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Some good news regarding unemployment numbers

Dante Chinni

Posted: 11.11.2009 / 8:46 AM PST

The economy is at a tricky juncture. Things are clearly better if you look at some indicators – such as last quarter’s 3.5 percent figure for gross domestic product. But that jump has not manifested itself in a meaningful way – at least not yet.

Consider the unemployment figures for Patchwork Nation in September (the most recent month available for county-by-county figures). There are signs that things are getting better – in some places – but the changes are not the kinds of things you write home about.

Nine of our 12 community types saw small drops in the unemployment rate – emphasis on small. The average drop in unemployment in those places was 0.24 percentage points. Still, this means that the majority of our community types have experienced improvement in unemployment over the past few months.

Remember that unemployment is a lagging economic indicator: It will probably be among the last things to improve. So if we are in the early stages of a recovery, what does it look like where unemployment is concerned? We’ve found a few trends of note using data from the Bureau of Labor Statistics.

Urban areas are lagging

Only three of our community types did not see improvement in this set of unemployment numbers. Two of them are our most densely populated types – the big-city “Industrial Metropolis” counties and the wealthier “Monied ’Burbs.”

The numbers look particularly bad for the “Industrial Metropolis,” which had a rate of 10.6 percent in September. That’s the second highest among all our types.

Our thinking on the “Industrial Metropolis” locales, which are very diverse, is that they will experience a few different recoveries. The wealthy residents in these places will start to experience better times first as the stock market turns around – which it has been. It’s above 10,000 at this writing. The poor, on the other hand, will lag behind, waiting for a broader-based turnaround.

The numbers for “Industrial Metropolis” may look different for October. But these early figures suggest that even the upper-end recovery in these places may be slow in coming.

The flat 9 percent rate of unemployment for the “Monied ’Burbs” seems to indicate the same thing. These are the counties where many of those professional downtown office workers live. For the moment anyway, their unemployment number isn’t moving downward.

That could have significance for retail sales in the coming months. The “Monied ’Burbs” are full of people who spend the money that drives the economy, and these people may be cautious with their spending until things look better.

Agricultural America continues to thrive

On the opposite end of the spectrum, the rural and agricultural “Tractor Country” counties continue to thrive. The unemployment rate in these places was only 5.5 percent in August, and in September, the number dipped to 5.3 percent.

“Tractor Country,” which essentially functions in the framework of a different economy, may end up mostly avoiding the recession. However, farmers here are concerned about longtime drags on commodity and dairy prices.

Meanwhile, the small-town “Service Worker Centers” are showing improvement. Their unemployment rate fell by 0.3 percentage points to 9.5 percent for September.

Those communities have been rocked especially hard in the downturn, and the improvement is welcome news. But things aren’t completely sunny yet.

Last week, I traveled with a television crew from the “NewsHour With Jim Lehrer” to Lincoln City, Ore. – a “Service Worker Center” on the Pacific coast. We talked with a lot of local business owners. Many were just hanging on, and now, the tourism off-season is approaching. They sensed an improving economy, but they had yet to see any real changes locally.

Longer term

When the economy does enter full recovery mode – which it will at some point – there are questions about what lasting impacts will follow.

What about the urban poor in the big cities? What happens to those who had jobs in the shrinking manufacturing industry? Maybe the biggest question: Will there be longer-term impacts on wages and the standard of living in the 12 community types – and in the nation as a whole? Many people in the communities we visit are concerned about that.

Those are questions we will examine.

• Since this is a blog, if you have ideas for ways to track data on these points, I’d be interested in hearing from you. Please leave comments below or feel free to e-mail me at dantechinni@gmail.com.