US recovery varies greatly by state, county, city
June 27 (Reuters) - In a twist on the old aphorism about real estate, the three most important factors for the current U.S. economic recovery seem to be location, location, location.
Growth right now is "extremely concentrated" in a few states, said Chris Mauro head of U.S. Municipal Research Strategy at RBC Capital Markets, adding that there has been "a general stagnation, with the exception of some of the resource-rich states."
Three reports released on Wednesday show wide variations in the rebound from the 2007-09 economic recession, both at the state and local levels.
Unlike past downturns, the recession spared only a few states, largely because it hit nearly every economic sector and the states' economies are interconnected, said Arturo Perez at the National Conference of State Legislatures.
"When things started going south, no state was able to ward off the bad stuff that was happening," he said.
But the states did not enter recession at the same time and some suffered less than others.
"They're not in lockstep going into a recession. They're not going to be in lockstep coming out," he said, pointing to Kansas, which did not have the same run-up in housing prices - and therefore not as steep a drop - as Nevada.
Now, energy-rich states are sprinting toward prosperity, helped by a surge in natural gas, while others are closer to shuffling back to stability. That is creating disparities on the personal level and the political one - some states are considering cutting taxes while others are having to close budget gaps.
In the first quarter of 2012, personal income rose in 47 of the 50 states, according to a Commerce Department report released on Wednesday that found state personal income growth was 0.8 percent in the first quarter, compared with 0.4 percent in the fourth quarter of 2011.
Personal income declined 0.3 percent in Mississippi and 0.1 percent in Kansas and was unchanged in Oklahoma in the first three months of 2012. On the other end of the spectrum, income grew the most in commodity-abundant North Dakota, 2.3 percent from the quarter before.
Total earnings grew 0.81 percent in the first quarter, according to the report. They ranged from dropping 0.34 percent in Oklahoma to rising 1.12 percent in Washington.
Earlier this month, the US. Census reported that economic growth was scattered across the states in 2011. A boom in mining helped North Dakota's economy grow 7.6 percent, while in six states the economies shrank.
PATCHINESS AT LOCAL LEVEL
Cities and counties also did not enter recession in a uniform way. Some were immediately affected by the housing crisis, while others did not see the downturn until there were massive problems on the national level, said Jackie Byers, a researcher at the National Association of Counties.
In its quarterly review of metropolitan economies released on Wednesday, the Brookings Institution described the wide variations in recovery as "significant patchiness."
Brookings found that from January to March, employment growth accelerated across most of the nation's 100 largest metro areas, while output growth weakened. Unemployment rates fell in more than half of all metropolitan areas, but remained above 6 percent in almost all of them.
Housing prices hit new lows in 73 of the 100 largest metropolitan areas, which typically include a major city and its surrounding suburbs, after showing signs of growth in previous quarters, Brookings found.
"Until there's a recovery across all sectors you won't see a smoothing out in the economy," said Alec Friedhoff, a research analyst for the group's Metropolitan Policy Program.
Brookings found that, yet again, cities in Texas are having the fastest recoveries, largely because they experienced mild recessions and are now benefiting from a boom in natural gas.
Cities in California's Central Valley, such as financially tottering Stockton and other western metropolitan areas such as Colorado Springs, Las Vegas and Tucson continue to lag.
U.S. Labor Department data also released on Wednesday showed the patchiness likely persisted past March.
In May, employment increased in 266 metropolitan areas from a year before, decreased in 101 areas and had no change in five areas. The jobless rate was at least 10 percent in 45 areas, but was lower than 7 percent in 140.
- Tweet this
- Share this
- Digg this