But job gains at the university were nearly enough to offset those losses, Penn State economist Ted Fuller says. A new law school building is currently under construction, and a university-affiliated retirement community about a mile from Beaver Stadium is attracting alumni and newcomers to the town.
That might make State College "somewhat of a one-industry town," Fuller says. But locals are fortunate that it's "a clean, white-collar industry that pays well, continues to add jobs, and is nearly immune from the changing fortunes of the business cycle."
The same is true in Morgantown, home of the West Virginia University Mountaineers.
"If somebody's cutting back, it's not really affecting their travel," says Renee Braley, an agent with National Travel. "With my people, it's business as usual. .... I'm doing the Middle East, Egypt, Italy."
Flashing on her computer screen is an itinerary for a Rome trip with a price tag of $1,889. That same trip a year ago would have cost much less, she says.
"It's blowing my mind, but they're buying," she says, noting that one customer booked a $9,000 spring break trip for his family, then came back a few days later for a $13,000 jaunt to Hawaii. "They're still asking questions like, 'Will $2,000 or $3,000 more get me a better hotel?' So they're not cutting back.
"They should be, but they're not."
In Olympia, Wash., the local cash cow is state government.
At the southernmost tip of scenic Puget Sound, the population of this smallish city of 44,000 swells during the legislative session, when lawmakers, lobbyists and special interest groups swarm downtown coffee shops and eateries. Olympia is home not only to the Capitol and the bustle of politics that surrounds it, but also to two regional hospitals, Evergreen State College and a lively arts community.
In addition to numerous galleries, downtown Olympia hosts the Washington Center, home to the Olympia Symphony Orchestra, Harlequin Productions at the historic State Theater, as well as the Capital Playhouse. The 125-seat, black-box theater runs 11 musicals a year, and the three-week shows were so popular, they added another weekend to each musical starting last September.
"None of those things individually is a significant driver by themselves, but what they do do is drive the economies of other businesses," says Jeff Kingsbury, who founded the playhouse. "It's such a diverse mix of businesses and the thriving arts, it really helps stabilize the economy all the time."
Located between Seattle and Portland, and close to both the mountains and the coast, Olympia also earns points for air quality, low crime and other quality-of-life measures. But it's that constant of state government that is "the great equalizer for us," says Michael Cade, executive director of Thurston County Economic Development Council.
"State capitals are good, especially if ... state government's large relative to the size of the town," says Martin, the Fed economist.
Of course, even these "well-insulated" places — Martin's term — would feel the effects of a recession.
Hovind says his use of the term "recession-proof" shouldn't be misconstrued as meaning a place is untouched by economic malaise.
"It's not absolute. You can't look at it in those terms. This is a continuous scale of gray," he says.
Despite continued job growth and housing prices that are still climbing, the Triangle didn't make Hovind's list.