New Hampshire, the “first-in-the-nation” primary state (which will hold those elections Tuesday), has been a relatively “better-off” state than most others nationally.
Unemployment is low, economic growth is strong, but that doesn’t mean life in the Granite State is without its bumps.
Here’s a snapshot of New Hampshire’s economy in advance of Tuesday’s election.
Strong job market
New Hampshire has a diverse mix of industries, similar to that of the United States overall, but with hubs in fields such as health care, education and manufacturing.
And while it’s a state with one of the highest interstate commuting rates in the nation (thanks to its proximity to other metro areas, specifically Boston), New Hampshire boasts one of the lowest unemployment rates, logging a preliminary jobless rate of 2.3% in November, according to Bureau of Labor Statistics data.
“It’s sort of a ‘good news/bad news situation,’” said Charlie Dougherty, a Wells Fargo senior economist who follows the Northeast US region closely. “The good news is, it represents a strong labor market, where a lot of folks have employment, and for those who find themselves displaced, it’s relatively easy to find another job.”
The bad news?
“The challenge is for businesses who are trying to hire,” he said.
Tough for employers to find workers
Worker shortages have been a key theme of the pandemic recovery across the nation as economic growth outstripped businesses’ abilities to hire enough employees. Several factors contributed to the tight labor market, including early retirements, Covid-related deaths and long-term health issues, caregiving needs, health and safety concerns, and a greater desire for work-life balance. However, the situation has been more acute in New Hampshire.
“New Hampshire is going to run into some headwinds, when it comes to slower population growth,” Dougherty said. “New Hampshire skews a little bit older, and as more people age out of the labor force, it’s going to present some challenges to overall growth in the state over the long run.”
As of November, there were 2.1 jobs for every person looking for one in New Hampshire, according to BLS Job Openings and Labor Turnover state-specific data released last week. Nationally, that ratio is 1.4.
Both rates are trending down toward their pre-pandemic levels; however, New Hampshire still has a ways to go. Tight labor markets are seen as problematic in the context of inflation: The Federal Reserve views out-of-balance labor markets as potential drivers of higher wages that, in turn, can lead to higher prices and keep inflation elevated.
Additionally, while the state’s lack of income tax or sales tax means it is attractive for businesses and workers, New Hampshire is running up against a housing crisis.
“You’ve got to get the people here; but even if you get the people, where are they going to live?” Patricia M. Anderson, a professor of economics at Dartmouth University, told CNN in an interview.
Housing becoming increasingly unaffordable
Housing affordability has eroded in New Hampshire in recent years. Rising home prices coupled with higher mortgage rates put homebuying out of reach for many residents.
“This is a trend that you’ve seen especially in the Northeast, where the housing supply’s a little more limited, and that exerts upward pressure on prices,” Dougherty said.
In the quaint town of Chester, New Hampshire, located about 20 minutes outside of Manchester, home prices have jumped in the past year, said Patrick Connelly, whose family has run Field to Fork Farm, an organic farm and now event venue, for almost two decades.
“People can’t find rentals; there are certainly people that want to live in our town, and there are hundreds of houses backlogged to be built until things loosen up,” Connelly said, referencing the high interest rate environment. “So there’s a lot of growth in our area, in our small little town, but that’s not going to help the big issue of affordable housing, because the houses they’re building are all $700,000-$900,000 homes where the builders make the most money.”
Counterbalancing the limited income tax and lack of sales tax collections, property taxes in New Hampshire are the third-highest nationwide, according to an analysis by the Tax Foundation.
The state has allocated $100 million in federal Covid-19 recovery funds to build more affordable housing and help boost the workforce.
Tourism
New Hampshire’s important tourism industry has recovered from the Covid-19 pandemic in terms of visitors and revenue.
People wanted a place to go after the pandemic restrictions were lifted, said Brian Gottlob, the state’s economist.
“When the pandemic receded, that pent-up desire got spent,” he said. “A good part of it [was] because New Hampshire does a really, really good job of creating an image and marketing.”
In 2021, when air travel was still down, the state’s tourism division increased its digital marketing campaigns in areas within driving distance, such as Ohio and Washington, DC, said Lori Harnois, New Hampshire’s tourism director. It is now marketing more heavily in Canada and larger portions of New York and Pennsylvania.
Some 4.5 million visitors spent $2.3 billion in New Hampshire last summer. Both metrics are up 3.3% from the summer of 2022, she said. Part of the increase in spending is due to inflation.
However, the industry remains about 800 to 1,000 jobs shy of its pre-pandemic staffing levels as the state struggles with labor shortages, Gottlob said. Tourism, which encompasses leisure and hospitality, is New Hampshire’s second-largest employer, behind retail.
Median income/poverty
The typical New Hampshire household has a higher income compared to the average in the United States, and a smaller share of state’s residents are in poverty.
The median household income in New Hampshire was just under $90,000 in 2022, compared to just under $75,000 for the US, according to the Census Bureau.
And the Granite State has the lowest official poverty rate of any state, at 7.2% for 2022, while the nation’s rate is 12.6%, according to the bureau’s American Community Survey.
Southeastern New Hampshire — where three-quarters of the state’s residents live — benefits from being close to the Boston metropolitan area, said Phil Sletten, research director at the left-leaning New Hampshire Fiscal Policy Institute. That region has the highest median incomes and lowest poverty rates in the Granite State.
But other parts of New Hampshire — particularly the northernmost and west-central areas, which are rural — are struggling more in comparison. Their poverty rates were 11.6% and 11.7%, respectively, during the 2018 to 2022 time frame, compared to 7.3% for the state over that time period, according to Sletten.
Also, Sletten noted, it’s important to consider that New Hampshire is a relatively expensive state to live in.
“If you look at the top-level numbers, it is a better-off state in terms of its economic fortunes than many other states,” he said. But “when we compare incomes across states, unless you’re adjusting for the cost of living, that may not indicate the overall economic well-being or financial security of households.”
Rosier sentiment and outlook
New Hampshire residents give President Joe Biden somewhat higher marks on his handling of the economy compared to what other surveys have found for the nation at large. Some 42% of New Hampshire residents approved of Biden on the economy, with 55% disapproving, according to a November CNN/University of New Hampshire poll.
New Hampshire’s economy expanded at a 4.5% rate during the third quarter of last year, according to Commerce Department data. That robust rate was close to the national average of 4.9%.
But when it comes to their personal finances, New Hampshire residents are downbeat. Some 46% think their household is worse off financially than a year ago, while only 15% say they are better off, and 39% feel their finances are about the same, according to a December poll from the University of New Hampshire Survey Center.
One bright note: In 2022, some 61% of Granite Staters felt their household was worse off — but the current share is still “considerably higher” than it was in 2021, the center said.
Residents’ sentiments vary widely by party. The share of Republicans who say they are worse off is near an all-time high, while the shares of Democrats and Independents who feel this way have “fallen considerably” over the past year, according to the center.
“I think my friends and the people I associate with are pretty emboldened in who they’re going to be voting for, and I think the economy wouldn’t really affect it that much,” Connelly said. “I think that’s pretty common in New Hampshire. The people are really in their camps, and they’re not moving.”
