The broad U.S. economy appears to have escaped a recession, most mainstream economists say, but that's of no comfort to most parts of the country, where economic pain is being felt almost everyplace but oil-rich Texas and Oklahoma.
One respected economic forecaster estimates that 170 U.S. metropolitan areas could be considered technically in recession, and another 116 are at risk of economic contraction.
The national economy reflects the sum of many regional and local economies, so at any given time there are always winners and losers. But today's slowdown is unique.
It isn't driven by the usual business cycle. It was brought on by severe nationwide problems in the housing sector, which have spread to banking and finance, drying up consumer lending.
Sign Up and Save
Get six months of free digital access to The Charlotte Observer
That's why a lot of metro areas are losers right now, even while the broader economy technically isn't in recession.
“Usually in national recessions, there are one region or two that get completely crushed, and everyone else holds up well. … That's not the case this go-around,” said Mark Zandi, the chief economist for Moody's Economy.com, a forecaster in West Chester, Pa. “The only big economy that has held together well is Texas. Everywhere else it is shades of black.”
The culprit in many regions is clear.
“The two key common denominators are housing and autos, but it is broadening out now, and financial services are becoming more of a problem in more states” because of the growing pullback in consumer lending, Zandi said.
Moody's Economy.com compiles a monthly state-by-state list of metropolitan areas and gauges whether they're in expansion, at risk or in recession. Moody's latest reading shows that nearly two-thirds of the nation, based on economic statistics, is in or very near recession.
Using June data, Moody's estimates that 170 metro areas are in recession. Together they make up about 43 percent of metropolitan employment nationwide. That's up from 142 metropolitan areas in May.
Moody's research suggests that 116 metro areas are at risk of recession, with about 25 percent of metropolitan employment nationwide.
That leaves roughly 32 percent of the nation's biggest metro areas, 94 of them, with expanding economies. In May, 106 metropolitan communities were expanding.
The biggest losers include industrial Midwestern states such as Ohio, Michigan, Indiana and Wisconsin.
Deep problems in auto manufacturing, exacerbated by bad bets on SUV production as gasoline prices rose, have hurt those states. The housing crunch has made a bad situation worse.
“Michigan is either the weakest or second-weakest economy, mostly due to the misfortunes of the auto industry,” said Mark Vitner, senior economist for Charlotte bank Wachovia Corp. “Aside from Michigan, the rest of the Midwest is generally struggling with weakness in the auto sector and other consumer durable goods.”
Other obvious losers include Florida, Nevada and Arizona, states that are experiencing the biggest collapse in home prices after the biggest run-up in prices during the boom of 2001 to 2005. Their turnarounds will depend largely on when the housing freefall bottoms out.
Just when that will be remains a vexing question.
“What's scary to me is I can't get a handle on that,” said Miami Mayor Manny Diaz, whose city is among the hardest hit by the housing slump.
The nation's most populous state, California, is a mixed bag. It has four metro areas in expansion, the two big agriculture centers of Bakersfield and Hanford and tech-heavy San Francisco and San Jose.
Most of the rest of the state is suffering hard times because of the severe housing crisis, with 16 metro areas in recession and eight at risk.
As for hard-hit Florida, , only one metro area in the Sunshine State – the Sebastian/Vero Beach area – is expanding. Areas such as Bradenton, Tampa and Miami are considered in recession, while tourist-filled Orlando is at risk of recession.
States or metro areas that make up the few winners in today's national economy tend to have their fortunes hitched to energy or technology. High oil prices have benefited Texas and parts of Oklahoma.
The health-care industry and higher education are two of the few job gainers in the national economy, and health- and education-heavy economies such as Massachusetts and Maryland have largely been in expansion. Export-driven metro areas such as Seattle and Dallas also are doing well. Washington state benefits not only from exports of Boeing's aircraft but also natural-resource commodities such as timber and produce.
“Anything related to technology and aerospace has held up, because that's export-oriented and kind of fits the story line,” Zandi said.