Gov Monitor
Inflation-adjusted gross domestic product (GDP) grew at a rapid 5.9 percent annual rate in the last quarter of 2009, the fastest economic growth rate since the third quarter of 2003.
But that growth may simply be due to inventory replenishment and, if so, is unlikely to persist. Consumer spending rose in January, but house prices fell.
The unemployment rate remained steady at 9.7 percent in February, but long-term unemployment (unemployment of six months or more) hit a record high.
The nation lost 36,000 jobs in January, slightly more than it lost in December but many fewer than it lost in previous months. Even if recent modest job losses prefigure a return to new hiring, the kinds of large, sustained job gains that would be needed to bring the unemployment rate down seem unlikely in the near future.
The MetroMonitor, an interactive barometer of the health of America’s metropolitan economies, looks “beneath the hood” of national economic statistics to portray the diverse metropolitan landscape of recession and recovery across the country. It aims to enhance understanding of the local underpinnings of national economic trends, and to promote public- and private-sector responses to the downturn that take into account metropolitan areas’ distinct strengths and weaknesses.
This edition of the Monitor examines indicators through the fourth quarter of 2009 (ending in December) in the areas of employment, unemployment, output, home prices, and foreclosure rates for the nation’s 100 largest metropolitan areas.
It finds that:
The economic recovery spread steadily during 2009, with all of the 100 largest metropolitan areas registering growth in output during the fourth quarter of the year. The number of metropolitan areas that had a quarter-to-quarter gain in output rose from 19 in the second quarter of 2009 to 89 in the third quarter to 100 in the final quarter. With only two exceptions, once output began to increase it continued to increase in subsequent quarters. (In Baton Rouge and Portland (OR), output grew in the second quarter of the year, fell in the third quarter, and then grew again in the last quarter.)
Employment recovery has been much less widespread and less consistent than output recovery. The number of metropolitan areas that had quarter-to-quarter employment growth rose from six in the second quarter of 2009 to 14 in the third quarter to only 20 (Albuquerque, Austin, Charleston, Fresno, Harrisburg, Jackson, Louisville, New Orleans, Ogden, Oklahoma City, Oxnard, Phoenix, Poughkeepsie, Provo, Raleigh, Rochester, St. Louis, Toledo, Virginia Beach, and Washington) in the last quarter. Job growth in one quarter was no guarantee of continued job growth in subsequent quarters. Of the six metropolitan areas that gained jobs in the second quarter, all lost jobs in the fourth quarter, although four gained jobs in the third quarter. Of the 14 that gained jobs in the third quarter, only four continued to do so in the fourth quarter.
A substantial minority of metropolitan areas had made a complete output recovery by the fourth quarter of 2009 but only one had made a complete jobs recovery. Twenty-eight metropolitan areas had recovered their pre-recession levels of output in the fourth quarter, including Washington, DC, which never lost output during the last five years. However, only McAllen had regained its pre-recession employment level (as well as its pre-recession output level).
Sixty-three of the 100 largest metro areas lost a greater share of jobs eight quarters after the start of the Great Recession (the fourth quarter of 2007) than they did during the first eight quarters after the start of any of the previous three national recessions. Eight quarters after the start of the national recession, the 100 largest metropolitan areas combined had lost 4.6 percent of the jobs they had at the start of the Great Recession that began in 2007, compared to 1.9 percent for the 2001 recession, and 1.8 percent for the 1990–1991 recession. However, in the 1981–1982 recession, the 100 largest metropolitan areas had grown 0.1 percent in the first eight quarters after the start of the national recession. In general, the metropolitan areas that ranked lowest on the Monitor’s overall index (i.e., those that suffered most during the Great Recession and subsequent recovery) were also ones in which the jobs recovery was weaker after the Great Recession than after all three previous recessions. Those that ranked the highest were also ones in which the current recovery was stronger than after one or two of the previous three recessions/recoveries.
Housing markets remained weak, with house prices falling in all of the 100 largest metropolitan areas between the last quarter of 2008 and the last quarter of 2009. In contrast, 49 metropolitan areas showed house price gains between the third quarter of 2008 and the third quarter of 2009. Foreclosures continued to grow in most metropolitan areas in the fourth quarter; 56 metropolitan areas had increases in the number of real estate-owned (REO) properties during that quarter, although the 100 largest metropolitan areas combined registered a slight decline in their REO rate. The fact that economic recovery was beginning to occur despite continued weakness in housing markets suggests that continued economic recovery may not hinge on a real estate recovery.
