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Investigative reporter Bill Dedman of msnbc.com
By Bill Dedman Investigative reporter
msnbc.com
updated 11/18/2009 8:04:51 AM ET 2009-11-18T13:04:51

For many Americans, especially the almost 16 million out of work, merely mentioning the word "recovery" can make the blood boil.

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And yet, amid the persistent job losses, tight credit and looming foreclosures, the economy's pulse is beginning to pick up. It's very faint still, as if the patient is in the emergency room and nobody is sure when she'll get better.

As of the new data for September, 100 metro areas — or nearly one in four across the country — have started to recover, according to the latest Adversity Index from Moody's Analytics and msnbc.com. That's up from 79 metro areas in August.

They aren't the biggest metro areas (none is in California or Florida, for example), nor are they the main drivers of the economy. But recovery has to begin somewhere, and the evidence from the past two months' worth of data shows that a recovery may be spreading.

Each month, the Adversity Index uses government 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.

Out of 384 metro areas in the nation, 100 were in recovery, according to the September Adversity Index. A much larger group, 278 areas, had a "moderating recession," meaning their economies were still shrinking but not so severely as earlier this year. That leaves six metro areas still spiraling downward in recession.

"Recovery" doesn't mean that an area's economy is now above where it was at the beginning of the recession, just that the area has begun to dig its way out of the hole.

It may be hard for many to believe that a recovery is beginning, with so much pain, particularly with high unemployment.

"Coming to grips with recession, and recovery for that matter, is a difficult task," said economist Andrew Gledhill of Moody's Analytics.

"When gauging the beginning or end of recession, you're attempting to evaluate a local economy on the sum of its merits, but the truth is that for most people what matters is how the job market is operating," Gledhill said.

"Unfortunately, employment is typically a lagging indicator of economic performance," he said. "Having cut back hours for their workers significantly and still wary of what may be to come, businesses will typically increase use of their existing work force or bring on temporary help. It seems that we're getting to be in the early stages of this process now."

Previous recessions have followed a similar pattern.

"For instance, the 2001 recession is recognized as being over in November of that year, but the economy did not begin adding jobs consistently until the latter half of 2003," Gledhill said. "Similarly we do not expect net jobs to be added coming out of this downturn until the second half of 2010, even though we think the recession ended this past August.

"Further, even after jobs begin to be added, it is expected to take another two years after that to recoup all those jobs lost. Recovery is often painful for the job market, especially when coming out of a recession of this magnitude."

"Play" the index
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 October data will be out in mid-December.
  • An explainer tells how the Adversity Index assesses the economy.
  • This list shows which counties are in each metro area.

Areas in recovery
Here are the 100 metro areas where the Adversity Index shows a recovery has begun. Areas that changed in the September data are in bold. Several of the metro areas cross state lines and therefore are listed more than once.

  • Alabama (3 out of 12 metro areas in recovery): Columbus (Georgia-Alabama), Huntsville, Mobile.
  • Alaska (1 out of 2): Anchorage.
  • Arizona (1 out of 6): Yuma.
  • 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 broad metro area, which includes parts of Maryland, Virginia and West Virginia, is still in recession, though the narrower District of Columbia itself is listed in recovery.
  • Florida (0 out of 22).
  • Georgia (5 out of 15): Augusta-Richmond County (Georgia-South Carolina), Brunswick, 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 (6 out of 13): Bloomington-Normal, Danville, Davenport-Moline-Rock Island (Iowa-Illinois), Kankakee-Bradley, Springfield, St. Louis (Missouri-Illinois).
  • Indiana (10 out of 16): Anderson, Bloomington, Elkhart-Goshen, Evansville (Indiana-Kentucky), Fort Wayne, Gary, Indianapolis, Kokomo, Lafayette, Terre Haute.
  • Iowa (7 out of 9): Ames, Cedar Rapids, Davenport-Moline-Rock island (Iowa-Illinois), Des Moines, Iowa City, Omaha-Council Bluffs (Nebraska-Iowa), Sioux City (Iowa-Nebraska-South Dakota).
  • Kansas (2 out of 6): Kansas City (Missouri-Kansas), St. Joseph (Missouri-Kansas).
  • Kentucky (4 out of 9): Elizabethtown, Evansville (Indiana-Kentucky), Lexington-Fayette, Owensboro.
  • Louisiana (3 out of 8): Baton Rouge, Lake Charles, 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 (3 out of 8): Fargo (North Dakota-Minnesota), Grand Forks (North Dakota-Minnesota), Rochester.
  • Mississippi (3 out of 5): Gulfport-Biloxi, 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 (2 out of 3): Billings, Missoula.
  • Nebraska (3 out of 3): Lincoln, Omaha-Council Bluffs (Nebraska-Iowa), Sioux City (Iowa-Nebraska-South Dakota).
  • 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 (2 out of 13): Ithaca, Utica-Rome.
  • North Carolina (3 out of 15): Goldsboro, Greenville, Winston-Salem.
  • North Dakota (3 out of 3): Bismarck, Fargo (North Dakota-Minnesota), Grand Forks (North Dakota-Minnesota).
  • Ohio (4 out of 16): Columbus, Parkersburg-Marietta (West Virginia-Ohio), Sandusky, Weirton-Steubenville (West Virginia-Ohio).
  • Oklahoma (0 out of 4).
  • Oregon (0 out of 6).
  • Pennsylvania (3 out of 16): Johnstown, Newark-Union (New Jersey-Pennsylvania), State College.
  • Rhode Island (0 out of 1).
  • South Carolina (4 out of 10): Augusta-Richmond County (Georgia-South Carolina), Columbia, Myrtle Beach-Conway-North Myrtle Beach, Spartanburg.
  • South Dakota (3 out of 3): Rapid City, Sioux City (Iowa-Nebraska-South Dakota), Sioux Falls.
  • Tennessee (1 out of 10): Cleveland.
  • Texas (9 out of 26): Austin-Round Rock, Brownsville-Harlingen, Dallas-Plano-Irving, El Paso, Fort Worth, Lubbock, McAllen-Edinburg-Pharr, San Antonio, Wichita Falls.
  • Utah (2 out of 5): Logan (Utah-Idaho), Provo-Orem.
  • Vermont (0 out of 1).
  • Virginia (3 out of 11): Blacksburg-Christiansburg-Radford, Charlottesville, Harrisonburg.
  • Washington (2 out of 13): Kennewick-Richland-Pasco, Lewiston (Idaho-Washington).
  • West Virginia (2 out of 9): Parkersburg-Marietta (West Virginia-Ohio), Weirton-Steubenville (West Virginia-Ohio).
  • Wisconsin (4 out of 15): Appleton, Janesville, Madison, Oshkosh-Neenah.
  • Wyoming (0 out of 2).

