Economic Hardship Index Holds Some Good News; Housing Concerns Persist
Turning on an economic recovery is not like turning on a light. Numbers improve and then, slowly, people begin to feel better and start to spend. In 2010 that means for any real economic improvement to have an impact on November’s elections it has to start manifesting itself in statistics such as unemployment and foreclosures – soon.
The latest set of numbers in Patchwork Nation’s Economic Hardship Index indicate that kind of slow, steady building may at least be possible. The hardship scores – comprised of a mix of unemployment, foreclosure and gas price data – improved for every one of our 12 county types. The average score fell from 30 to 25.
The unemployment rate fell for every county type in April – the latest set of county data available – and foreclosures were down in 10 of the 12 types.
There are a few major caveats in those numbers, however.
First, as any economist would warn, one month is not a trend. We have seen improvements in the Hardship Index quickly followed by declines.
Second, though the index is a monthly calculation, it is not necessarily a snapshot of recent economic history. It is made up of the latest county data, but those data lag. This index represents a picture of the U.S. economy as it was six to eight weeks ago.
And third, the last few days have brought a string of discouraging reports about the struggling housing industry. First, existing home sales declined slightly in May. Then new home sales tanked for the same month.
Still, improvement is improvement and this index offers good news.
Things Looking up in the ‘Burbs
Of all the county types in Patchwork Nation, the relatively wealthy Monied ‘Burbs are arguably the most critical to the U.S. economy. They hold the most people, about 69 million, and they have the disposable income to get the consumer economy going again. And the latest reading looks particularly good for them.
The hardship score in those counties fell from almost 34 to less that 28. Unemployment fell in April to 8.8 percent from 9.8 percent in March. And foreclosures in May sat at 1.8 per 1,000 homes. That number was at roughly two per 1,000 in April.
The numbers also looked good for a few other county types as well. The aging Emptying Nest counties and the small-town Service Worker Centers both saw hardship scores drop to below the national county average. And they saw their unemployment rates fall by more than a percentage point.
The unemployment rate in the Service Worker Centers is still high at 10.3 percent, but that is a marked improvement over the 11.6 of March.
Meanwhile, the rural, agricultural Tractor Country counties, which have ridden out the recession relatively smoothly, again have the lowest hardship score of the 12 community types at 20.4. The unemployment rate in those counties was under 6 percent in April, the lowest by far in the index.
Problems in the Boom Towns
Even in the good news in this index there are problems for some communities. For instance, look at the Boom Towns. Their hardship score fell to about 28 from 33 in May. That’s an improvement, but a smaller one than other community types.
The unemployment rate in the Boom Towns fell, but by less than other community types and even though the foreclosure rate also fell, it is still comparatively high – at two per 1,000 homes.
Worse, the Boom Towns are probably the places likely to be hit hardest by the latest round of bad housing news. As we have noted many Boom Towns were seeing increases in permits for new construction in recent months.
The Boom Towns also have been hotbeds of tea party membership activity. A Patchwork Nation analysis of registered tea party members in April found there were more in Boom Town counties per capita than anywhere else.
These places, in other words, have a lot of angry voters right now.
This month’s Hardship Index might look a little better for those towns, but the longer-term trend for housing is a big dark cloud over them. And it’s not likely to make them feel any less angry as November approaches.