While the nation as a whole had almost no job growth during the last decade, 17 metropolitan areas had double-digit job growth and 34 lost jobs during that time. The 17 metropolitan areas with double-digit job growth from the fourth quarter of 1999 to the fourth quarter of 2009 were all located in the South or West: Austin, Bakersfield, Boise, Cape Coral, Charleston, Houston, Lakeland, Las Vegas, McAllen, Ogden, Orlando, Phoenix, Provo, Raleigh, Riverside, San Antonio, and Washington. Notably, several of these metropolitan areas suffered severe job losses during the Great Recession as a result of the collapse of their housing markets such as Raleigh real estate, but those losses made only a modest dent in the enormous job gains that occurred in these areas earlier in the decade. The 34 metropolitan areas that lost jobs during the decade were located mostly in the Northeast and Great Lakes regions. They included not only metropolitan areas suffering from the continued loss of manufacturing jobs but also the high technology centers of San Jose and San Francisco.
Because of the Great Recession combined with pre-recession employment trends, 26 metropolitan areas lost 10 or more years of job growth, while 17 lost three or fewer years of job growth. In 26 metropolitan areas, employment in the fourth quarter of 2009 was at a level that had not been seen for 10 or more years. These areas were generally ones that rank low on our overall index, and many of them had been losing jobs even before the Great Recession began. At the extreme, Detroit, Youngstown, Dayton, and Cleveland had employment levels in the fourth quarter of 2009 that they had not had in more than 20 years. In contrast, there were 17 metropolitan areas where employment in the fourth quarter of 2009 was at a level last seen only three or fewer years ago. In these areas, which rank high on our overall index, the Great Recession made a relatively small dent in a high pre-recession job growth rate. In the metropolitan areas that suffered the most from the collapse of their housing markets (and that, therefore, were among the places that ranked lowest on our overall index), the Great Recession resulted in a loss of four to eight years of job growth. In Las Vegas, for example, employment in the fourth quarter of 2009 had dropped back to the same level it was at in the fourth quarter of 2004.
Overall, the economic indicators for the nation’s 100 largest metropolitan areas reinforce the national story of a weak, tentative, and jobless recovery.
However, vast differences in performance continued to separate the metropolitan areas that the recession hit the hardest from those less affected.
And when the Great Recession and its recovery are compared with previous recessions and recoveries, or when their impacts are considered in tandem with long-term job trends of the last decade, the contrasts between metropolitan areas are similar.
But that growth may simply be due to inventory replenishment and, if so, is unlikely to persist. Consumer spending rose in January, but house prices fell.
The nation lost 36,000 jobs in January, slightly more than it lost in December but many fewer than it lost in previous months. Even if recent modest job losses prefigure a return to new hiring, the kinds of large, sustained job gains that would be needed to bring the unemployment rate down seem unlikely in the near future.
The MetroMonitor, an interactive barometer of the health of America’s metropolitan economies, looks “beneath the hood” of national economic statistics to portray the diverse metropolitan landscape of recession and recovery across the country. It aims to enhance understanding of the local underpinnings of national economic trends, and to promote public- and private-sector responses to the downturn that take into account metropolitan areas’ distinct strengths and weaknesses.
This edition of the Monitor examines indicators through the fourth quarter of 2009 (ending in December) in the areas of employment, unemployment, output, home prices, and foreclosure rates for the nation’s 100 largest metropolitan areas.
It finds that:
The economic recovery spread steadily during 2009, with all of the 100 largest metropolitan areas registering growth in output during the fourth quarter of the year. The number of metropolitan areas that had a quarter-to-quarter gain in output rose from 19 in the second quarter of 2009 to 89 in the third quarter to 100 in the final quarter. With only two exceptions, once output began to increase it continued to increase in subsequent quarters. (In Baton Rouge and Portland (OR), output grew in the second quarter of the year, fell in the third quarter, and then grew again in the last quarter.)
Employment recovery has been much less widespread and less consistent than output recovery. The number of metropolitan areas that had quarter-to-quarter employment growth rose from six in the second quarter of 2009 to 14 in the third quarter to only 20 (Albuquerque, Austin, Charleston, Fresno, Harrisburg, Jackson, Louisville, New Orleans, Ogden, Oklahoma City, Oxnard, Phoenix, Poughkeepsie, Provo, Raleigh, Rochester, St. Louis, Toledo, Virginia Beach, and Washington) in the last quarter. Job growth in one quarter was no guarantee of continued job growth in subsequent quarters. Of the six metropolitan areas that gained jobs in the second quarter, all lost jobs in the fourth quarter, although four gained jobs in the third quarter. Of the 14 that gained jobs in the third quarter, only four continued to do so in the fourth quarter.
