Central San Joaquin Valley economies climbing faster, but from deeper trough

The Fresno BeeJanuary 15, 2014 

In some ways, central San Joaquin Valley counties are showing faster signs of economic growth than the overall improvement nationwide.

But in a region that was hit harder than most in the Great Recession, a report issued this week by the National Association of Counties suggests, there is still a ways to go before Valley counties recover to their pre-recession condition.

The "County Tracker 2013" report analyzed the economic performance of the nation's more than 3,000 counties from 2012 to 2013 according to four key indicators: total economic output or gross domestic product; change in unemployment rate; rate of job growth; and the rate of growth in median home prices.

The report's authors, using data from Moody's Analytics, reported that the region's counties began experiencing the recession, and started seeing modest signs of recovery, at different times. Madera County, for example, saw its economic output rate peak in 2006 before dipping, while the decline didn't begin in Fresno and Tulare counties until 2007, and in 2008 in Kings County.

And while California's and the nation's overall economies began growing again in 2009, economic growth rates lagged until 2011 in Fresno, Madera and Kings counties, and until 2012 in Tulare County.

"In aggregate, Western county economies had the best economic performance across regions in 2013," NACo authors Emilia Istrate and Nicholas Lyell wrote. Counties in the West reflected the biggest gains in economic output or GDP, median home prices, job growth and the largest drops in the unemployment rate. Overall, "recovery rates improved in 2013, but the recovery is still fragile."

Just how fragile is revealed when numbers for Fresno, Kings, Madera and Tulare counties are compared to the rest of the country. In Fresno County, the growth rate in the median home sale price -- the price at which half of homes sold for more and half sold for less -- peaked in 2006 before the real estate bubble burst and values tumbled. After remaining relatively flat since 2009, prices began climbing again in the last couple of years, and the median home price in Fresno County rose 15.6% between 2012 and 2013, and by 13.4% in Tulare County. But median prices in the two counties remain well below where they were before the market's peak, despite rising faster than the national rate of 11.2%.

"When you've had big declines, you're more likely to see faster growth in recovery," said Jeff Michael, an economist at Stockton's University of the Pacific who publishes a quarterly economic forecast for the Valley. "Clearly that's true for home prices. California is leading the nation there because we led the nation in declines."

Unemployment also reflects the volatility of individual counties. The NACo report states that nationwide, counties saw their aggregate unemployment rate fall by half a percentage point from 2012 to 2013. Every Valley county bested that improvement by a factor of four or more, from a 2.7 percentage point decline in Madera County to a drop of 2.3 in Kings County.

Because the region's counties started off higher than the national unemployment rate even before the recession struck and tended to be hit harder than much of the nation, the four-county area's average unemployment last year was just over 13% -- compared to the average of 7.2% across the 3,069 counties included in the report.

"The U.S. economy did not expand fast enough to close the recessionary jobs gap and also create jobs for the people entering the job market," Istrate and Lyell reported. "By November 2013, the country was still 1.3 million jobs short of the pre-recession peak and unemployment rates remained above 7%."

Because the national figures represent an average that is likely a far different picture than any individual county's economy, the authors said the goal of the NACo report "is to identify where county economies are on their individual recovery trajectory" based on the four indicators.

Nationally, for example, the U.S. Census Bureau estimates that just under 15% of people live in poverty. In California, the proportion is just over 15%. In the Valley, however, poverty rates range from 20.7% in Kings County to 24.8% in Fresno and Tulare counties.

"The national economic numbers mask the growth patterns on the ground," Istrate said. "The dynamics within county economies affect the capacity of counties to deliver services and meet their financial obligations."

The reporter can be reached at (559) 441-6319, tsheehan@fresnobee.com or @tsheehan on Twitter.

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