Slice of Central US Safe From Recession Shrinking

Carl Rupp and his neighbors follow the old rancher's creed: "Keep your money in your pocket."

In this photo made Thursday, June 25, 2009, Carl Rupp poses next to a tractor on his form south of Torrington, Wyo. (AP Photo/Ben Neary)

(AP)

Rupp has farmed his whole life. He lives in Goshen County, a rural spot along the Nebraska line where cattle outnumber humans 16 to 1 and you can still see the ruts cut by wagons that hauled pioneers along the Oregon Trail. "We're very conservative," said Rupp, 62. "We don't go out too far on a limb."

That prudent financial bent, matched with the high prices paid for crops and energy in the past few years, has largely protected Goshen County and a core group of several hundred other counties in 10 states from the recession's chokehold. The Associated Press Economic Stress Index shows they make up a "safe zone" that covers a long swath of middle America, from the Great Plains south to Texas.

But the safe zone is shrinking. Energy production and prices are sliding, especially for coal and natural gas. Crop prices are dropping, too, as there's less demand in Asia for American wheat, corn and soybeans. There were 800 counties in the safe zone a year ago, a number that dropped to about 300 counties in May and slid further to 200 counties in June.

"To say that you're doing pretty well is just to say that it's the best-looking puppy in a pretty ugly litter," said Wyoming Gov. Dave Freudenthal, who recently imposed a 10 percent budget cut across his state's government in response to falling tax revenue from the energy sector.

The contiguous counties in the safe zone start in Montana and North Dakota, and cascade into Wyoming, South Dakota, Nebraska, Iowa, Kansas and Oklahoma, and end in northern Texas and eastern New Mexico. Those in the safe zone had an AP Economic Stress score under 5 in June, making them the economically healthiest in the United States.

The AP calculates a score from 1 to 100 based on each county's unemployment, foreclosure and bankruptcy rates. The higher the score, the higher the economic stress.