Majority of States Now in Recession
In March, 5 states were in recession; now there are 27 with 14 more at risk.
Oct. 21, 2008— -- What started out as a housing problem in a few states has now exploded into a full-fledged recession with a majority of states now in or dangerously close to recession.
Just this weekend, President Bush's top economic advisor used the much-avoided word "recession" to describe the economies in some states.
"We are seeing what I think anyone would characterize as a recession in certain parts of the country," Edward P. Lazear, chairman of the Council of Economic Advisers, said on CNN's "Late Edition."
Back in March, Mark Zandi, chief economist and co-founder of Moody's Economy.com, said that only five states were in recession: Arizona, California, Florida, Michigan and Nevada.
Now, he said that 27 states are in recession and another 14 are near recession.
"There's no way around the map. It says the nation is in recession. The recession is coast to coast," Zandi said. "Just a handful of states are expanding at this point. One of the unique features of this downturn is how broad-based it is, regionally."
What happened between March and today?
"The job market has eroded measurably and industrial production has weakened sharply in the last couple of months. Those are the two key things. The other thing is that retail sales have also sharply weakened," Zandi said.
The one bright side is part of the middle of the country. Agriculture and energy are still strong and providing jobs.
Maryland, Massachusetts and New Hampshire are still growing and that is because of health care and educational services.
"In the past, in recessions, you saw people moving from areas that were hard hit, to areas that were holding up better, looking for jobs and better incomes," he said. "Now, there is nowhere to go."