As economists around the world try to make sense of the coronavirus pandemic's growth-destroying capacity, a team at Bankrate.com has devised a simple measure of 'economic hardship' to measure how much the outbreak in the US has harmed each state. BR's index comprises measures of unemployment and mortgage delinquencies (two critical signs of personal financial peril) to judge how the people of every state have fared since the outbreak began.
One interesting conclusion from the survey was the lack of correlation between COVID-19 cases and overall economic impact. New York will fare reasonably well in the coming months (though certainly industries like food service and hospitality may suffer), but the tourism-dependent economies of Hawaii and Nevada have been hit hard by the implosion of the tourism industry.
"States experiencing high unemployment will see mortgage delinquencies surge if unemployment remains elevated as forbearance periods expire," says Greg McBride, CFA, Bankrate chief financial analyst. "This year may see the worst for unemployment, but 2021 will likely bring the worst for mortgage delinquencies and defaults."
As China ups its orders of certain farm products, the long-suffering American farmers, who have struggled with low commodity prices, are seeing surprising resilience in unemployment and mortgage defaults. Nebraska had the best showing in BR's Housing Hardship Index, and Idaho has performed well. Neither saw their unemployment rate crack double-digit territory last month or today.