A substantial minority of metropolitan areas had made a complete output recovery by the fourth quarter of 2009 but only one had made a complete jobs recovery. Twenty-eight metropolitan areas had recovered their pre-recession levels of output in the fourth quarter, including Washington, DC, which never lost output during the last five years. However, only McAllen had regained its pre-recession employment level (as well as its pre-recession output level).
Sixty-three of the 100 largest metro areas lost a greater share of jobs eight quarters after the start of the Great Recession (the fourth quarter of 2007) than they did during the first eight quarters after the start of any of the previous three national recessions. Eight quarters after the start of the national recession, the 100 largest metropolitan areas combined had lost 4.6 percent of the jobs they had at the start of the Great Recession that began in 2007, compared to 1.9 percent for the 2001 recession, and 1.8 percent for the 1990–1991 recession. However, in the 1981–1982 recession, the 100 largest metropolitan areas had grown 0.1 percent in the first eight quarters after the start of the national recession. In general, the metropolitan areas that ranked lowest on the Monitor’s overall index (i.e., those that suffered most during the Great Recession and subsequent recovery) were also ones in which the jobs recovery was weaker after the Great Recession than after all three previous recessions. Those that ranked the highest were also ones in which the current recovery was stronger than after one or two of the previous three recessions/recoveries.
Housing markets remained weak, with house prices falling in all of the 100 largest metropolitan areas between the last quarter of 2008 and the last quarter of 2009. In contrast, 49 metropolitan areas showed house price gains between the third quarter of 2008 and the third quarter of 2009. Foreclosures continued to grow in most metropolitan areas in the fourth quarter; 56 metropolitan areas had increases in the number of real estate-owned (REO) properties during that quarter, although the 100 largest metropolitan areas combined registered a slight decline in their REO rate. The fact that economic recovery was beginning to occur despite continued weakness in housing markets suggests that continued economic recovery may not hinge on a real estate recovery.
While the nation as a whole had almost no job growth during the last decade, 17 metropolitan areas had double-digit job growth and 34 lost jobs during that time. The 17 metropolitan areas with double-digit job growth from the fourth quarter of 1999 to the fourth quarter of 2009 were all located in the South or West: Austin, Bakersfield, Boise, Cape Coral, Charleston, Houston, Lakeland, Las Vegas, McAllen, Ogden, Orlando, Phoenix, Provo, Raleigh, Riverside, San Antonio, and Washington. Notably, several of these metropolitan areas suffered severe job losses during the Great Recession as a result of the collapse of their housing markets such as Raleigh real estate, but those losses made only a modest dent in the enormous job gains that occurred in these areas earlier in the decade. The 34 metropolitan areas that lost jobs during the decade were located mostly in the Northeast and Great Lakes regions. They included not only metropolitan areas suffering from the continued loss of manufacturing jobs but also the high technology centers of San Jose and San Francisco.
Because of the Great Recession combined with pre-recession employment trends, 26 metropolitan areas lost 10 or more years of job growth, while 17 lost three or fewer years of job growth. In 26 metropolitan areas, employment in the fourth quarter of 2009 was at a level that had not been seen for 10 or more years. These areas were generally ones that rank low on our overall index, and many of them had been losing jobs even before the Great Recession began. At the extreme, Detroit, Youngstown, Dayton, and Cleveland had employment levels in the fourth quarter of 2009 that they had not had in more than 20 years. In contrast, there were 17 metropolitan areas where employment in the fourth quarter of 2009 was at a level last seen only three or fewer years ago. In these areas, which rank high on our overall index, the Great Recession made a relatively small dent in a high pre-recession job growth rate. In the metropolitan areas that suffered the most from the collapse of their housing markets (and that, therefore, were among the places that ranked lowest on our overall index), the Great Recession resulted in a loss of four to eight years of job growth. In Las Vegas, for example, employment in the fourth quarter of 2009 had dropped back to the same level it was at in the fourth quarter of 2004.
Overall, the economic indicators for the nation’s 100 largest metropolitan areas reinforce the national story of a weak, tentative, and jobless recovery.
However, vast differences in performance continued to separate the metropolitan areas that the recession hit the hardest from those less affected.
And when the Great Recession and its recovery are compared with previous recessions and recoveries, or when their impacts are considered in tandem with long-term job trends of the last decade, the contrasts between metropolitan areas are similar.
