and Industry
Between March-June 2020, stay-at-home orders resulted in disruptions to consumer activity, health, and the broader economy, causing U.S. GDP to fall by 31.4% from numbers posted in Q1.
The U.S. economy is the sum of its parts, with each state contributing to the total output—making the COVID-19 decline even more evident when state-by-state change in GDP is taken into consideration.
|State||Real GDP Change||Biggest Industry Decline||Industry Change
|Alabama||-29.6||Durable Goods Manufacturing||-5.02|
|Alaska||-33.8||Transport and Warehousing||-9.43|
|Arizona||-25.3||Accommodation and Food Services||-4.2|
|Arkansas||-27.9||Health Care and Social Assistance||-4.57|
|California||-31.5||Accommodation and Food Services||-4.43|
|Colorado||-28.1||Accommodation and Food Services||-3.85|
|Connecticut||-31.1||Health Care and Social Assistance||-4.61|
|Delaware||-21.9||Health Care and Social Assistance||-4.19|
|Florida||-30.1||Accommodation and Food Services||-5.3|
|Georgia||-27.7||Accommodation and Food Services||-3.43|
|Hawaii||-42.2||Accommodation and Food Services||-18.85|
|Idaho||-32.4||Health Care and Social Assistance||-4.49|
|Illinois||-29.7||Accommodation and Food Services||-4.11|
|Indiana||-33.0||Durable Goods Manufacturing||-6.74|
|Iowa||-28.2||Durable Goods Manufacturing||-4.35|
|Kansas||-30.3||Durable Goods Manufacturing||-4.42|
|Kentucky||-34.5||Durable Goods Manufacturing||-5.41|
|Louisiana||-31.4||Accommodation and Food Services||-4.72|
|Maine||-34.4||Accommodation and Food Services||-7.09|
|Maryland||-27.7||Health Care and Social Assistance||-4.18|
|Massachusetts||-31.6||Health Care and Social Assistance||-4.73|
|Michigan||-37.6||Durable Goods Manufacturing||-7.57|
|Minnesota||-31.3||Health Care and Social Assistance||-4.55|
|Mississippi||-32.9||Health Care and Social Assistance||-4.56|
|Missouri||-32.1||Health Care and Social Assistance||-4.29|
|Montana||-30.8||Health Care and Social Assistance||-5.67|
|Nebraska||-31.0||Transport and Warehousing||-6.13|
|Nevada||-42.2||Accommodation and Food Services||-15.62|
|New Hampshire||-36.9||Accommodation and Food Services||-6.7|
|New Jersey||-35.6||Health Care and Social Assistance||-5.33|
|New Mexico||-28.3||Mining, Quarrying, and Oil and Gas Extraction||-4.4|
|New York||-36.3||Accommodation and Food Services||-5.97|
|North Carolina||-30.5||Accommodation and Food Services||-4.67|
|North Dakota||-27.6||Transport and Warehousing||-4.94|
|Ohio||-33.0||Durable Goods Manufacturing||-4.92|
|Oklahoma||-31.1||Transport and Warehousing||-6.22|
|Oregon||-31.9||Accommodation and Food Services||-5.81|
|Pennsylvania||-34.0||Health Care and Social Assistance||-5.07|
|Rhode Island||-32.4||Health Care and Social Assistance||-5.73|
|South Carolina||-32.6||Accommodation and Food Services||-6.16|
|South Dakota||-28.8||Health Care and Social Assistance||-5.44|
|Tennessee||-40.4||Health Care and Social Assistance||-6.25|
|Texas||-29.0||Health Care and Social Assistance||-3.13|
|Utah||-22.4||Transport and Warehousing||-3.12|
|Vermont||-38.2||Accommodation and Food Services||-8.52|
|Virginia||-27.0||Health Care and Social Assistance||-3.59|
|Washington||-25.5||Accommodation and Food Services||-4.39|
|West Virginia||-29.6||Health Care and Social Assistance||-5.48|
|Wisconsin||-32.6||Durable Goods Manufacturing||-5.17|
|Wyoming||-32.5||Transport and Warehousing||-7.38|
|🇺🇸 U.S.||-31.4||Accommodation and Food Services||-4.38|
Note: Industry changes are reported in percentage points (p.p.) of total current dollar GDP between Q1 and Q2.
A total of 18 states took the biggest hit within the Accommodation & Food Services sector, which was also the industry that suffered the most nationally, dropping by 4.38%.
