The recession finally ended in August in one out of every five metro areas in the United States, especially in the Midwest and Great Plains, according to the latest Adversity Index from Moody's Analytics and msnbc.com.
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This is the first month this year when any metro area has moved from recession into the "recovery" category, indicating that the economy grew from six months earlier. Out of 384 metro areas in the nation, 79 are in recovery, according to the August data on jobs, manufacturing and housing. Another 270 areas have a "moderating recession," meaning their economies were not contracting as severely as earlier. That leaves 35 metro areas in a full-blown recession.
"The initial recovery is going to be slow," said economist Andrew Gledhill of Moody's Analytics. Jobs are still being lost, but in terms of manufacturing production, "the economy is finally beginning to emerge from the cellar."
Among the 79 recovering areas is Elkhart, Ind., where msnbc.com has been reporting on the nation's struggles through the lens of the Indiana city. You can read Elkhart reaction to this economic news in our Elkhart Project blog.
"Play" the recession
Here are several ways to explore this month's Adversity Index:
- An interactive map shows the economic health of every state and metro area. You can "play" the map to watch the economy's ups and downs over 15 years, or select any state to see data for each metro area for each month.
- The updated index will be published every month at http://adversity.msnbc.com. There is a lag of about six weeks, so September data will be out in mid-November.
- An explainer tells how the Adversity Index assesses the economy.
Areas in recovery
Each month, the Adversity Index uses data on employment, industrial production, housing starts and home prices to label each state or metro area as expanding, at risk of recession, in recession or recovering. The index was developed by msnbc.com and Moody's Analytics, which sells in-depth economic forecasts on metro areas.
Here are the 79 metro areas where the Adversity Index shows a recovery beginning in August. Several of the metro areas cross state lines, and therefore are listed more than once. You can find the list of counties in each metro area here .
- Alabama (3 out of 12 metro areas in recovery): Columbus (Georgia-Alabama), Huntsville, Mobile.
- Alaska (1 out of 2): Anchorage.
- Arizona (0 out of 6).
- Arkansas (3 out of 8): Fayetteville-Springdale-Rogers (Arkansas-Missouri), Hot Springs, Little Rock-North Little Rock.
- California (0 out of 28).
- Colorado (1 out of 7): Colorado Springs.
- Connecticut (0 out of 4).
- Delaware (0 out of 2).
- D.C. (0 out of 1): The metro area is in recession, though the narrower District itself is listed in recovery.
- Florida (0 out of 22).
- Georgia (4 out of 15): Augusta-Richmond County (Georgia-South Carolina), Columbus (Georgia-Alabama), Savannah, Warner Robins.
- Hawaii (0 out of 1).
- Idaho (4 out of 6): Idaho Falls, Lewiston (Idaho-Washington), Logan (Utah-Idaho), Pocatello.
- Illinois (5 out of 13): Bloomington-Normal, Danville, Davenport-Moline-Rock Island (Iowa-Illinois), Kankakee-Bradley, St. Louis (Missouri-Illinois).
- Indiana (9 out of 16): Anderson, Bloomington, Elkhart-Goshen, Evansville (Indiana-Kentucky), Fort Wayne, Gary, Indianapolis, Kokomo, Lafayette.
- Iowa (6 out of 9): Ames, Cedar Rapids, Davenport-Moline-Rock island (Iowa-Illinois), Des Moines, Iowa City, Omaha-Council Bluffs (Nebraska-Iowa).
- Kansas (2 out of 6): Kansas City (Missouri-Kansas), St. Joseph (Missouri-Kansas).
- Kentucky (2 out of 9): Elizabethtown, Evansville (Indiana-Kentucky).
- Louisiana (2 out of 8): Baton Rouge, New Orleans-Metairie-Kenner.
- Maine (0 out of 3).
- Maryland (0 out of 7).
- Massachusetts (2 out of 8): Cambridge-Newton-Framingham, Worcester.
