How Would America Look without the Coasts? Wide Geographic Disparities in the New Policy Paradigm

Bridgewater

Melissa Saphier, Karen Karniol-Tambour

Article

1 Pages

Bridgewater Associates explores how widening geographic labor market disparities may influence monetary and fiscal policy. Four coastal cities representing 14% of the labor force entered COVID with stronger employment and inflation, while much of America remained weaker, supporting greater policy tolerance for inflation.Four coastal cities representing 14% of the labor force entered COVID with stronger employment and inflation, while much of America remained weaker, supporting greater policy tolerance for inflation.

Key Takeaways

Coastal Strength Diverges: New York, Los Angeles, San Francisco, and Boston represent roughly 14% of the US labor force and had historically high employment before COVID.
Regional Gaps Persist: Bridgewater analyzes roughly 380 metro areas covering 87% of the US labor force, finding stronger labor markets generally concentrated in larger cities.
Top Metros Outpace: The strongest 95 metro areas represent about 40% of the US labor force and experienced inflation roughly 30 basis points above everywhere else before COVID.
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