It seems that I have been talking and blogging forever about the difference between the Austin/Central Texas experience during this recession and the way the recession has impacted other communities. As I have written several times, most of the really horrible economic news that has dominated press reports over the past couple of years was focused in five states: California, Nevada, Arizona, Florida, and Michigan. Michigan’s woes really began a few years before, and were certainly compounded in a big way by the 2008/2009 downturn, but the other four states really took the big hit.
Two articles caught my attention today and highlighted that distinction:
Austin has been reported for a couple of months to be on the leading edge of this economic recovery, but it’s good to see the trend and optimism continuing.
Perhaps the best news in those articles is the fact that no cities in California appear on this list of five “worst.” Arizona, Nevada, Florida, and Michigan are still prominently featured, however. I have talked with a client in northern California and another in the Los Angeles area since the 1st of the year, and there is no indication of dramatic improvement in their market areas yet, but they believe the worst of the roller coaster ride may be behind them now.
Employment remains the key area of risk — in the hardest hit markets and in Austin. I have written recently about continuing job growth in Austin (albeit slow), so there is reason for optimism here. Ultimately, however, high unemployment and continuing job losses elsewhere jeopardize the larger economy and will make the recovery longer and harder everywhere. Jobs –> income –> confidence –> consumer spending –> economic growth. That formula is still the only path to prosperity.