The $100 Billion Wealth Migration Tilts US' Economy to the South
According to Bloomberg and the $100 Billion Wealth Migration Tilts US' Economy to the South article, the Southeast is currently experiencing a significant economic shift resulting in a wealth migration worth $100 billion. Additionally, the Southeast has emerged as a hub for job growth, accounting for two-thirds of all job growth since the beginning of 2020. In contrast, the Northeast has suffered losses totaling around $60 billion, as per data from the Internal Revenue Service.
This historic shift is reflected in the fact that, for the first time since the 1990s, a group of six southern states, including Florida, Texas, Georgia, the Carolinas, and Tennessee, now have a greater impact on the national GDP than the Northeast. This trend is significant as it indicates that Americans are spreading out both physically and economically.
During the peak of the COVID-19 pandemic, the Southeastern states mentioned earlier experienced a wealth migration of approximately $100 billion, while the Northeast saw a decline of around $60 billion. This shift shows no signs of reversing.
The shift in economic activity can be seen in the movement of people relocating to the sunbelt in pursuit of ideal weather and more room, a consequence of having gone through the tight quarters of places such as New York City during times of lockdown.
Bloomberg article chart
In the last two years, an estimated 2.2 million people have relocated to the southeastern United States, particularly to Florida. This is approximately the same as the population of Houston.
The southern states, by eliminating their restrictions quicker, were able to attract people from the north east who were anxious about the stringent virus regulations. Plus, South Florida and the Southeast economic system favors business growth and job opportunities.
Mark Vitner, an economic consultant for Piedmont Crescent Capital, pointed out to Bloomberg that any random dart thrown at a map of the South would hit an area that is rapidly growing.
The Southeast region accounts for two-thirds of all new job opportunities in the United States and is the location of 10 of the 15 cities experiencing the biggest growth.
The Bureau of Economic Analysis reported that the GDP for Florida rose by 3.5 percent in the preceding financial quarter.
Bloomberg article chart
In contrast to GDP, the Northeast saw a slower rate of growth with New York's GDP increasing by 1.3 percent and New Jersey's by a mere 1 percent.
Bloomberg article chart
