Wednesday, April 8, 2009

The Recession Comes to Dayton

“Dayton” here defined as the five-county Dayton Metropolitan Area.

This is an attempt to measure the onset of the recession in the region, using Bureau of Labor Statistics monthly employment statistics, since they are very recent (last numbers are from February) and are shredded out by economic sector.

The statistics used here are all private employment stats, not including the various levels of government, since the intention is to measure economic activity as reflected in job creation and loss across the metro area.

As one can see the metro area was pretty weak in generating employment, even in good times. One can say the Dayton area never really recovered from the “9-11 Recession”.

Opening up the numbers to look the monthly employment starting in 2006 to see what the trend looked like as we entered the recession.

Since these are raw numbers, not seasonally adjusted, one can see the pulse of the local economy over the course of a year, with seasonal employment and downtimes providing a pattern of job growth and decline over a year. Yet the pattern is more or less the same from year to year, as one sees in 2006 and 2007.

However, in 2008 the pattern collapses, showing the economic pulse becoming irregular.

The yearly employment cycle compared, 2008 vs. 2007, showing how the local economy moved into recession by deviations by month and quarter.

This BLS time series has sub-shreds by sector. Taking two gross sectors, good-producing (for Dayton this is mostly construction & manufacturing) and private sector services-producing (not including government) to see how the trends went for the near term, 2006-early 2009

First, goods producing. 2006 is annotated to show features of the annual employment cycle that appear to occur in every year, then 2008 is annotated to show when this sector slid into recession.

Next, service producing, with similar annotations (this sector has a pretty consistent annual employment cycle in good times).

It looks like the recession came to Dayton in the first few months of 2008, but for sure for services after April, and for goods, employment rapidly collapsed after the summer.

Taking the longer view for these sectors, starting in 1999 (the time series goes back to 1990), labeled with a few observations from yer humble host.

The 2000’s were not good times for the Dayton metro area, at least for private sector employment. So the recession is going to make an what seems to be an already weak employment situation worse


Greg Hunter said...


Thanks for the data and you always give the data. I wonder what the response to this data should be? It is the contention of most that there will be no recovery per say as the foundations for "economic growth" are not available. Dayton has had the earliest signals, but still continues to do Business as Usual. The future of Dayton is to accept that DC and Wall Street have ruined our economy and then strive to build a Regionally healthy economy. Of course those that lead us here are still in the positions or their clones so it appears it will get much worse before we accept that our reactions are wrong and hit CTRL-ALT-DEL and reboot to different expectations of the future.

Jefferey said...

I am not an economist, so can't offer much than just a laymans interpretation of these numbers, which is what you see here.

I think the things that should be of concern is the first graph and the last two, which show a weak regional economy even before the recession. It also seems that the metro area never really recovered from the first recession, or recovered at a lower level.

So if the past is prologue employment will "stabilize" (i.e. stagnate or continue the slow decline), but at a lower level than before 2008.

So, over the long range, there is sort
of a stair-step effect going on, maybe.

It also could be that the 1990s was an exceptionally good economy for us.