The economy's health is most often measured in national terms. However, the recession and painfully slow recovery have not been felt the same across the country. The Brookings Institution tracks the health of the nation's 100 largest metropolitan areas. Late-stage Boomers and others thinking about where they want to retire should pay attention to how the recession has affected urban areas.
[See The Best Mutual Funds for 2010.] Economic growth ultimately provides the money that supports the quality of life we seek in our later years. That's obvious in the case of public works, utilities, and other infrastructure needs. Less obviously, it's also the case when it comes to the performing arts, museums, universities, and other programs that are vital to a community. And then there's the real estate market, which may be so important to persons on fixed incomes.
Brookings looks at four economic indicators in evaluating the relative health of urban economies -- changes in employment, unemployment rates, gross metropolitan product (GMP), and housing prices. It ranks the 100 areas on each factor, adds up the four scores and then provides an overall ranking. You can access the current version of the Metro Monitor and see how an urban area has performed in each category.
It's not uncommon to see fast-growing markets in the West and South dominate these kinds of rankings, but that's not the case here. Many northern areas held up very well during the recession. And, of course, the housing meltdown was particularly severe in many high-growth markets.
[See America's Best Affordable Places to Retire.] Here are the 10 metropolitan areas, in order, that topped the Brookings' report as of the end of 2009:
San Antonio-New Braunfels, TX
Austin-Round Rock-San Marcos, TX
Oklahoma City, OK
Buffalo-Niagara Falls, NY
Baton Rouge, LA
Little Rock-North Little Rock-Conway, AR
Omaha-Council Bluffs, NE-IA
Here are the 10 areas at the bottom:
Miami-Fort Lauderdale-Pompano Beach, FL
Boise City-Nampa, ID
Tampa-St. Petersburg-Clearwater, FL
Palm Bay-Melbourne-Titusville, FL
Cape Coral-Fort Myers, FL
Las Vegas-Paradise, NV
Brookings also developed another listing of the 100 markets that might be a particularly valuable gauge of their future health. It looked at the job creation patterns in the areas from the fourth quarter of last year back to the last time employment was that low. The time between these employment low points represents how many years of job creation have been lost in each market. The larger the number, the bigger the challenge an area faces in regaining its earlier economic footing. For the nation as a whole, 5.75 years of employment growth have been destroyed in recent years -- a major reason why forecasters predict such a slow recovery. But the outlook is just disastrous in many markets, particularly in the Midwest.
Here are the 10 urban areas with the greatest years of erased employment growth, and the number of years lost:
Youngstown, OH-PA; 26.5 years.
Detroit, MI; 24,75 years.
Dayton, OH; 24.25 years.
Cleveland, OH; 21.75 years.
Buffalo, NY; 15.5 years.
Milwaukee, WI; 15.25 years.
Grand Rapids, MI; 13.5 years.
Chicago, IL-IN-WI; 13.25 years.
Bridgeport, CT; 12.75 years.
Rochester, NY; 12.75 years.
Howard Wial, a Brookings economist and principal author of the Monitor, says it's important to split an area's job losses into two components -- how much occurred during the recession and how much took place during the previous years dating back to when a region last matched its current employment low.
For example, Rochester sported one of the biggest numbers of years of lost employment growth at 12.75 years. But this New York city also ranked as the nation's second best-performing market during the recession. Wial says the results may seem inconsistent but can be explained by noting that Rochester's job losses largely occurred before the recession. Since the recession began, its economy has held up relatively well. In some other markets, particularly in the Rust Belt, there have been troubling job losses both before and during the recession. "If the previous long-term trend is reinforced by the recession, you are on safer ground in projecting that trend into the future," Wial said.