- Michigan (1 out of 16): Kalamazoo-Portage.
- Minnesota (2 out of 8): Fargo (North Dakota-Minnesota), Grand Forks (North Dakota-Minnesota).
- Mississippi (2 out of 5): Jackson, Pascagoula.
- Missouri: (6 out of 9) Fayetteville-Springdale-Rogers (Arkansas-Missouri), Joplin, Kansas City (Missouri-Kansas), Springfield, St. Joseph (Missouri-Kansas), St. Louis (Missouri-Illinois).
- Montana (1 out of 3): Missoula.
- Nebraska (2 out of 3): Lincoln, Omaha-Council Bluffs (Nebraska-Iowa).
- Nevada (0 out of 3).
- New Hampshire (1 out of 2): Manchester-Nashua.
- New Jersey (2 out of 10): Edison, Newark-Union (New Jersey-Pennsylvania).
- New Mexico (0 out of 4).
- New York (0 out of 13).
- North Carolina (4 out of 15): Goldsboro, Greenville, Virginia Beach-Norfolk-Newport News (Virginia-North Carolina), Winston-Salem.
- North Dakota (3 out of 3): Bismarck, Fargo (North Dakota-Minnesota), Grand Forks (North Dakota-Minnesota).
- Ohio (2 out of 16): Columbus, Parkersburg-Marietta (West Virginia-Ohio).
- Oklahoma (0 out of 4).
- Oregon (0 out of 6).
- Pennsylvania (2 out of 16): Newark-Union (New Jersey-Pennsylvania), State College.
- Rhode Island (0 out of 1).
- South Carolina (3 out of 10): Augusta-Richmond County (Georgia-South Carolina), Columbia, Myrtle Beach-Conway-North Myrtle Beach.
- South Dakota (1 out of 3): Sioux Falls.
- Tennessee (1 out of 10): Cleveland.
- Texas (7 out of 26): Austin-Round Rock, Brownsville-Harlingen, Dallas-Plano-Irving, El Paso, Lubbock, McAllen-Edinburg-Pharr, San Antonio.
- Utah (2 out of 5): Logan (Utah-Idaho), Provo-Orem.
- Vermont (0 out of 1).
- Virginia (3 out of 11): Charlottesville, Harrisonburg, Virginia Beach-Norfolk-Newport News (Virginia-North Carolina).
- Washington (2 out of 13): Kennewick-Richland-Pasco, Lewiston (Idaho-Washington).
- West Virginia (1 out of 9): Parkersburg-Marietta (West Virginia-Ohio).
- Wisconsin (3 out of 15): Appleton, Madison, Oshkosh-Neenah.
- Wyoming (0 out of 2).
No metro area yet is shown in "expansion," the most positive category; that label is triggered when a metro area's economy grows past its previous peak.
One oddity: The last metro area to move into the recession, Bismarck , N.D., moved right back out of recession after a single month. Last in, one of the first out.
State by state
Looking at the state-level data, the states that climbed into the recovery category in August formed a band running from the Gulf Coast up to the Great Plains and west to some of the Mountain States: Louisiana and Mississippi, Indiana, Missouri, Iowa, Nebraska, South Dakota and North Dakota, Montana and Idaho.
These areas generally had less of a housing cycle of boom and bust, and benefit more from relatively strong prices in oil and natural gas, Gledhill said.
The only others in recovery were oil-rich Alaska and stimulus-rich District of Columbia — though the broader D.C. metro area, which includes parts of Maryland, Virginia and West Virginia, was still labeled in recession.
Even within those states, the recovery is not uniform. In Missouri, for example, where most of the state has begun to recover, the recession hung on through August in the river city of Cape Girardeau, in the university city of Columbia, and in the capital, Jefferson City.
Most of the states in recovery are low-population areas, generally far from the nation's largest cities. For example, not a single metro area in California is on the list.
"The weak initial recovery," Gledhill said, "is illustrated by the fact that those states plus D.C. comprise only a fraction of the economy," roughly a tenth of employment and output.