Highly dependent on tourism, Hawaii bore the brunt of decline in this industry with a 18.85% drop. According to The Economic Research Organization at the University of Hawaii (UHERO), a second wave of infections and expired financial assistance were behind this contraction.
Next, the Health Care & Social Assistance sector was most impacted in 17 states between the two quarters, falling the most in Tennessee (-6.25%).
The most resilient industry amid the pandemic was Financial Services. In the state of Delaware, home to major banks such as JPMorgan Chase and Capital One, the sector actually grew by 4.47%. However, Delaware’s GDP ultimately still fell due to contractions in other sectors.
Each Industry’s Worst Performing State
Looking at it another way, the worst-performing state by industry also becomes clear when the change in percentage points (p.p.) Q1’–Q2’2020 GDP contributions are measured. Of the 21 industries profiled, Nevada shows up in the lower end of the spectrum four times.
|Industry||Worst-performing state||Change (p.p.)|
|Agriculture, forestry, fishing and hunting||Nebraska||-4.99%|
|Mining, quarrying, and oil and gas extraction||Wyoming||-5.76%|
|Durable goods manufacturing||Michigan||-7.57%|
|Nondurable goods manufacturing||Indiana||-2.65%|
|Wholesale trade||New Jersey||-3.35%|
|Transportation and warehousing||Alaska||-9.43%|
|Finance and insurance||South Dakota||-1.53%|
|Real estate and rental and leasing||Florida||-2.00%|
|Professional, scientific, and technical services||District of Columbia||-4.46%|
|Management of companies and enterprises||Nevada||-0.38%|
|Administrative/ support /waste management / remediation||Nevada||-2.48%|
|Educational services||Rhode Island||-1.47%|
|Health care and social assistance||Tennessee||-6.25%|
|Arts, entertainment, and recreation||Nevada||-4.44%|
|Accommodation and food services||Hawaii||-18.85%|
|Other services (ex. govt)||District of Columbia||-2.40%|
|Government and government enterprises||Alaska||-4.19%|
With many U.S. business leaders expecting a second contraction to occur in the economy, will future figures reflect further declines, or will states manage to bounce back?
Visualizing the Recent Explosion in Lumber Prices
Lumber prices in the U.S. continue to break records as pressure from both the supply and demand sides of the market collide.
Visualizing the Recent Explosion in Lumber Prices
Lumber is an important commodity used in construction, and refers to wood that has been processed into beams or planks.
Fluctuations in its price, which is typically quoted in USD/1,000 board feet (bd ft), can significantly affect the housing industry and in turn, influence the broader U.S. economy.
To understand the impact that lumber prices can have, we’ve visualized the number of homes that can be built with $50,000 worth of lumber, one year apart.
A Story of Supply and Demand
Before discussing the infographic above, it’s important to understand the market’s current environment.
In just one year, the price of lumber has increased 377%—reaching a record high of $1,635 per 1,000 bd ft. For context, lumber has historically fluctuated between $200 to $400.
To understand what’s driving lumber prices to new heights, let’s look at two economic elements: supply and demand.
U.S. lumber supplies came under pressure in April 2017, when the Trump administration raised tariffs on Canadian lumber. Since then, lumber imports have fallen and prices have experienced significant volatility.
After a brief stint above $600 in April 2018, lumber quickly tumbled down to sub $250 levels, causing a number of sawmills to shut down. The resulting decreases in production capacity (supply) were estimated to be around 3 billion board feet.
Once COVID-19 emerged, labor shortages cut production even further, making the lumber market incredibly sensitive to demand shocks. The U.S. government has since reduced its tariffs on Canadian lumber, but these measures appear to be an example of too little, too late.
Against expectations, COVID-19 has led to a significant boom in housing markets, greatly increasing the need for lumber.
Lockdowns in early 2020 delayed many home purchases until later in the year, while increased savings rates during the pandemic meant Americans had more cash on hand. The demand for homes was further amplified by record-low mortgage rates across the country.
Existing homeowners needed lumber too, as many Americans suddenly found themselves requiring upgrades and renovations to accommodate their new stay-at-home lifestyles.
How Many Homes Can You Build With $50K of Lumber?
