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AP Analysis: US Economic Stress Eased in February

Thursday, 14 Apr 2011 10:25 AM

Thanks to lower unemployment and fewer bankruptcies, the nation's economic stress edged down in February as all but five states strengthened from January, according to The Associated Press' monthly analysis.

Three states that were hit hardest by the recession and have suffered since — Florida, Arizona and Georgia — enjoyed the sharpest gains in February.

Unemployment declined or remained the same in more than three-quarters of the nation's 3,141 counties and in 43 states, the AP's Economic Stress Index showed. Bankruptcies declined in more than half the counties and in 41 states. Still, foreclosures rose in more than half the counties and in 27 states.

The AP's index calculates a score from 1 to 100 based on unemployment, foreclosure and bankruptcy rates. A higher score signals more economic stress.

The average county's stress score in February was 11, down from 11.2 in January. A year ago, the average score was 11.8. Under a rough rule of thumb, a county is considered stressed when its score exceeds 11.

Economists expect further improvements this year as employers step up hiring. The unemployment rate fell to 8.8 percent in March, the lowest level in two years. The rate has fallen a full percentage point in just four months.

"The job market is much better now than it has been," said Mark Zandi, chief economist at Moody's Analytics.

Zandi predicts economic growth this year of around 3.2 percent, up from 2.9 percent last year. But his forecast has dimmed from the 3.9 percent growth he had predicted for 2011 at the start of the year, before energy prices jumped.

The AP's index found that the only states not to strengthen in February over January were Maine, Nebraska, New Jersey, New Mexico and Wisconsin. All had higher or unchanged unemployment rates and, except for New Mexico, higher foreclosure rates in February.

The counties with the lowest economic stress in February had large proportions of workers in farming, mining, wholesale trade, information technology, finance and professional jobs, according to the AP's analysis. By contrast, counties with the highest stress had many workers in retail, real estate and support jobs.

Though squeezed by strained state budgets, the counties that are home to state capitals had an average stress score of 10.1 in February, well below the national average. In particular, the counties that are home to the capitals of North Dakota and Nebraska benefit from economies that are among the top 15 healthiest for counties with at least 25,000 residents.

Hughes County, home to South Dakota's capital, also was among the nation's healthiest, though its population is only about 17,000.

The healthier economies weren't limited to counties occupied by state governments. The four counties that surround Washington, D.C., and include tens of thousands of federal workers, had stress scores significantly lower than the national average.

Alexandria and Arlington counties in Virginia and Montgomery and Prince George's counties in Maryland had an average combined stress score of 6.6.

State capital counties, and those surrounding the nation's capital, are faring better than the rest of the nation despite spending cuts. In part, that's because government still generates many private-sector jobs for law firms, lobbyists and trade associations, said Jim Philipps, a spokesman for the National Association of Counties in Washington.

In addition, "restaurants, hotels and other private businesses that cater to white collar government policy-making centers are more likely to do well, or at least hang on, even in tough times," Philipps said.

As in previous months, the economically healthiest states were in the Plains and New England: North Dakota (5.21), Nebraska (5.93), South Dakota (6.16), Vermont (6.54) and New Hampshire (7.47).

Stress levels fell in February even in the five states with the highest stress scores. Nevada remained the most stressed state with a score of 21.16. It was followed by California (16.24), Florida (15.2), Arizona (14.57) and Michigan (14.35).

Two of those states, Arizona and Florida, saw the biggest drops in stress among all states in February.

Arizona added jobs in mining, transportation, finance, education and health services.

Florida's unemployment rate of 11.5 percent was much higher than the nation's 8.8 percent in February. But among all states, it added the third-most number of jobs — around 23,000 positions. The bulk of those job gains were in tourism and health care.

"What you're seeing in Florida is a labor market that is now just starting to get back on its feet," said Sean Snaith, an economist at the University of Central Florida.

"The metaphor I've been using for Florida's economy is a jumbo jet that is just at the start of its runway, and 2011 is that runway ... But the reality is we don't really take off until we get to the end of that runway in 2012, 2013."

Georgia added nearly 15,000 jobs in February in professional and business services, health, education, construction, transportation, tourism and manufacturing.

The most stressed counties with at least 25,000 residents were Imperial County, Calif. (30.77); Lyon County, Nev. (27.35); Merced County, Calif. (26.16); Sutter County, Calif. (25.99); and Nye County, Nev. (25.68).

The least stressed were Ellis County, Kan. (4.14); Buffalo County, Neb. (4.46); Arlington County, Va. (4.55); Ward County, N.D. (4.61); and Ford County, Kan. (4.68).

© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Thanks to lower unemployment and fewer bankruptcies, the nation's economic stress edged down in February as all but five states strengthened from January, according to The Associated Press' monthly analysis.Three states that were hit hardest by the recession and have...
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