Philadephia Fed Reserve predicts 9 state economies will contract in 2020

Jan. 3 (UPI) -- West Virginia leads a list of nine states the Federal Reserve Bank of Philadelphia expects to contract in 2020, the most states since the end of the Great Recession in 2009.

The bank said Thursday that in its forecast that the predicted downturn could impact the upcoming presidential election as President Donald Trump runs for a second term in office.

The West Virginia economy is expected to contract the most, where its economy is expected to contract anywhere from 1.5 percent to 4.5 percent. That is followed by Pennsylvania, Delaware, Montana and Oklahoma, which will shrink over the first six months of the year, according to projections.

Four states are expected to expand before facing contractions: Vermont, New Jersey, Kentucky and Connecticut.

Most of the states, according to the forecast, are expected to see economic growth ranging from 1.5 to 4.5 percent.

The bank's index forecasts the six-month growth rate by examining state data, which includes housing permits, initial unemployment insurance claims, delivery times from the Institute for Supply Management manufacturing survey.

The interest rate spread between the 10-year Treasury bond and the three-month Treasury bill also are factored in.