Sunday, August 23, 2015

Recessions Are Uneven

This graphic is a little dated, but it illustrates a point I have to make every time we suffer through a new recession: business cycles are not geographically even.


I’m most interested in the top two panels. The top one shows a hallmark of the Great Recession of 2007-9. It was primarily two areas: 1) the west coast, and 2) a diagonal from the midwest down through Florida. That’s not to say that other areas weren’t hurting, but the 10% cutoff for shading emphasizes who was getting it the worst.

Flash forward five years, and there have been big improvements (it’s normal for it to take several years). The midwest and southeast are largely healed. The exception is the smaller urban areas in Illinois (think reruns of Roseanne to get a feel for those places). Illinois has been very badly run for decades, and this supports that. Most of the west coast is doing better too. The exception is the central valley of California, and this may be due to ongoing drought.

And, even when the economy is doing well, there are always pockets of poor performance: 1) south Texas is habitually weak, 2) I’m not sure what the problem is with that area of Arkansas, and 3) the shading in southern New Jersey is the collapse of the gaming industry their due to competition from other areas (you may have heard of Trump closing his casinos there).

You can read the whole thing, entitled “Help Wanted Signs Are Popping Up in U.S. Cities” in the April 28, 2014 issue of Bloomberg Businessweek.

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