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Local unemployment dynamics in the Great Recession


The U.S. labor market as a whole has recovered from the effects of the recent recession: The national unemployment rate was 10% at the end of 2009, but now stands at 4.7%, a number FOMC participants consider to be close to its long-run value. Despite this overall recovery, regional patterns of recession and recovery differ, with some areas better off and some worse than average. These three GeoFRED maps show county unemployment rates at their pre-recession trough (December 2007), at their recession peak (October 2009), and at the time of the most-recent estimate (April 2016).

In December 2007, about 21 percent of counties had rates below 3.5% and about 66 percent of counties had rates below 5.5%. Certain regions experienced slightly higher unemployment rates, particularly the West Coast, Central South, and Upper Peninsula of Michigan. The Midwest and South (from Minnesota to Texas) had the lowest unemployment rates, with most rates below 3.5%.

By October 2009, only 15 percent of counties still had unemployment rates below 4.4%: Most counties had rates between 7.5% and 15.5%, and about 10 counties had rates greater than 20.5%. The regions with higher pre-recession unemployment rates also had higher levels of unemployment during the recession. And a strip of counties in the Northern Midwest maintained unemployment rates below 4.5%.

Today, some county-level unemployment rates remain slightly above their pre-recession trough, although most have recovered or even improved beyond pre-recession levels: 21 percent of counties have unemployment rates below 3.5% (the same fraction as in December 2007); 68 percent of counties have rates below 5.5% (slightly better than the pre-recession trough); and nine counties have maintained extremely high unemployment rates—above 20.5%. Newly developed regions in the West such as Arizona, New Mexico, and Utah have unemployment rates that are higher than the pre-recession trough, whereas Midwestern rates are lower than their 2007 levels.

How these maps were created: Select GeoFRED’s “Build New Map” option at the top right of the home page. Use the “Tools” menu on the top left to set “Region Type” to “County.” Type “Unemployment Rate” in the search box. Set the frequency to “Monthly” and the units to “Percent.” Select the desired date from the drop-down menu. You can select the color scheme for your map under “Choose Colors”: We used “Single Hue Red.” Finally, under “Edit Legend,” change the number of color classes to 9 and set the interval values to 3.5, 4.5, 5.5, 7.5, 9.5, 11.5, 15.5, 20.5, and 29.5.

Suggested by Maximiliano Dvorkin and Hannah Shell.



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