To see how burgeoning lumber prices are impacting the U.S. housing market, we’ve calculated the number of single family homes that could be built with $50,000 worth of lumber. First, we established the following parameters:
- Lumber requirements: 6.3 board feet (bd ft) per square foot (sq ft)
- Median single family house size: 2,301 sq ft
- Total lumber required per single family house: 14,496 bd ft
Based on these parameters, here’s how many single family homes can be built with $50,000 worth of lumber:
|Date*||Lumber Price||Total Lumber Purchased||Total Homes Built|
|2021-05-05||$1,635 per 1,000 bd ft||30,581 bd ft||2.11|
|2020-05-04||$343 per 1,000 bd ft||145,773 bd ft||10.05|
|2015-05-01||$234 per 1,000 bd ft||213,675 bd ft||14.74|
|2010-05-01||$270 per 1,000 bd ft||185,185 bd ft||12.77|
*Exact matching dates were not available for past years.
As lumber prices continue to set record highs, the National Association of Home Builders (NAHB) has reported that the cost to build a single family home has increased by $36,000. Most of this cost can be passed down to the consumer, but extremely tight supplies mean homebuilders are unable to start more projects.
The Clock is Ticking
Despite their best efforts to increase output, it’s likely that sawmills across the U.S. will continue playing catch-up in 2021.
“There was a great fear among sawmills to prepare for a downturn. When home buying surged, they could not open up capacity quickly enough.”
– Lawrence Yun, National Association of Realtors
Analysts are now warning that lumber prices could reach a flashpoint, where affordability becomes so limited that demand suddenly falls off. This has led the NAHB to ask the Biden administration for a temporary pause on Canadian lumber tariffs, which currently sit at 9%.
U.S. tariffs on Canadian lumber were first introduced in 1982, and represent one of the longest lasting trade wars between the two nations. The U.S. is currently appealing a World Trade Organization (WTO) ruling that states its 2017 tariff hike was a breach of global trading rules.
Mapped: The State of Small Business Recovery in America
Compared to January 2020, 34% of small businesses are currently closed. This map looks at the small business recovery rate in 50 metro areas.
Mapped: The State of Small Business Recovery in America
In the business news cycle, headlines are often dominated by large corporations, macroeconomic news, or government action.
While mom and pop might not always be in focus, collectively small businesses are a powerful and influential piece of the economy. In fact, 99.9% of all businesses in the U.S. qualify as small businesses, collectively employing almost half (47.3%) of the nation’s private workforce.
Unfortunately, they’ve also been one of the hardest-hit sectors of the economy amid the pandemic. From the CARES Act to the new budget proposal, billions of dollars have been allocated towards helping small businesses to get back on their feet.
Small Business Recovery in 50 Metro Areas
During the pandemic, many small businesses have either swiftly pivoted to survive, or struggled to stay afloat. This map pulls data from Opportunity Insights to examine the small business recovery rate in 50 metro areas across America.
So, has the situation improved since the last time we examined this data? The short answer is no—on a national scale, 34% of small businesses are closed compared to January 2020.
San Francisco is one of the most affected metro areas, with a 48% closure rate of small businesses. New York City has spiralled the most since the end of September 2020.
|U.S. Metro Area||% Change in # of|
Small Businesses Open
(As of Sep 25, 2020)
|% Change in # of|
Small Businesses Open
(As of Apr 23, 2021)
|7-month change (p.p.)|
|New York City||-21%||-42%||-21|
|Salt Lake City||-18%||-23%||-5|
Data as of Apr 23, 2021 and indexed to Jan 4-31, 2020.
On the flip side, Honolulu has seen the most improvement. As travel and tourism numbers into Hawaii have steadily risen up with lifted nationwide restrictions, there has been a 16 p.p. increase in open businesses compared to September 2020.
Road to a K-Shaped Recovery
As of April 25, 2021, nearly 42% of the U.S. population has received at least one dose of a COVID-19 vaccine. However, even with this rapid vaccine rollout, various segments of the economy aren’t recovering at the same pace.
Take for instance the stark difference between professional services and the leisure and hospitality sector. Though small business revenues in both segments have yet to return to pre-pandemic levels, the latter has much more catching up to do:
This uneven phenomena is known as a K-shaped recovery, where some industries see more improvement compared to others that stagnate in the aftermath of a recession.
The Entrepreneurial Spirit Endures
Despite these continued hardships, it appears that many Americans have not been deterred from starting their own businesses.
Many small businesses require an Employer Identification Number (EIN) which makes EIN applications a good proxy for business formation activity. Despite an initial dip in the early months of the pandemic, there has been a dramatic spike in EIN business applications.
Even in the face of a global pandemic, the perseverance of such metrics prove that the innovative American spirit is unwavering, and spells better days to come for small business recovery.
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