Among Coastal States, New York and Massachusetts Lead Economic Rebound

As the national economy sputtered in early 2011, the government released newly compiled data from last year showing a pattern of broad, but weak, nationwide economic growth in 2010. A June release from the Commerce Department’s Bureau of Economic Analysis breaks out the growth data by state. Among coastal states, New York led the pack with 5.1% growth in gross domestic product (GDP) last year, second in the nation only to North Dakota’s much smaller economy. Massachusetts was not far behind New York at 4.2% (fourth highest in the country), and North Carolina also fell into the top quintile of states, posting 3.4% growth in 2010. The BEA’s June 7 report on state-by-state results is posted on line (“ Economic Recovery Widespread Across States In 2010”). Growth in other coastal states was distributed across the lower rankings, with no clear regional pattern. Mississippi, Florida, Georgia, Delaware, and New Hampshire lagged at the back of the pack, with annual growth rates ranging from 1.1% to 1.4%. Alabama, South Carolina, New Jersey, and Maine fell into the middle quintile, with growth in the 2.0% to 2.6% range. Texas, Louisiana, Virginia, Maryland, Rhode Island, and Connecticut were in the second rank from the top, posting growth between 2.6% and 3.1%. But that was 2010. It’s now mid-2011, and economists, including Federal Reserve Board Chairman Ben Bernanke, are warning that the nation’s recovery is slowing, and could even stall. Observers are focusing on the key issue of jobs and employment. Here again, the latest state-by-state numbers show variation among the coastal states. And not surprisingly, some of the states that have led in growth are also showing the best employment picture. The Labor Department map display of state unemployment rates, with accompanying table, shows Massachusetts with 7.6% unemployment in May (“ Local Area Unemployment Statistics Map,” Bureau of Labor Statistics). The New York rate is at 7.9%. Those are historically high unemployment rates, but they’re much better than the situation in Florida (10.6% unemployment), South Carolina (10.0%), or Rhode Island (10.9%). But the state-by-state numbers obscure local variations within each state. In Massachusetts, for example, job growth and employment is driven by the high-tech economy centered in Boston, with its many universities and research and development centers. Town-by-town numbers published by the state government show much higher unemployment rates in some other locations, particularly, it turns out, in some coastal towns. Month over month, all the state’s statistical areas added jobs between April and May, the state reported (“ Latest Job And Unemployment Estimates For Local Labor Markets In The Commonwealth”). But year-over-year, the state reported “seasonally unadjusted unemployment rates were down in eight labor market areas, unchanged in six areas and up in eight areas.” And the town-by-town table showed stubbornly high unemployment in the Boston suburb of Lawrence (16.1% unemployment), as well as in the coastal city of Fall River, close to the Rhode Island border (14.9%) — both former mill towns whose economies have struggled for decades. The slight drop in Fall River’s unemployment, from 15.1%, wasn’t really good news, reported the Fall River Herald News (“ Fall River has frustrating drop in unemployment rate,” by Grant Welker) — because the decline was caused by people dropping out of the job search, not by an increase in jobs. Several towns on Cape Cod, where employment depends heavily on the summer tourist trade, posted high unemployment in May, but showed the volatility characteristic of that market. Provincetown, at the far end of Cape Cod, went from 28% to 19% unemployment in the course of one month, while nearby Truro’s rate dropped from 17% to 11%. Summer will likely bring further drops as the Cape’s vacation industry cranks up. But for workers in troubled former industrial towns like Lawrence and Fall River, where rates barely budged from April to May, the state’s lowered unemployment rate comes with a down side. Under the rules of the stimulus package passed by Congress, states are eligible for Federal funding for extended unemployment insurance benefits — but only while their jobless rates remain high. In Massachusetts, the improving picture means that the state’s unemployed workers will face the expiration of their unemployment benefits sooner, the Boston Globe reports — even in towns with persistently high unemployment (“ Extra jobless aid is cut in Mass.,” by Kaivan Mangouri).