The nationwide recession may have ended last summer, but most states and cities continue to struggle and have not yet begun to recover, according to the latest Adversity Index from Moody's Analytics and msnbc.com.
A few more cities and states moved into recovery in November, according to the latest data, but most areas were still in a "moderating" recession, meaning the situation was still deteriorating, but more slowly, according to Andrew Gledhill, an economist with Moody's Analytics.
“For a lot of these areas it hasn’t gotten measurably better, it just stopped getting worse," he said. "But there still hasn’t been the distinct uptick we’d like to see. This recession has been so deep, it’s going to take a long time to get back to where we were pre-recession.”
After the last recession in 2001, the swing to expansion was more rapid, according to the Adversity Index data, which goes back to 1994. In March 2002, most states were just coming out of recession; by September of that year expansion had taken hold widely.
This time, though the steepest part of the downturn ended in most states last June, most remained mired in a “moderating recession” as of November. Only scattered areas were in “recovery” and none yet show “expansion.”
Like all recoveries, this one has been felt unevenly across the country. One bright spot in the November index was Texas — which has moved into the recovery category. Rising energy prices have helped boost the number of drilling rigs in operation. Dallas and Houston were among 28 metropolitan areas that moved into the recovery category in the latest survey.
Heavy government spending on the economic stimulus program and a slowdown in the level of inventory drawdowns helped boost the nation's economic output in the second half of 2009. But most economists expect growth to remain weak thorough this year.
“This recession was so consumer-driven, and that engine has really not yet picked up,” said Gledhill.
Weak job, housing markets
Until the housing and job markets turn around, it’s going to be tough to get consumers in a spending mood. Though job losses have been easing, payrolls continued to shrink in almost every state in November.
The only areas showing employment levels the same as a year earlier were North Dakota and Washington, D.C. In the hardest-hit states — Arizona, Michigan and Nevada — payrolls fell by more than 6 percent from November 2008 to November 2009.
After recovering from a steep slide, housing starts were still down by more than 20 percent during that period in Colorado, Illinois, Kansas, Nevada, Ohio and Wyoming. But housing starts were higher than a year ago in 17 states plus the District of Columbia. Those states are Arizona, Delaware, Hawaii, Iowa, Kentucky, Louisiana, Massachusetts, Maryland, Maine, Missouri, North Dakota, Oklahoma, Rhode Island, South Dakota, Texas, Utah and West Virginia.
Each month, the Adversity Index uses government data on employment, industrial production, housing starts and home prices to label each state and metro area as expanding, at risk of recession, in recession or recovering. The index was developed by msnbc.com and Moody's Analytics, which
"Recovery" doesn't mean that an area's economy is above where it was at the beginning of the recession, just that the area has begun to dig its way out of the hole.
No metro area yet is showing "expansion," the most positive category; that label is triggered when a metro area's economy grows past its previous peak. Most of the recovering areas are far from that level.
Nearly one in three metro areas have started to recover, but most major cities are still in a moderating recession. (The full list is below.)
Of the nation's 384 metro areas 146, or 38 percent, were in recovery as of November, up from 31 percent in October, according to the Adversity Index.
A much larger group, 237 metro areas, were in a "moderating recession" in November, meaning their economies were still shrinking but not so severely as earlier this year.
That leaves just one metro area still spiraling downward in a full recession: Las Vegas.
‘Play’ the index
Here are several ways to explore this month's Adversity Index:
- The updated index will be published every month at . There is a lag of about six weeks, so December data will be out in February.
- An tells how the Adversity Index assesses the economy.
- This shows which counties are within each metro area.
State by state
Looking at the state-level data, three more states moved into the recovery category in November: Arkansas, South Carolina and Texas. It joined Alabama, Alaska, Idaho, Indiana, Iowa, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, South Dakota and Washington, D.C. Within those states some metro areas are still in "moderating" recession.
Nevada was the only state left classified as being in a full recession in November, according to the Adversity Index. All other states were in a moderating recession or recovery.
Metro areas in recoveryHere are the 146 metro areas where the Adversity Index shows a recovery under way in November. Several of the metro areas cross state lines and are listed more than once.