2012 Economic Report By US Conference Of Mayors Shows Anemic
Growth In Nation’s Metro Economies
January 21, 2012
growth for nearly all of the nation’s metro areas will increase this
year but not fast enough to force the unemployment rate below 8 percent,
according to a report produced by IHS Global Insight as part of the US
Conference of Mayors’ US Metro Economy series.
“The economic recovery is too slow, and it is a direct result of the
inaction of this Congress in 2011,” said Los Angeles Mayor Antonio
Villaraigosa, the President of the US Conference of Mayors (USCM), in a
speech to the non-partisan organization’s 80 th Winter Meeting. “If we
gave the 112 th Congress a mid-term report card, the grade would be
clear. Congress would get an ‘F.’”
At the close of 2011, 125 cities and their metro areas had not seen any
net job growth. By the end of last year, the economy as a whole had
regained only 30 percent of jobs lost from the Great Recession.
The outlook for 2012 is better. By the end of this year, the report
forecasts that almost every one of our 363 metro economies will see job
gains and the nation will have gained back 48 percent of its lost jobs.
But despite this progress, the recovery remains slow and uneven. For
almost 80 of the nation’s metro areas, it will take more than five years
to get back to pre-recession levels of employment.
The report offers a glimpse into what middle-class families are going
through in this economy: median real income for US households in 2010
was $49,455 – 7.1% lower than in 1999, when it was $53,252.
unveiling the findings of the report at a morning press conference,
Villaraigosa used an afternoon speech to the US Conference of Mayors to
lay out an agenda to put America back to work. In particular, he called
for: (1) investing in infrastructure jobs by passing bipartisan
transportation legislation that includes the America Fast Forward; (2)
cutting taxes for working Americans by extending the payroll tax cut;
(3) providing relief to those looking for work by extending unemployment
benefits; and (4) strengthening communities by protecting the Community
Development Block Grant program, the HOME Investment Partnership
program, and public safety programs from further cuts in FY 2013.
“If Congress flunked the mid-term, it can still get a passing grade,”
said Mayor Villaraigosa. “When Congress returns to session, it must make
a down payment on America’s economic future by investing in our cities.”
Here are additional insights from the report:
The researchers expect a modest
improvement in housing starts this year (730,000 units, compared
with 610,000 in 2011), concentrated in apartments, since people
are renting instead of buying.
With rises in oil and food prices
slowing, inflation will fall back to 1.5% in 2012.
The median real income for US
households in 2010 was $49,455 – 7.1% lower than in 1999, when
it was $53,252. This decline has been even steeper for poor
people. During this time, income for the bottom 10% of American
earners declined by 12.1%.
This is an important issue for metro
areas, as the trend in median income decline has hit cities
hardest. For example, from 2009 to 2010, metro area household
income fell 2.2% while rural areas didn’t fall.
Even with a stronger domestic
performance, the recession risk for the U.S. remains
uncomfortably high, at 30%. IHS predicts a mild recession in
Europe, but not severe enough to tip the United States into
recession. It will primarily impact export demand and earnings
of American companies.
IHS Global Insight expects trade to
soften in 2012, with exports increasing only 3.7% while imports
rise 2.7% thanks to softening growth abroad, including the
economic turbulence in the Eurozone. Over the longer term,
though, there’s good news: Export growth will be strong,
averaging 7.9% annually over the next five years, outpacing
imports, which will advance by 5.2%. This will chip away at the
US trade deficit and open up more opportunities for local firms
to sell goods globally.