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The Great Recession’s regional effects

How have different industrial compositions affected unemployment for Census regions?

Every corner of the U.S. was hard-hit by the Great Recession, but the varying makeup of local economies resulted in different effects on individual cities, states, and regions. Areas that are reliant on economic necessity—say, healthcare and waste management—may fare better during economic downturns than areas that are reliant on economic prosperity—say, tourism and construction. In 2008, the recession particularly disrupted the construction industry. According to the Bureau of Labor Statistics, the percentage of jobs lost in that industry, 19.8%, exceeded those of all other nonfarm industry supersectors.

FRED can help us see the recession’s effects on the four U.S. Census regions: Midwest, Northeast, West, and South. The annual percent change in unemployment varied most in 2008, where unemployment increased nearly 40% in the West but increased only 19.6% in the Midwest. The map below shows that some of this variation may have been the result of job losses in construction. Western states experienced declines of over 8% in the number of construction employees from 2007 to 2008. The rest of the U.S. fared better, with some Midwestern and Southern states even seeing increases in the number of construction employees.

The relatively small increase in unemployment in the Midwest may be a result of its more agriculturally based economy, which wasn’t initially hit as drastically as the shock-prone industries of tourism and construction, which are more prominent in the West. The years 2009 and 2010 saw less-significant differences in unemployment changes among regions. But data from 2011 show the continued comparative resilience of the Midwest, where the decrease in unemployment was over 11%, compared with the other regions’ 4% to 6% range. This variation in rates of recovery may also be attributable to industrial makeup: Research from the St. Louis Fed has analyzed the construction industry’s contribution to the slow overall recovery and compared it with the manufacturing industry. Research from the Minneapolis Fed notes that the construction industry took longer to recover from the recession than other industries in part because of workers’ reluctance to return to construction jobs.

How this graph was created: In FRED, search “unemployment rate census region.” Check the boxes next to the seasonally adjusted series for each of the four regions and click “Add to Graph.” Next, click “Edit Graph” and change the units to “Percent Change.” Click “Copy to all.” Modify the frequency of each line to “Annual.” Next, click the “Format” tab and change the graph type to “Bar.” Finally, adjust the dates on the graph to show from 2007-01-01 to 2011-01-01.

How this map was created: The original post referenced an interactive map from our now discontinued GeoFRED site. The revised post provides a replacement map from FRED’s new mapping tool. To create FRED maps, go to the data series page in question and look for the green “VIEW MAP” button at the top right of the graph. See this post for instructions to edit a FRED map. Only series with a green map button can be mapped.

Suggested by Maria Hyrc.

View on FRED, series used in this post: CMWRUR, CNERUR, CSOUUR, CWSTUR

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