Recession geography

The idea of comparing national economic statistics using data for the entire U.S. (population 300+ million) versus, say, New Zealand (population 4+ million), has always struck me as being kind of pointless. As shown in this cool graphic from The Economist, the U.S. is really many different economies with many different sets of statistics.This report in the current issue fills in the details:

YOU won't hear the R-word much in the modest governor's mansion in Helena, Montana. The occupant, Brian Schweitzer, insists that Montana's economy is in better shape than it has ever been. It has had one of the fastest rates of job growth in the country. The state is prospering on the back of booms in mining and farming, as well as steady growth in tourism. Paul Polzin of the University of Montana forecasts that the state's economy will grow by 4.1% this year, the fifth consecutive year of growth above 4%. “We've been searching for realistic doomsday scenarios,” he says, “and we just can't find any.”

Go to Michigan, by contrast, and it is hard to find anything but gloom. The collapse of America's car industry, coupled with a nasty subprime mortgage bust, has left the state reeling. It has the highest unemployment rate in the country (7.6%) and the third-highest foreclosure rate, and was the only state to lose a large number of jobs in 2007.
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California's mighty economy is visibly wobbling. In some cities, house prices are falling at double-digit rates and the unemployment rate has jumped from 4.8% to 6.1% in the past year, an increase twice as steep as the national trend. In Los Angeles, the weak dollar and slower consumer spending have sharply cut import-traffic through the port.
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Move inland from the coasts and away from the industrial Midwest, however, and the picture, for now, looks less grim. A belt running from Texas north-west across the Great Plains and the Rocky Mountains has been doing particularly well, thanks to soaring exports and high commodity prices. Ethanol subsidies and “agflation” have brought a bonanza to the farm states.

Just like a few years ago, when many looked at the national statistics for home prices in the U.S. and concluded there was no housing bubble, in the period ahead they'll probably look at the national statistics again and note the mildness of a recession that is much, much worse in certain areas.