Special Briefing: America’s Growth Regions

Rochester, Minnesota Mayor and Panel of Economic Experts Discuss America's Hot Zones

Volcker Alliance Special Briefing Panel Examines America's Areas of Rapid Economic Growth - And Where State and Local Budgets are Headed

The US economy’s extraordinary recovery since the darkest days of the COVID-19 pandemic has continued into the fall of 2025, with inflation retreating and the Federal Reserve cutting interest rates to keep jobs and investment humming along.

Rochester, Minnesota Mayor Kim Norton emphasized the urgency in which localities need to access state and federal funds, especially as job growth and housing demand continue to rise: “We’ve been really focused on rebuilding our infrastructure, not only streetscapes and looking at social equity, but also looking at the infrastructure underground as we’re a growing city.” Mayor Norton added “We were very pleased that money came directly to the cities and local jurisdictions, so we didn’t have to go through a lot of time to get it through the state. It was very beneficial to get that money into our communities quickly, starting with ARPA and then the CARES Act funds.” 

Georgia State Economist Bob Buschman discussed Georgia’s fiscal growth in recent years: “Since the last quarter before the pandemic, Q4 2019, Georgia real GDP growth has run 2.4% per year, on average, slightly better than the 2.3% average for the nation. And though we had our own soft landing in the first half of 2023, we’re up 3.5% since then, compared to 3% for the nation. Job growth has also outpaced the nation for most of the expansion.” Buschman also noted that “with these revenue gains we’ve increased baseline spending to keep up with needs, including healthy pay increases for educators and for all state employees.”

“As important and transformational as the pandemic was in many ways, when it comes to the underlying trajectory of regional economic trends, it didn’t seem to change all that much,” said Eric Kim, head of US State ratings at Fitch Ratings. “Growth coming out of the pandemic has been very robust nationally, so strong in fact that it beats expectations month after month, quarter after quarter, year after year. I think most economists were anticipating a recession for about two years before finally giving up and accepting that the economic growth was simply going to continue, even with the Federal Reserve ratcheting up interest rates above 5%.”

When asked about the municipal market outlook, PIMCO Senior Vice President Tom Schuette said, “We definitely think it’s a great time to be a muni investor. 2024 has been a great year in terms of supply, I think we’ve had $40 billion monthly new issue calendars for six of the last seven months. So far in 2024 I think we’ve already outpaced total issuance from 2023 and 2022, with September and October being exceptionally strong months in terms of governments issuing new debt.” Continuing with the optimistic perspective, Schuette added: “I think in 20-plus years doing this at a rating agency and also on the buy side, I would argue that I’ve never seen the public sector so well-prepared for any turbulence or volatility on the revenue or expenditure side as they are right now.”

Special Briefings are made possible by the Volcker Alliance and members of the Penn IUR Advisory Board.

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