US Recession Is Already Here

It’s hard to believe, but up until last week’s dismal jobs report, many Wall Street “experts” — as regular visitors know, I use that term VERY loosely — were still on the fence about whether the economy was in serious trouble. That is despite the meltdown in property values and a seize-up in credit markets, among other things.

Indeed, a recent Bloomberg survey of more than 50 economists put the odds of a U.S. recession during the next 12 months at just over 50 percent, despite mounting evidence that a severe, gut-wrenching downturn is virtually assured.

In fact, if the majority of these so-called analysts did what they are allegedly paid to do — or, more simply, if they just opened their eyes and looked around — they would realize that economic trouble is brewing everywhere. Among other things, they would be aware, as the New York Times reports, that “For Most Cities, Recession Has Arrived.”

Officially, the nation may or may not be in a recession. (That label is applied by the National Bureau of Economic Research, a nonprofit group recognized by the government as the final word on such things, and that word awaits.)

But measured at the local level, in places as diverse as Saginaw, Mich.; Sacramento, Calif.; Honolulu; and Atlanta, the slowdowns are well under way.

According to an analysis by Moody’s Economy.com released last week, about two-thirds of the country’s 381 metropolitan areas were in recession, and another one in five was at risk.

The report evaluates employment and industrial production data for the six months ending in August - so it doesn’t reflect deteriorating conditions caused by the financial upheavals in September. But other news did: on Friday, the government said the economy shed 159,000 jobs in September, the worst monthly tally since 2001 and the ninth consecutive month of job losses.

The seizing up of credit for businesses large and small, widely reported last week, seems certain to knock some of the “at risk” cities down a peg.

“Areas that are more exposed to the credit crisis through the financial industry are more likely to get worse in the months ahead, like New York City,” said Andrew Gledhill, an economist who worked on the Moody’s report.

Mr. Gledhill noted that the cities with economies still expanding as of August were often those more reliant on education, health care and energy for jobs. But even in those places the indicators point down.

“Really, nothing is safe,” he said.

The Midwest is dependent on exports and vulnerable to a European recession, according to Moody’s. Home prices may fall further in Florida and the Southwest as foreclosures mount. Home sales were up in the West - because of foreclosures.

Meanwhile, the National Bureau of Economic Research continues to assess the national picture. It finds mixed signals on labor (in decline) and gross domestic product (steady or rising), so for now, at least, a full-on recession hasn’t been confirmed.

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