Economic Recovery: Which States Are Bouncing Back Fastest?

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People ride bicycles along the street in Stockton, California, U.S., on Thursday, June 14, 2012. The city may have to decide next week whether to seek Chapter 9 bankruptcy protection if talks with creditors that end on June 25 don't yield concessions. Photographer: David Paul Morris/Bloomberg via Getty Images
David Paul Morris/Bloomberg via Getty Images
On Wednesday, the Federal Reserve Bank of New York released an analysis of which states have done the best at recovering jobs lost in the 2008 recession and which are still struggling. On the surface, there doesn't seem to be a consistent trend: some red states, like Texas, are doing well; others, like Arizona, are lagging behind. Conversely, some blue states, like New York, have recovered nicely; others, like California, are still among the worst hit.

The Federal Reserve notes that a few factors seem to be at play: manufacturing-heavy states are still hurting, as are states that had a big real estate boom. On the other hand, as The Atlantic's Jordan Weissmann noted, resource-rich states like North Dakota seem to have had a softer landing.
Economic improvement
U.S. Bureau of Labor Statistics; Moody's Economy.com


Ultimately, though, there are two clear takeaways: first, things are looking up a bit if you live in Texas, West Virginia, New York, North Dakota, South Dakota, or Utah. And things are looking down if you're in California, Oregon, Nevada, New Mexico, Arizona, Missouri, Michigan, Ohio, Alabama, Florida, Delaware, Connecticut or Rhode Island.
Job loss and bounce-back
U.S. Bureau of Labor Statistics; Moody's Economy.com


The second takeaway is not quite as clear but even more significant: Unlike the 1990 recession, recovery from this one is almost universally anemic. In other words, while some of us have it better than others, the whole country is still hurting.

Economic Recovery: Which States Are Bouncing Back Fastest?

Nationally, the average gas price hit a recent high of $3.74 per gallon, nearly $0.50 higher than it was on Jan. 1. According to website GasBuddy.com, that's about a 14 percent increase since the start of the year.

The start of the new year also marked the end of the temporary 2 percentage point tax break on Social Security contributions. Once that part of President Obama's stimulus package expired, your paychecks went back to being 2 percent smaller. For the average family, that adds up to about $1,000 a year.

That same "average family," by the way, already earns only about $50,000 a year today. And according to CNN, that's about $4,000 less than you were earning in 2000.

A disconcerting report from Sallie Mae last week showed that about one-third of Americans working toward retirement are having to raid their retirement savings to pay for their kids' college educations.

According to a poll commissioned by Bankrate.com (RATE) in February, only 55 percent of Americans have enough money tucked away in their savings accounts and "emergency funds" to cover the amounts owed on their credit cards.

That Bankrate poll also revealed that among women in particular, 51 percent actually owe more on their credit cards than they have cash in the bank. Digging deeper into the data, Bankrate reported that while high earners are doing well, and generally flush, most people (59 percent) who earn less than $30,000 annually owe more on their cards than they have in savings. And these are the people least able to afford the high cost of credit card interest.

Speaking of earnings -- and jobs -- the same unemployment report that set Wall Street to cheering Friday can be looked at from a glass half empty perspective as well. The new, lower unemployment level of 7.7 percent is the best number we've seen since the Great Recession ended. However, The Wall Street Journal points out that 7.7 percent is very close to the worst unemployment ever got (7.8 percent) in the 1991 recession. Our best number in years is within a whisker of the worst they faced back then.

The overall workforce participation rate -- the percentage of Americans currently earning wages at all -- currently stands at just 63.5 percent. According to the Bureau of Labor Statistics, that's much worse than what we saw in the 1991 recession. It's the lowest we've seen since the recession that hit during the Carter administration.

Little wonder, then, that according to the Bankrate survey, people are increasingly concerned about "job security." Friday's unemployment report may suggest that the jobs market is on the mend, but most people (59 percent) say they feel no more or less  confident in their employment situation today than they did a year ago. Among those polled whose opinions have changed, 23 percent said they feel "less secure today" than they did a year ago, versus 19 percent who feel more secure.

That doesn't exactly jibe with the story that things are getting better.

It's great news for folks who own stocks, no doubt, and according to the Journal , more than 90 percent of people earning $100,000 or more do. But what about the rest of us? Fewer than 46 percent of Americans earning less than $50,000 are invested in the stock market -- and remember, "$50,000" is the average income in America today.

So yes, It turns out for the average American, things may not be getting better at all.

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Bruce Watson is DailyFinance's Savings editor. You can reach him by e-mail at bruce.watson@teamaol.com, or follow him on Twitter at @bruce1971.
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