Are You Better Off? Depends On Where You Live

Since Obama took office, Rust Belt workers have rebounded

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When Mitt Romney asks voters if they're better off than they were four years ago, the message may play better in Arizona than in Michigan.

That's because by one key measure, many Rust Belt residents have seen more of an economic boost since President Barack Obama took office than workers in other parts of the country. A U.S. News analysis of Labor Department data finds that nine of the ten cities that have seen the largest net improvements in the unemployment rate since January 2009, when the president took office, are in the Rust Belt. Meanwhile, five of the cities that have posted the largest net unemployment increases are in the West.

According to Labor Department data, these are the 10 metropolitan areas that have seen the largest net declines in the unemployment rate since January 2009.

Metro Area Jan. 2009 Jobless Rate Aug. 2012 Jobless Rate Change
Elkhart-Goshen, Ind. 17.2 9.1 -8.1
Sandusky, Ohio 11.0 6.7 -4.3
Monroe, Mich. 12.2 8.0 -4.2
Holland-Grand Haven, Mich. 10.4 6.8 -3.6
Flint, Mich. 12.9 9.4 -3.5
Muskegon-Norton Shores, Mich. 12.3 9.0 -3.3
Youngstown-Warren-Boardman, Ohio-Penn. 11.4 8.1 -3.3
Toledo, Ohio 10.8 7.6 -3.2
Lima, Ohio 10.1 7.3 -2.8
Danville, Va. 11.1 8.3 -2.8

Source: Bureau of Labor Statistics. Data are seasonally adjusted.

And these are the metro areas where the jobless rate has seen the largest net growth:

Metro Area Jan. 2009 Jobless Rate Aug. 2012 Jobless Rate Change
Yuma, Ariz. 21.1 27.1 +6.0
Ocean City, N.J. 9.9 13.9 +4.0
Vineland-Millville-Bridgeton, N.J. 10.7 14.3 +3.6
Grand Junction, Colo. 5.6 9.2 +3.6
Atlantic City-Hammonton, N.J. 9.8 13.1 +3.3
Pueblo, Colo. 7.9 10.9 +3.0
Yuba City, Calif. 15.0 17.8 +2.8
Kennewick-Pasco-Richland, Wash. 6.6 9.3 +2.7
Fayetteville, N.C. 7.7 10.4 +2.7
Brownsville-Harlingen, Texas 8.4 11.0 +2.6

Source: Bureau of Labor Statistics. Data are seasonally adjusted.

Why some regions have fared so much better than others is in part a function of timing. The recession didn't hit the nation all at once, notes Jim Diffley, managing director of the U.S. Regional Economic Group for forecasting firm IHS Global Insight.

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"Depending upon the point in the cycle each state or metro was at right at that point in 2009, you'll get different results," he says. "One thing about the Rust Belt is it actually headed into recession before much of the rest of the country."

For example, the jobless rate rose sharply in early-to-mid-2008 in the Flint and Elkhart metro areas, but in Grand Junction, that spike didn't happen until late 2008 to early 2009. That means that starting the window in January 2009 misses a lot of Flint and Elkhart's spikes, while it captures a lot of Grand Junction's job losses.

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The divergence between regions is also about the story of manufacturing. Manufacturing took a nosedive when consumers pulled back their spending, especially on cars and other durable goods. That created pent-up demand, which made for more spending on those goods as consumers finally had the money to spend again. As manufacturers had shed so many jobs, says Diffley, it meant that they had to bulk their workforces back up as demand grew again.

Aside from that, employment has been slow to improve in some places simply because of a depressed housing market. Red tape can make this process worse. In New Jersey, for example, a slow foreclosure process has been blamed for keeping home prices low and slowing down the housing recovery.

It's also important to note that current unemployment rates matter. The jobless rates in the Grand Junction (9.2 percent) and Kennewick (9.3 percent) metro areas, which have grown over this period, are still lower than in Flint (9.4), where the rate has fallen significantly.

"It's great for unemployment to decline, but we're still in painful territory in a lot of these places," says Alec Friedhoff, data manager for the Metropolitan Policy Program at the Brookings Institution. According to the Institution, unemployment rates are above 6 percent in all but 12 of the 100 largest metro areas.

He also adds that unemployment rates can be deceiving, as they don't take into account discouraged workers.

"In places where the economy hasn't bounced back quite as well, you have people leaving the labor force. So you're getting a decline in the unemployment rate, but it's really because workers are discouraged," says Friedhoff.

Because of all of the factors that contribute to different cities' downturns and recoveries, the ultimate lesson here may not be that certain places are quantifiably "better off" than at a given point a few years ago, and will therefore be more inclined to support the president. The more interesting point may simply be that while the nation's unemployment rate is still slightly worse than it was when the president took office, the recovery may be much more alive and well in some places than others.

Danielle Kurtzleben is a business and economics reporter for U.S. News & World Report. Connect with her on Twitter @titonka or via email at dkurtzleben@usnews.com.