Only 2 percent of US counties have recovered from Great Recession. Why?
The US economy is on the rebound, but a study by the National Association of Counties shows that for county economies, progress is occurring more slowly than national statistics suggest.
With the lowest level of unemployment since 2008, President Obama has recently been vocal in championing the recovery of the US economy. "American resurgence is real," he says. "Don't let anybody tell you otherwise."
However, a new study by the National Association of Counties shows that only 65 out of 3,069 counties in the US have fully recovered from the 2007-08 recession. That is only 2 percent of counties.
When assessing each county the study looks at four categories: unemployment rates, job growth, GDP and housing prices. Once a country has reached pre-recession rates it is considered "recovered" in that category, and to be fully recovered the county must have reached pre-recession rates in all four categories.
The study shows that 72 percent of the county economies have recovered in at least one category. Nearly all of the fully recovered counties are concentrated in Texas and the Great Plains, where local economies have been bolstered by the fossil fuel industry. But the difference can be stark from county to county. In Arizona, most of the counties have not recovered at all and the economy remains abysmal, despite neighboring generally wealthy Texas.
Across the country, the study found some general trends.
This past year was a year of economic rebound, with the national US unemployment rate falling to 5.6 percent in December. But unemployment rates have improved less than any of the other three categories studied. Some 95 percent of county economies still have not recovered their pre-recession unemployment rates. This is particularly notable in the Northeast and Midwest where there is still a significant jobs gap.
But there is hope that the gap may close in 2015. NerdWallet recently published a report on the best cities for job seekers in 2015 based on employment rates, median incomes, cost of living and growth of the working population in the last five years, and of the top 10 cities, six of them were in the Midwest.
The nation did experience significant job growth in the last year, which was evident at the county level as well. In 63 percent of counties, the economy saw more job growth in 2014 than 2013. The growth was particularly notable in medium-sized counties and in Western states. More than 40 percent of jobs created were in industries, such as oil mining, gas, manufacturing and construction, which pay above the county average wage, the National Association of Counties study shows.
And while jobs are rebounding, wages haven't necessarily followed. Wages declined in a little over 50 percent of counties in 2013, but rates have varied across the country. Where there was job growth in well-paying fields, that helped to stabilize the housing market and led to economic expansion in many counties.
The data indicates economic progress has been made, but national statistics tend the hide the uneven nature of the US economic recovery since 2008.