State Economic Watch

Pennsylvania Governor Josh Shapiro yesterday announced a “$371.5 million investment of capital funding from the Commonwealth” in the Port of Philadelphia. According to the press release from the Governor’s office, the state’s investment will unlock “over $200 million in private-sector investment and $266 million from the federal government” and will “support the largest expansion in its history, allowing the port to significantly expand its capacity and create more than 6,000 jobs”.

The Summer 2026 Alaska Fuel Price Report from the Alaska Division of Community and Regional Affairs puts the average price of gasoline in rural Alaska at $7.56 a gallon and the average price of home heating oil at $7.97 a gallon. The figures in the report are based on a survey of 100 communities taken between July 15, 2026 and August 24, 2026. The report notes that “with the $7.97 average in the 90 surveyed, unsubsidized communities and the $5.54 national average, the statewide average in Summer 2026 is 44 percent higher than the national average”. While the figures quoted in the report are somewhat dated, it does make clear that, due to transportation challenges and other issues specific to rural Alaska, the state’s rural communities pay a significant premium for fuel compared to the Lower 48. 

Business leaders in Tennessee are more optimistic about their home state’s economy than that of the nation, according to the latest survey from the Boyd Center for Business and Economic Research. In its Tennessee Business Leaders Survey Summer 2026 Report, the Center, part of the Haslam College of Business at the University of Tennessee, Knoxville, reported that 57% of respondents to its August 2026 Survey expect the state's economy to improve over the next 12 months, while only 33% said the same about the US economy. Additionally, almost 64% of respondents thought the state was on the “right track”. About 30% expect to increase employment over the next 12 months, while almost 55% expect employment levels to "stay about the same”. Finally, about 35% expect their respective companies to increase capex expenses in the coming year, while 45% said their capex spend will remain at current levels. 

A new report from the Washington Policy Center and the Buckeye Institute concludes that “Washington's 9.9% income tax on earnings above $1 million (Senate Bill 6346) would bring in money for the state but leave Washington with fewer jobs, less economic growth, and less business investment than it would have had without the tax”. It notes that “establishing a new income tax risks future legislatures raising the initial tax rate and inevitably levying the tax on ever-lower income thresholds” and that “although the tax generates additional state revenue, economic activity weakens, with output, employment, consumption, and investment falling below their respective baselines”.

German pharma company Bayer has announced that it will build a new pharmaceutical manufacturing plant in New Albany, Ohio. According to a press release from the office of Ohio Governor Mike DeWine, the company will invest $2.2 billion in the project, which "is expected to create around 600 high-value jobs in the New Albany International Business Park and roughly 1,500 construction jobs during the facility’s construction”.

  A presentation deck released today by the Federal Reserve Bank of New York’s Director of Research contains the below exhibit on New York State employment growth. The exhibit illustrates the three month average y/y employment growth  for the state by sector, and provides graphic evidence of what most people intuitively believe - it’s been all about healthcare. Apart from some modest gains in government, financial services and business services, the majority of the y/y payroll growth in New York State over the past year has come from healthcare. As the exhibit illustrates, leisure and hospitality has been the worst performing employment sector over this period. The below exhibit is reproduced from the New York Fed’s presentation deck.