Posted on Tuesday, February 8, 2011
The nation's economic stress inched up in
December because higher foreclosures outweighed
lower unemployment, according to The Associated
Press' monthly analysis.
Bankruptcy levels remained largely unchanged from
November. But the depressed housing market took a
toll. Foreclosure rates rose in 33 states, most sharply in Utah, New Jersey, Nevada and Arizona.
Most analysts expect the economy to gain momentum
this year, in part because of a tax-cut package that
lowers workers' Social Security taxes and puts more
money in their paychecks. But two straight months of
higher stress to end 2010 marked a setback after the
nation's economic pain had eased since the start of
last year, the AP Economic Stress Index showed.
The AP's index calculates a score from 1 to 100 based
on unemployment, foreclosure and bankruptcy rates.
A higher score signals more stress. Under a rough
rule of thumb, a county is considered stressed when
its score exceeds 11.
The average county's score in December was 10.4, up
from 10.3 in November. Slightly more than 40 percent
of the nation's 3,141 counties were deemed stressed,
up slightly from November.
For all of 2010, economic stress eased in every state
but five: Colorado, Florida, Georgia, Nevada and Utah.
Stress fell most sharply in the Great Lakes states and
the Southern states of Alabama, Mississippi and
Tennessee. Those states have large manufacturing
bases, and the AP analysis showed that stress
dropped most in counties with large proportions of
workers in manufacturing.
U.S. manufacturers are finally adding jobs after years
of shrinking their payrolls. They added 136,000
workers last year, the first net increase since 1997.
And in January, the manufacturing sector added
49,000 jobs — the most in any month since August
For 2010, the sharpest increases in economic stress
occurred in counties with heavy concentrations of
real estate workers.
Nevada was again by far the most troubled state with
a Stress score of 22.56. It was followed by Florida
(16.47), California (16.36), Georgia (14.5) and
Arizona (14.46). Among those five, only Nevada's
Stress score rose from November to December.
And once again, the healthiest states were in the
Plains and New England. North Dakota had the lowest
Stress score in December: 4.65. It was followed by
Nebraska (5.38), South Dakota (5.69), Vermont (6.19)
and New Hampshire (6.95).
Nationally, the unemployment rate has sunk over the
past two months, from 9.8 percent in November to 9
percent in January. But hiring remains weak because
employers still lack confidence in the economy.
Most analysts say the tax-cut deal that took effect this
year will help. Extra take-home pay could lead
consumers — who fuel about 70 percent of the
economy — to spend more.
"The tax deal provides the economy with some
significant juice that will lead to better growth, better
job creation and lower unemployment," said Mark
advertisement By MARTIN CRUTSINGER and MIKE SCHNEIDER Associated Press
AP Analysis: Foreclosures Raise US Economic Stress
Economic pain up slightly in December because of higher foreclosures, AP stress map shows
Zandi, chief economist at Moody's Analytics.
In December, stress increased the most in the West.
That was due primarily to worsening bankruptcies
and foreclosures. Foreclosures in the nation's hardest
hit communities in California and Florida have dipped
in recent months. But they've risen in areas like
Seattle; Salt Lake City; Albuquerque, N.M.; and
In December, Georgia joined the list of five most-
stressed states for the first time, and Michigan
emerged from the list for the first time. The Stress
Index's calculations date to October 2007.
Michigan is benefiting from having missed the real
estate bubble and bust. It's also managed its budget
better than most other high-stress states have. Job
hemorrhaging has been stanched, in part because of
a more stable manufacturing sector. The state is
expected to end 2011 with job gains for the first time
in nearly a decade.
Many of the new jobs are in health care and
professional services, though manufacturing is also
adding jobs thanks to demand from overseas, said
Hari Singh, an economist at Grand Valley State
University in Grand Rapids, Mich.
"Manufacturing is definitely having a turnaround,"
In Georgia, the unemployment rate has risen steadily
since July. So have foreclosures and bankruptcy
filings. Georgia has the second-highest bankruptcy
rate at about 2.2 percent, trailing only Nevada. It's
also saddled with the seventh-highest foreclosure
Its troubles stem from the state's real estate boom and
collapse, said Rajeev Dhawan, an economist at
Georgia State University.
"Bankruptcies and foreclosures are the side effects of
the damage from the real estate bust," Dhawan said.
"First, you have the real estate problem, and then it's
going to spill over into bankruptcies and
foreclosures. That is what has been happening in
In December, the most economically stressed
counties with populations of at least 25,000 were
Imperial County, Calif (32.39); Lyon County, Nev.
(27.56); Nye County, Nev. (25.91); Merced County,
Calif. (25.37); and Yuma County, Ariz. (25.34).
The healthiest counties according to the Stress Index
were Ellis County, Kan. (3.48); Buffalo County, Neb. (
3.74); Ford County, Kan. (3.95); Ward County, N.D.
(4.02); and Sioux County, Iowa (4.12).
By MARTIN CRUTSINGER and MIKE SCHNEIDER Associated Press