Hardship Index Shows Joblessness Drops, Foreclosures Increase
In an election year, the party in power ultimately lives or dies on the state of the economy — or so goes the conventional wisdom. So, with a little less than six months before voters go to the polls, how does the economy look? It depends on your measuring stick.
Across the 12 types of counties identified in Patchwork Nation, there are two trends in the latest data: Unemployment is slowly, steadily dropping; foreclosures are rising. The big question hanging over the economy and the election is: Will one of those trends win out by fall?
Overall, the Economic Hardship Index, a collection of economic factors including unemployment foreclosures and gas prices, climbed to 30.5 in May, up from 21.5 in April. But that was due to the latest set of foreclosures numbers, which look uniformly bad. They rose in every community type between February and April — and in some places fairly sharply.
Even though the trends are uniform across all 12 Patchwork Nation community types, there are some strong differences in how those trends are playing out.
Where Housing Is Headed
When it comes to the housing market, the counties that naturally lean Republican are suffering a lot of the pain.
The four community types that saw the biggest percentage increase in foreclosures from February to April were the Military Bastions, Emptying Nests, Boom Towns, and Evangelical Epicenters. All of them saw foreclosure rates increase by more than 35 percent in that time.
But no community type was particularly immune from the increase — every type had a double-digit percentage increase in that period, except for rural agricultural Tractor Country, which has missed a lot of the pain from the entire recession.
Hardship, Foreclosures and Unemployment Over Time
Patchwork Nation is primarily focused on comparing different types of places in America, and while the differences are often revealing, the similarities can be just as telling.
The fact that these foreclosure increases are spread across all the community types shows just how deep the housing market troubles run. Some types are clearly faring better than others — with lower rates per 1,000 homes — but the increases are troubling. They suggest the housing troubles may have a ways to go before they end.
And remember this set of numbers came before the government tax breaks for home buying ended in April. Those breaks helped get homes off the market and helped struggling homeowners sell.
The changes in unemployment have also been widespread. In most of our community types, unemployment rates have improved for two consecutive months. And unemployment improved in every single county type in March (the latest county data available). But the improvements have been slight.
Unemployment dropped by about three percent in March in the wealthy Monied ‘Burbs. And that’s three percent – not three percentage points – so in real terms it fell to 9.86 percent in March from 10.16 percent in February. That’s not insignificant, but it’s also not the kind of change that can be easily felt.
There are bigger drops in other places — unemployment fell by about 7 percent in the Mormon Outposts for example — but overall the unemployment rates are still quite high in some of the county types in Patchwork Nation.
In four types, the unemployment rate is still over 10 percent. Minority Central, Evangelical Epicenter, Industrial Metropolis and Service Worker Center counties have unemployment rates ranging from 10 percent to 12 percent.
Critical Next Months
In short, when you look at all the elements of the Economic Hardship Index together, it looks as though a fight is going on between two pictures of the U.S. economy.
The job picture, which has been so awful for so long, is slowly climbing back and could carry the economy on its back. But the housing picture, which helped bring on the economic downward spiral, is saying “not so fast.”
In terms of the coming 2010 midterm elections, the next few months will be extremely important.
If the unemployment picture continues to improve — and if the improvement quickens in places like the wealthier more populous areas like Monied ‘Burbs and the Boom Towns — the fall might not look as bad for sitting Democratic politicians.
If the housing market’s woes continue and grow, it could stall out or at least dull the impact of those drops in unemployment, helping the GOP.
Then again, the economy could keep limping in its current state, creating an electoral environment that looks a lot like the economy itself — a muddled, messy mix of arguments.