Job market recovery depends on location
Adversity Index shows big variations in local employment outlook
6/29/2010 11:33:25 AM ET
Despite signs that the national economy is getting back on its feet,
Americans who lost their jobs to the recession are having a harder time
getting back on theirs.
Of the 384 metro areas tracked by msnbc.com’s Adversity Index, only
two are in full-blown economic expansion, according to the latest
figures from Moody’s Economy.com. Until more regions join them, expect
local and regional jobless rates to remain stubbornly high.
Based on the latest data from April, two-thirds of those metro areas
have now moved into “recovery mode,” which means their economies and
job markets have hit bottom and are on the way back. The other
one-third are in a “moderating recession,” which means the contraction
is slowing, but things are still getting worse. That reflects the
gradual improvement in the national economy since December 2009, when
more than half the metro areas were still in the “moderating recession”
Improvements in job markets around the country have been more difficult to find.
There have been some hopeful signs of improvement in the latest
government jobs data. Though private sector hiring was much slower than
expected in May, employers boosted the number of hours worked and
temporary workers hired. That is often a precursor to the creation of
permanent, full-time jobs.
“Businesses in recent quarters have been getting some gains from
productivity as they’ve been working their existing work forces
harder," said Andrew Gledhill, an economist at Moody’s Analytics.
“That’s not something that can go on indefinitely. Workers are going to
feel they can’t keep up in the same pace, and businesses are going to
have to hire to keep up with growing U.S. and international demand."
But the outlook for a pickup in hiring is decidedly mixed — depending on where your job hunt takes you.
Like most economic statistics, national employment numbers tend to
mask variations from one region to another. Some states, like Alaska,
escaped the worst of the recession — in large part because of the
state’s reliance on oil production to fuel its economy. As of April,
employment levels in Alaska were 1 percent higher than a year earlier,
according to the Adversity Index data.
But only three states shows employment back to levels of a year
earlier. Payrolls in hard-hit states like California, Nevada and
Arizona were more than 3 percent lower. In giant California a 3 percent
change can represent some 400,000 lost jobs. And the outlook for those
regions doesn’t point to a recovering job market anytime soon.
“When you see those states you think of housing and tourism,” said
Gledhill. “Those two industries have kept those unemployment rates
really high. Those industries may be near or at the bottom, but they’re
not recovering with any vigor.”
As of April, housing starts were up year-over-year in all but West
Virginia and the District of Columbia. Those numbers were likely
boosted by the government’s home buyer tax credit. But more recent data
aren’t encouraging. Separate reports this week showed unexpected drops
in both new and existing home sales, and further declines are expected
now that the tax credit expired at the beginning of this month.
"The new home market is now at the lowest level it’s been in 42
years," said David Crowe, chief economist at the National Association
of Home Builders. "There are very few new houses on the marketplace,
and there are markets that are beginning to recover and people want a
new house. But our builders can’t borrow because the banks are saying
no to real estate, regardless of where it is or what kind of real
estate it is.”
Since the financial panic of September 2008 sent bankers scrambling
for cover, the lending industry has been slowly rebuilding the damage
inflicted by a historic wave of bad mortgages. But progress remains
slow among many regional and community banks.
“There’s still a lot of problems out there, a lot of unrecognized or unrealized bad loans in the banking system,”
said Mark Olson, former Federal Reserve Board governor who is now a
banking consultant. That’s a little bit of the crimp with the back’s
ability or willingness to lend. That’s going to be another a drag on
Tight lending is having the biggest impact on local economies that
rely on smaller businesses. Unlike large corporations that can borrow
in the credit markets, smaller companies are reliant on their local
banker for funding.
“A large proportion of them tend to be in construction and retail
trade, said Gledhill. “And neither of these two industries are expected
to hire in any significant numbers in the near term. Typically, in past
recession housing is one of the driver industries."
Variations in job market conditions are even more pronounced at the
regional level, as measured by metropolitan statistical areas or MSAs.
Some of the hardest-hit areas have seen sharp rebounds in employment,
according to the Adversity Index data, which uses a three-month “moving average” to smooth out month-to-month trends.
In Elkhart, Ind., payrolls had climbed back to where they were in
April 2009, when the level of employment was down 23 percent from a
year earlier. While payrolls are rising in most of the MSAs tracked by
the index, a handful continue to slip lower, including Pascagoula,
Miss., and Flint, Mich.
While employment is picking up in most cities, the job market hasn’t
yet repaired the damage done by the recession. The number of people out
of work in April was higher than a year earlier in all but 35 of the
nation’s 384 metro areas.
In general, job markets in the Midwest have fared better than on the
coasts. That’s due partly to the reliance of those regions on
agriculture and energy production, said Gledhill. They also didn’t get
hit as hard by the housing bust that dragged many regions deep in
recession. That helps explain why North and South Dakota have the
lowest unemployment rates in the nation — below 5 percent.
“For the most part, these states had much less exposure to the housing boom-bust cycle,” said Gledhill. “There weren’t investor
homebuyers coming in a buying up properties. And there wasn’t a huge
influx of subprime home buyers because housing was relatively
States and regions with a big manufacturing bases are also beginning
got show signs of improving job markets, though a stronger dollar may
weigh on those recoveries by dampening exports. Despite the
improvement, those economies are still feeling the painful effects of
heavy job losses to the recession.
“Industrial production has been creeping up off the bottom but it
took such a hit during the recession its going to take a long time to
recoup all those losses,” said Gledhill.
‘Play’ the index
The Adversity Index was created by msnbc.com and Moody’s
Economy.com to track the economic fortunes of states and metro areas.
Each month, the Adversity Index uses the latest data to label each area
in one of four categories: expanding, in recovery, at risk of recession
or in recession.
You can follow the fortunes of each metro area in the nation on our
, which gives details for each metro area and state for the past
15 years. Here are several ways to explore this month’s Adversity
shows the economic health of every state and metro area. You
can "play" the map on this page to watch the economy’s ups and downs
over 15 years, or select any state to see data for each metro area for
shows when the current recession enveloped each metro area.
- The updated index will be published every month at
adversity.msnbc.com, where you can read all the articles in this series. There is a lag of about six weeks.
tells how the Adversity Index assesses the economy. Many areas include multiple counties, and many cross state lines.
shows which counties are within each metro area.
© 2010 msnbc.com
Data: Adversity Index
adversity index economy interactive map graphic employment housing starts industry u.s.
Discuss: Job market recovery depends where you live
Adversity Index shows big variations in local employment outlook
These puff pieces by the sham extensions of the White House Press offices are getting old.
I’m sick and tired of this continued journalistic malpractice.
This is nothing more than a puff piece to try and off set
the terrible numbers coming this Friday of the continuing near 10%
HUNDREDS AND HUNDREDS OF BILLIONS OF YOUR, YOUR CHILDREN’S
AND YOUR GRANDCHILDREN’S MONEY (they have yet to earn), WASTED YIELDING
NO REAL JOB GROWTH.
The socialist / liberal policies from Obama and this Congress are
all job killers / job growth inhibitors and everyone knows it. Their
interests are not in job creation, it is wealth re-distribution and
increased government dependency by their parasitic supporters.
The front lines of the latest French protest
against raising the retirement age revealed a remarkable sight: Not the
slightest wrinkle, not a single gray hair.
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