Regional recessions

- Recessions come in lots of shapes and sizes. We often think of them as national or international events, if you watch CMBC or read The Wall Street Journal, they talk about these enormous global downturns. Like the Great Recession, or The Great Depression. But a recession can be a much more targeted event in the way it hits, let's talk about one example of a more concentrated recession, a regional recession. A recession can hit a specific region, or even an individual city. During the Great Recession, Detroit was probably the most dramatic example with ambulances taking an hour to arrive on the scene, houses being sold for $5,000, more than half the population gone, and old neighborhoods turning into overgrown fields. A less publicized example that I know personally is Fall River, Massachusetts. I grew up just outside this old mill town which was once known as Spindle City! Because it was the most important textile city in the world around the time of the US Civil War. But the textile industry left and the city has struggled to adapt economically, essentially it fell into a recession, it's never fully recovered. So even when times are good there are often limits to how good things are. Over the last 25 years the healthy job market of Austin, Texas, stands in stark contrast to the lack of jobs in Detroit and Fall River. As you can see in this chart comparing the unemployment rate of these three cities, the unemployment rate for Austin has always been below Fall River and Detroit. And take a look at this map, you can see here the unemployment rates across the United States and you see that a recession is not a monolithic thing. In 2010, just after the Great Recession, when unemployment was as its worst, some parts of the United States were doing fine. Some states in the Mid West had an unemployment rate below 6% while a number of other states had an unemployment rate above 11%. That's a really big difference in job markets. And it was because there were bigger housing bubbles in the South East, and out West. Those areas with big housing booms suffered big housing busts and they were more negatively impacted than other areas. Even though the whole country was in recession, some regions experienced a deeper and longer recession, and that's what a regional recession looks like. What are the economic conditions like where you live? Is the job market strong, check out the Bureau of Labor Statistics website at bls.gov for information about your regional job market.