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Rolling recovery reaches New York, L.A.

The recovery has finally begun in the nation's two largest metro areas, New York and Los Angeles, according to the latest Adversity Index data from and

Besides New York and Los Angeles, other additions to the economic recovery room include Oakland; Phoenix, Flagstaff and Tucson, Ariz.; Portland, Ore.;  Yakima, Wash.; Shreveport, La.; New Haven, Conn.; Albany, N.Y.; Fairbanks, Alaska; Green Bay, Wis.; Knoxville, Tenn.; and Winston-Salem, N.C. The assessments are based on data from March.

Of the nation's 384 metro areas, 240 or 63 percent are now listed as in "recovery," the second-highest category in the Adversity Index, up from 205 in February. Another 143 areas were listed in a "moderating recession," meaning the decline continues, but not so fast as earlier.

Only one area has made it into the highest category, expansion: the area of Jacksonville, N.C., around Marine Corps Base Camp Lejeune. No metro area is still in a full-bore recession, the lowest category in the index, which tracks states and metro areas based on employment, industrial production, housing starts and home prices.

Although 240 metro areas are in recovery, that doesn't mean they are "recovered," with an economy above where it was at the beginning of the recession. But they are starting to dig their way out of the hole.

The Adversity Index was created by and Moody's Analytics to track the economic fortunes of states and metro areas. Each month, the Adversity Index uses the latest data to label each area in one of four categories: expanding, in recovery, at risk of recession or in recession.

You can follow the fortunes of each metro area in the nation on our , which gives details for each metro area and state for the past 15 years.

The 20 biggest: Mixed, but improving Here's the economic status for the 20 most-populous metro areas:

  • New York-White Plains-Wayne, N.Y.-N.J., in recovery for the first time in March.
  • Los Angeles-Long Beach-Glendale, Calif., recovery for the first time in March.
  • Chicago-Joliet-Naperville, Ill., still in a moderating recession, meaning the economy is declining, but at a slower pace.
  • Houston-Sugar Land-Baytown, Texas, recovery since November 2009.
  • Atlanta-Sandy Springs-Marietta, Ga., moderating recession.
  • Phoenix-Mesa-Glendale, Ariz., recovery for the first time in March.
  • Dallas-Plano-Irving, Texas, recovery since November 2009.
  • Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.Va., moderating recession.
  • Riverside-San Bernardino-Ontario, Calif., recovery for the first time in March.
  • Philadelphia, Pa., moderating recession.
  • Minneapolis-St. Paul-Bloomington, Minn., moderating recession.
  • San Diego-Carlsbad-San Marcos, Calif., recovery since January.
  • Santa Ana-Anaheim-Irvine, Calif., recovery since February.
  • Nassau-Suffolk (Long Island), N.Y., recovery since February.
  • St. Louis, Mo.-Ill., recovery since August 2009.
  • Tampa-St. Petersburg-Clearwater, Fla., moderating recession.
  • Baltimore-Towson, Md., moderating recession.
  • Seattle-Bellevue-Everett, Wash., moderating recession.
  • Denver-Aurora-Broomfield, Colo., recovery since December 2009.
  • Oakland-Fremont-Hayward, Calif., recovery for the first time in March.

Nationwide, in terms of the number of metro areas in recovery, there were none from October 2008 through July 2009 when the recession was at its height. Last August the first 79 metro areas emerged into recovery, a number that has risen gradually to 240 in March.

Little job growthStill, the gains have been confined mostly to manufacturing and housing, not employment.

  • Employment: Out of 384 metro areas, only 23 metro areas show gains in jobs when the three-month period ending in March is compared with the same period a year earlier.
  • Home-building: In housing starts, 328 areas show an increase. (Home prices lag other components in the index by several months.)
  • Manufacturing: In industrial production, 342 areas increased.

The Adversity Index was designed to be a slow-moving indicator. It looks for sustained changes, so any one-month jump is likely to be smoothed out. This means the index is probably slow to call a beginning or end to a recession.

State by state
Painting with a broader brush by looking at the economies of entire states, five more moved into the recovery category in March, for a total of 30. The new five are Arizona, California, Delaware, New York and Oregon.

Within those states, of course, some areas are doing much better than others, and the economy of a few large metro areas can dominate a state's numbers. That's why our reporting on the Adversity Index focuses mostly on the metro areas.

‘Play’ the index
Here are several ways to explore this month's Adversity Index:

  • Our shows the economic health of every state and metro area. You can "play" the map on this page 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 , where you can read all the articles in this series. There is a lag of about six weeks.
  • An tells how the Adversity Index assesses the economy.
  • Many areas include multiple counties, and many cross state lines. This shows which counties are within each metro area.

A common question
How can some of the metro areas on our map be in "recovery," if the statistics shown for that area are negative?

The answer: The Moody's labeling of each area's status (in recession, in recovery, etc.) compares six-month periods. But the stats shown on the map are one-year comparisons. (In both cases, .)

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 conditions will be true at the same time in those areas that are just beginning to recover: The numbers will be better than they were six months earlier, so the metro area will show up in the recovery category, but at the same time the year-over-year stats will still be negative.

This paradox will continue as long as areas recover, slowly, from a deep recession.