Economy Watch: Cities Took it on the Chin During Recession
- Nov 12, 2014
The Pew Charitable Trusts released a report on Tuesday that quantified how difficult the recession and post-recession years were for the 30 largest U.S. cities. The upshot: very difficult indeed. During the three years between 2009 and 2012, the U.S. economy began recovering from the recession, but for many major U.S. cities, the fiscal crisis persisted during those years. In fact, in some major cities revenue declines continued into 2012, a full three years after the worst of the recession ended.
Eighteen of the 30 cities saw revenue fall between 2011 and ’12, double the number between 2010 and ’11. In 2012, eight cities recorded their lowest level of revenue since the start of the recession. In most cities, drops in property tax revenue and state and federal aid accounted for most of the loss; both fell 4 percent on average across the 30 cities.
Revenue loss was uneven, however. Some cities enjoyed more revenue in 2012 than they had at their previous, pre-recession peak. For instance, Washington, D.C., had 113 percent of previous peak revenue that year, and San Francisco, Portland (Ore.), Seattle, Boston, San Antonio and St. Louis all had surpassed their previous peaks. By contrast, Detroit—the city that took the largest in terms of revenue—had to make do in 2012 with only 74 percent of its previous revenue high, and Riverside, Calif. Las Vegas, Sacramento, Phoenix and Orlando were also big revenue losers.
European economies soft
Retail sales dropped 1.3 percent in the euro zone (18 countries) and in the larger EU (28 countries) in September compared with August, the EU statistics agency Eurostat reported last week. It’s another indication of the ongoing sluggishness of European economies, which has been reducing demand for oil and other commodities worldwide and sparking speculation (once again) about demise of the common currency. Year-over-year, the zone managed to see a 0.6 percent rising in retail sales, however.
Other recent data about Europe included the fact that the headline unemployment rate for September was 11.5 percent (euro zone) and 10.1 percent (EU). The zone’s rate didn’t move compared with August, and was down from 12 percent in September 2013. The EU’s rate also didn’t budge compared with the previous month, and was down from 10.8 percent a year ago.
Youth unemployment (people under 25) remains a persistent economic and social problem for Europe, though it’s gotten slightly better recently. In the EU, the youth unemployment rate was 21.6 percent in September, and 23.3 percent in the euro zone. The lowest rate was in Germany, at 7.6 percent, with Spain suffering the highest rate, at 53.7 percent.
Wall Street eked out small gains on Tuesday, but it was enough to put the Dow Jones Industrial Average and the S&P 500 to record nominal highs again. The Dow gained 1.16 points, or a scant 0.01 percent, while the S&P 500 was up 0.7 percent. The Nasdaq advanced 0.19 percent.