Looking at the state-level unemployment numbers yields a significant and under-reported story. We’ve known for some time that innovations in reaching shale oil deposits in the Plains states – places like the Dakotas, Nebraska, Oklahoma and Iowa – have kept their unemployment rates low, even throughout the Great Recession.
On the other end of the scale, we’ve seen a recent trend of rising unemployment in the Northeast. Look at this chart. This includes the current unemployment rate in red, and the peak unemployment rate during the recession in blue. The state closest to its recession peak? New Jersey (Christie 2016!). Followed by New York (Cuomo 2016!). Followed by Pennsylvania and Connecticut. And Maine, Vermont and New Hampshire have seen their unemployment rates rise in recent months. Rhode Island hasn’t eroded, but they basically never had a recovery. Massachusetts, incidentally, is a major outlier here.
The St. Louis Fed finds the same uptick, reflected in the chart above. Look at that back end.
Many of these states have pretty symbiotic economies, with many people who live in one state and work in another. So what’s going on here? Bloomberg’s Evan Soltas looked into this a couple weeks ago, noting that “unemployment growth in the Northeast explains the entire 0.2 percent rise in national unemployment from March to August.”
This is a shift from the immediate aftermath of the 2009 recession. The Northeast performed relatively well in 2009 and 2010, largely as a result of a well-educated labor force, its mature economy and a smaller housing bubble in the region. At one point in late 2010, low unemployment in the Northeast kept the national unemployment rate 0.3 percentage points lower than it would have otherwise been [...]
The Northeast’s particular mix of sectors could be hurting it. The government sector, a large part of these economies, is pulling back sharply in New Jersey, Pennsylvania and Connecticut. The financial industry, long a mainstay of the region’s economy, also continues to shrink.
But finance (which is shrinking in terms of total hires, but growing in terms of compensation for those remaining, and in some cases profits) doesn’t account for the New England states, ex-Connecticut. And government spending has shrunk basically everywhere.
I haven’t seen a legitimate explanation for this, and considering the impact on the economy as a whole, it would be good to see some resources devoted to it. I mean, there does happen to be more than one large daily newspaper with lots of resources with offices in the Northeast, right? As well as a number of members of the financial press? Maybe if they got off Wall Street and looked at the rest of the region, they would have something interesting to report.





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I actually think people are missing MI’s rising unemployment as well.
Granted, it went down a tick this month, but I suspect that (and August’s big jump) are both tied to the way the car companies did their model years. But it’s still up 1% from its recent lows.
That’s way better than it was. But still generally in the wrong direction.
… “blue” states all?
Yes, I’ve noticed the comparative success here in MA.
Maybe we should hurry to secede and begin our own currency, before destitute RI shows up on our doorstep looking for a bailout.
The Bengazi debacle is the end for Obama. No one is going to support a President that denied protection for an ambassador. He’s toast!
There’s also the unmentioned corollary to that … a much much higher cost of living compared to years and decades prior
Lest anyone get the idea that Romney had anything to do with MA having more prosperity, he left his office at 47th in the country for job growth. He had run off to play with his Olympics toy and basically abandoned governing the state. He only used us for his portfolio to run for president anyway.
Speaking for myself, I give all the credit for success to Gov. Duval Patrick, who performed miracles to get us out of the hole Romney dug.
A lot of the success has to do with a surge in new Healthcare Tech. and Educational programs. I’m not sure if Obamacare kicking in had anything to do with it. I only recently came across info that leads me to wonder about that.
Don’t think so. Economy is too big of a problem to even see anything else.
But if that’s what some people want to vote on maybe Obama should tell the nation where the blame belongs, with the Mormon/Mafia/Cia.
I live in Iowa and am unaware of much fracking going on here, much less enough to account for any unemployment figures.
Your statement seems unrelated to my experience here, though it’s always possible that I am unrelated to my own experiences, lol.
Do you have some data to support that?
Correct me if I’m wrong but it’s corn and corn subsidies that have kept the mid-west farming unemployment low.
Fracking is in the Rockies, the upper mid west, the northeast and Texas.
Oh my God, with all this fantastic money-printing that you’ve been advocating so vehemently everywhere you’d think that wealth and jobs would just be shooting through the roof in America today.
Whatever could be wrong?
“These interventions which were exactly in the mould of bail out packages and quantitative easing measures currently instituted in the US and the EU, were geared at evoking a positive supply response and arrest further economic decline.”
-Gideon Gono, the governor of the Reserve Bank of Zimbabwe, explaining QE3
http://www.zerohedge.com/news/2012-10-16/head-zimbabwe-central-bank-explains-qe3
“Quantitive Easing” is for the benefit of the banksters and stripping value from non-elite savings. What stimulus it provides is incidental at best.
As for the real world? The effects of what little stimulus there actually was from the Recovery Act is now fading and the U.S. is still very much in the grip of the Osterity induced by the debt-ceiling hijacking.
WRT CT, by accounts I’ve seen state-level spending has increased. Malloy increased taxes and the budget grew in his budgets (elected Nov 2010 w/ his budgets running July 2011 to date).
And though I don’t have town-level spending details (169 municipalities), my town – Cheshire – is probably highly indicative of town-level spending. I’m in a GOP Council majority (professional manager, no elected mayor). The GOP has had the majority since Nov 2009, raising taxes approx 1 to 1.5% annually.
THOUGH… if state / fed funding decreased, taxes could’ve gone up while spending decreased. Not sure on the details. But my *guess* is that gov’t spending in CT has increased annually each of the past few years in the 0.1 to 2.0% range.
I live in NJ where Gov. “fatso” Chris Christie rules with an Ironfist and insists that the States rising unemployment and despair is all Obama’s fault. He does no wrong! I think it’s because the State is too small to hold all of us and him at the same time.
The Iowa economy has been helped by the strong farm economy. High commodity prices and $10000 an acre farmland build confidence.
Only good thing to come out of New Jersey’s near-record unemployment rate is the disappearance of those teevee commercials applauding Gov. Christie for putting New Jersey “on the right track”. I guess the cognitive dissonance of that was too much even for Christie supporters.
Christie has driven New Jersey OFF the tracks.
He has proposed a ridiculous 10% income tax cut for everybody. People at work are totally excited about it until I remind them for most of us it won’t even give us back any more than $80 a year, but they will spend another $3,000 a year on tuition at Rutgers when he uses that as an excuse to cut its funding even more.
And the way he talks to critics! When a 76 year old little old lady state senator questioned one of his buddies getting both a state salary and state pension, he said someone should “take a bat” to her.
Classy, Chris, so classy.