Is Your State Leading the Recovery?

Anna Williams
Posted

state economic recoveryIn the course of America’s economic recovery, some states are performing better than others.

While every region experienced economic declines during the recession—8 million total jobs lost throughout the country between 2008 and 2010—the extent of that damage varied across the borders. The South and the West (California and Florida in particular) took some of the hardest hits, while states like New York and Texas weathered much milder downturns.

A new analysis by the Federal Reserve of New York now shows how each state is faring during the economic recovery. Not surprisingly, employment rates are still suffering in some of those same states most affected in 2008—mainly, Florida and western states like California, Nevada and Arizona.

On the other end of the spectrum, Texas, New York, and some mid-Atlantic states are boasting strong numbers.

But what’s interesting about the analysis – and in contrast to past cycles of recession and recovery – is that the states’ rates of progress during this recovery are actually quite similar. Discounting resource-rich North Dakota as an outlier, the majority of states have actually shown quite similar employment growth since 2009.

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The Federal Reserve of New York can’t say exactly why this is, but does suggest two possible reasons. First, research has shown that a state that experiences sharp employment losses at first usually sees no long-term impact on its overall growth rate. Second, as federal fiscal policy has constricted, it’s likely that all 50 states are still dealing with similar struggles to raise employment.