Little stimulus at the checkout counter
The slow recovery is held back by a lack of consumer spending, Gledhill said. In past recessions, housing and autos have tended to bounce back, boosted by low interest rates engineered by the Federal Reserve.
"Outside of the temporary boost from government incentives such as the first-time homebuyer tax credit and the Cash for Clunkers program, this kind of reaction in the current recovery has been relatively minimal," Gledhill said.
"This also helps explain some of the regional disparity of the recovery," he said. "Previously housing-boom areas such as California are noticeably lagging, as well as auto-dependent states in the industrial Midwest."
In terms of a national recovery, "We think it will be shown that the nation as a whole began to recover around August," Gledhill said. "Jobs are still being shed, but in terms of output (gross domestic product) the economy is finally beginning to emerge from the cellar."
The view from Elkhart
Elkhart's economy has started to improve, when its August numbers are compared with those of six months earlier. But if you compare them with a year earlier, or go even farther back, it's clear that it may take a long time to get back up to the highs of the past. Elkhart's recession began in December 2006, according to the index, one of the first areas outside of Michigan.
"Elkhart definitely remains in a quandary, and the economy may never fully recover to what it once was," said Gledhill. "In fact, in our long-term employment forecast, we never have Elkhart reaching its pre-recession peak. Recovery is about relative performance specific to that metro area. ... Elkhart is in bad shape and will be for the foreseeable future. Recovery will by no means be painless."
Here are the Elkhart numbers, compared with a year earlier, along with the top and bottom rankings among metro areas:
- Employment in the Elkhart-Goshen metro area fell 10.0 percent from a year earlier, according to the latest Adversity Index, compared with 10.6 percent the previous month. Again this is the greatest decline in the nation. The next two worst metro areas were Warren-Farmington Hills-Troy, Mich., down 9.4 percent, and Lake Havasu City-Kingman, Ariz., down 9.3 percent. The greatest increase in jobs was in Hot Springs, Ark., up 3.2 percent, followed by Kennewick-Richland-Pasco, Wash., up 2.5 percent, and Sandusky, Ohio, up 1.9 percent.
- Industrial production in the Elkhart area fell 21.2 percent year over year, compared with a 24.0 percent decline in the Adversity Index a month earlier. Eight metro areas showed greater declines. Worst again was Gary, Ind., down 25.7 percent, followed by Muskegon-Norton Shores, Mich., down 24.5 percent, and Anchorage, Alaska, down 23.7 percent. The smallest decrease in manufacturing output was in Hanford-Corcoran, Calif., down 3.4 percent, followed by Merced, Calif., down 3.7 percent, and Salinas, Calif., down 5.2 percent. No area showed an increase in manufacturing.
- The single-family housing construction industry fell by 68.5 percent in Elkhart from a year earlier, in terms of housing starts, according to the latest Adversity Index. Five areas showed greater declines. The fastest decline was in Battle Creek, Mich., down 86.6 percent, followed by Decatur, Ill., down 83.8 percent, and Ocala, Fla., down 74.8 percent. The greatest increase was in Elmira, N.Y., where housing starts rose 189.5 percent from a year earlier, then Vallejo-Fairfield, Calif., up 82.7 percent, and Beaumont-Port Arthur, Texas, up 63.3 percent.
The fourth component of the Adversity Index, home prices, will be updated when quarterly figures are released.
How can some of the metro areas on our msnbc.com map be in "recovery," if the statistics shown for that area are negative?
The answer: Moody's status assessment (in recession, in recovery, etc.) compares six-month periods. But the stats shown on the map are one-year comparisons. (In both cases, moving averages.)
You see where this is headed. If the sharpest decline was more than 6 months ago, but less than 12 months ago, then both these things will be true at the same time in areas beginning a recovery: stats will have improved over 6 months earlier, with the metro area showing up in the recovery category, and also the year-over-year stats will still be negative.
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