One area moved backwards in the Moody's reckoning: Virginia Beach-Norfolk-Newport News (Va.-N.C.), which last month was shown in recovery but is now back in the recession category.

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.

State by state
Looking at the state-level data, there was no change in September in the list of states in the recovery category: Alaska, Idaho, Indiana, Iowa, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, South Dakota, and the District of Columbia.

As you can see from the list above, there are still no metro areas in recovery in California, Florida, Oregon, and several other states hit particularly hard by drops in housing values.

The view from Elkhart
Among the 100 recovering areas is Elkhart, Ind., where msnbc.com has had reporters and photographers on the ground, reporting on the nation's struggles through the lens of the Indiana city.

Elkhart's economy started to improve in August, based on comparisons with figures posted six months earlier. That's how it earns the recovery label on our map.

But if you compare Elkhart's numbers with a year earlier, or go even further back, it's clear that it may take a long time to return to the highs of the past. According to the index, Elkhart was one of the first areas outside of Michigan to slip into recession when its downturn began in December 2006.

Here are the Elkhart numbers, compared with a year earlier:

  • Employment in the Elkhart-Goshen metro area fell 8.62 percent from a year earlier, according to the latest Adversity Index, compared with 9.71 percent the previous month. Only one metro area showed a worse decline: Warren-Farmington Hills-Troy, Mich., down 9.11 percent. Third from the bottom was Lake Havasu City-Kingman, Ariz., down 8.21 percent. The greatest increase in jobs was in Kennewick-Richland-Pasco, Wash., up 3.41 percent, followed by Hot Springs, Ark., up 2.89 percent, and Sandusky, Ohio, up 2.54 percent.
  • Industrial production in the Elkhart area fell 15.77 percent year over year, compared with a 19.81 percent decline in the Adversity Index a month earlier. Twenty-seven metro areas showed greater declines (compared with only eight last month). Worst again was Gary, Ind., down 21.78 percent, followed by Muskegon-Norton Shores, Mich., down 20.37 percent, and Weirton-Steubenville, W.Va.-Ohio, down 19.19 percent. The smallest decrease in manufacturing output was in Carson City, Nev., down only 0.72 percent, followed by Merced, Calif., down 1.01 percent, and Wichita, Kan., 1.46 percent.
  • The single-family housing construction industry fell by 59.97 percent in Elkhart from a year earlier, in terms of housing starts, according to the latest Adversity Index. Eleven areas showed greater declines. The fastest decline was in Decatur, Ill., down 85.5 percent, followed by Battle Creek, Mich., down 84.73 percent, and Ocala, Fla., down 71.79 percent. The greatest increase was in Elmira, N.Y., where housing starts rose 150.49 percent from a year earlier, then Bay City, Mich., up 126.79 percent, and Danville, Ill., up 116.26 percent.
  • Home prices, the fourth component of the Adversity Index, will be updated when quarterly figures are released.

Related: Recession over? Sure doesn’t feel like it
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