Solutions Economic and Market Watch

Join Antony Davies, director of economic research at CFC, as he explains how conditions in each state are affecting population size and potential economic growth.
 
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Creators and Guests

Host
Antony Davies
Antony Davies is director of economic research at CFC. Visit his full bio at https://www.nrucfc.coop/content/solutions/en/author/antony-davies.html for more.

What is Solutions Economic and Market Watch?

Listen to the latest economic insights from CFC experts John Suter, Sam Kem, and Antony Davies.

Antony Davies:

Welcome to the Economic and Market Watch podcast for the week of June 08, 2026. This is Antony Davies.

Antony Davies:

The Bureau of Economic Analysis recently released another tepid update to economic growth figures. Earlier, the BEA had estimated that the US economy grew at a 2% annual rate in the first quarter. It is now revised that already moderate number down to a lackluster 1.6%.

Antony Davies:

As the unpleasantness of the early 2020s recedes, the economy appears to be settling into a new normal of cooler growth and hotter inflation. Tariffs and wars are temporary contributors, but persistent inflation pressure comes courtesy of federal deficits. The more the government borrows, the more upward pressure it puts on real interest rates. That annoys borrowers. But the more the Federal Reserve tries to push interest rates back down, the more upward pressure it puts on inflation, and that annoys consumers.

Antony Davies:

The deficit is a long term threat that arises from what we do. Another population stagnation arises from what we don't.

Antony Davies:

Americans are barely having enough babies to replace older generations. Recent border restrictions aside, today we tend to make more new Americans via immigration than we do the old fashioned way, and slower population growth contributes to slower economic growth.

Antony Davies:

People matter because people are the ultimate resource. They invent things that didn't exist and discover things that were unknown.

Antony Davies:

Our progression from human muscle to domesticated animals to machines computers to AI is due to humans discovering new things. Our progression from wood to coal to plant and animal oils to mineral oils to natural gas to fission and perhaps fusion is due to humans investing new resources.

Antony Davies:

Only a fraction of us has what it takes even to attempt that kind of innovation, and only a fraction of those find themselves in the right place at the right time to make it happen.

Antony Davies:

Discovery and invention are rare.

Antony Davies:

If we want a lot of it, we need a lot of humans. And here's an opportunity for us to learn something. The United States is a nation of 50 similar but importantly different states. Some of these states are attracting people and some are repelling them. It would behoove us to understand why.

Antony Davies:

From 2024 to 2025, Delaware experienced negative natural growth. More residents died than were born. Yet Delaware's population grew almost 1%. How? Conditions in Delaware attracted so many people from other states and from outside the country that in migration more than offset natural population decline.

Antony Davies:

At the other extreme, 110,000 more Californians were born than died, yet California's population shrank because conditions there caused residents to flee faster than the good people of California could make more.

Antony Davies:

In large part, a state's economic growth depends on its population growth, and its population growth increasingly depends on in-migration. People move to states that offer better conditions for living, working, and raising families.

Antony Davies:

Some of those conditions like climate, culture, and family ties lie beyond the reach of policy, but many do not. And among the conditions that are at least partially within a state's control is the size of state and local government.

Antony Davies:

States whose governments spend more relative to the state economy may be crowding people out. In 2025, the 25 states with the most government spending averaged 1.9% economic growth. The 25 states with the least averaged 2.3% growth. Median household incomes adjusted for differences in cost of living were 7.6% higher among the half of states with less government spending. As compared with larger government states, smaller government states had lower poverty rates, lower income inequality, and lower state and local debt burdens.

Antony Davies:

And here, rural America has an ace in the hole. The cost of living in rural America tends to be lower. The quality of life tends to be better. People tend to be more closely connected, and state and local governments tend to be smaller. Combine this with the growing popularity of remote work and rural America has an advantage in attracting workers and boosting local economies.

Antony Davies:

People are already voting with their feet, and they're not voting for places that make life harder, poorer, or more precarious. Population growth is no longer automatic. Economic growth is no longer something the country can counterfeit with borrowed money and rosy forecasts. That leaves states to set the conditions that make prosperity easier or harder to achieve. Based on those conditions, people will choose whether to come or to leave, and prosperity will follow them.

Antony Davies:

This is Antony Davies for the Economic and Market Watch podcast. Thank you for listening. Remember to download this week's Economic and Market Watch intelligence brief and dashboard. And for more details on this week's topic, see this week's intelligence brief.

Antony Davies:

Economic and Market Watch is available on podcast apps including Spotify, Apple podcasts, and other platforms. If you don't already, please subscribe, rate us, and leave a review. And don't just sit there. Send us email! Economicresearch@nrucfc.cop.