Economic Tracker: shows progress, but recovery sluggish

As President Obama prepares to deliver the State of the Union, NACo releases 2014 County Economic Tracker: Progress through Adversity , an analysis of the recovery patterns across the 3,069 county economies in 2014. The conditions of a county economy can constrain and challenge county governments, residents and businesses, but can also provide opportunities. Tracking the Tracker

You can find the analysis at www.naco.org/countyeconomies . To access the companion interactive maps and the individualized county profiles, go to NACo's County Explorer interactive map www.naco.org/countyexplorer .

The January update of NACo's interactive tool will feature the economic data from the County Economic Tracker analysis.

The 2014 County Economic Tracker analyzes the annual changes of four economic performance indicators economic output, also known as gross domestic product (GDP), employment, unemployment rates and home prices between 2013 and 2014 across county economies. In addition, it explores 2012 2013 wage dynamics, taking into account the effect of local cost-of-living and inflation of average annual wages in county economies.

The focus of the report is on the county economy, not the county government. County economies are the building blocks of regional economies (metropolitan areas and micropolitan areas), states and the nation. County governments ensure the functionality of these fundamental units by building and maintaining basic infrastructure assets, keeping communities healthy and safe, and providing the social safety net for those in need.

2014 was a year of growth, but recovery from the recession remains sluggish. By 2014, the GDP in 55 percent of all county economies recovered or did not decline as measured over the last decade. Home prices were in a similar situation. Job growth accelerated and 63 percent of county economies witnessed faster job gains than in 2013.

This job growth helped unemployment decline in almost all county economies during the past year, but it was not sufficient to bring most county economies to levels seen before the recession. Nearly three-quarters of county economies are still below their pre-recession employment levels and unemployment is not back to pre-recession rates in 95 percent of county economies.

Economic Recovery Spreads B ut Remains Uneven across the Country

However, by 2014, almost three-quarters of county economies had recovered to pre-recession levels on at least one of the indicators analyzed (GDP, employment, unemployment rates and home prices). For the first time, one large county economy (Kent County, Mich.) out of the 124 large county economies reached its unemployment rate seen before the downturn.

Yet, none of the large county economies counties with more than 500,000 residents recovered on all four indicators.

Smaller county economies have fared better. Sixty-five county economies recovered on all four indicators by 2014. Most are small, counties with fewer than 50,000 people. Most of them have booming energy and agriculture sectors (in states such as Alaska, Kansas, Montana, North Dakota and Texas).

County economies are where Americans feel the national economy. While the 2014 national economic numbers are strong, Americans do not see them in their paychecks. For example, only 40 percent of the new jobs in 2014 were in industries paying more than the average wage in the county where the job resides. Large county economies continued to generate a disproportionate share of the new jobs in 2014, but only 38 percent of the net jobs created in the 124 large county economies were in industries paying above the 2013 average wage in their residing county.

Between 2012 and 2013, average wages declined in half of county economies, when taking into consideration the cost of living and inflation. In states such as Pennsylvania, New Mexico and Maryland, only a third of county economies saw growth in their cost of living and inflation-adjusted wages.

This sluggish and uneven recovery across county economies adds to the obstacles that challenge counties. Counties face a triple threat from the uncertainty around major federal policy changes, from tax reform, entitlement reform and appropriation cuts, absent any reductions in unfunded mandates or federal regulations.

Counties are doing their part, investing in economic development, transportation and providing core social services. In creating economic development initiatives, counties leverage networks of public, nonprofit and private partners necessary for successful local economic development.

"The County Economic Tracker is a reminder that that the U.S. economy happens on the ground, in the 3,069 county economies that provide the basis for county governments," said Matt Chase, NACo executive director.

"Economic growth is spreading, but most county economies have not recovered to levels seen before the recession on a number of indicators. This progress through adversity indicates the success of county economic development efforts, but also the continued need for a strong local-state-federal partnership in securing a strong economy."