What happened seven years ago this month?
According to the National Bureau of Economic Research, the U.S. economy went into recession in December 2007. The so-called “great recession” – a term I never really liked and have rarely used in this column – continued until June 2009.
While December 2007 might have marked the “official” beginning of the recession, it wasn’t like someone flipped a switch.
In 2005, credible but largely disregarded commentators were already predicting a major slowdown in the U.S. housing market would lead to a deep, protracted recession.
By spring 2007, I was using words like “dire” to describe the Savannah housing market. At that point, the ratio of home sales to new listings and new home permits was so far out of whack that a collapse was inevitable, but many people continued to seek out bright
spots in the data.
At the Savannah Area Chamber of Commerce’s annual Economic Outlook Luncheon in January 2008, a University of Georgia economist pegged the odds of a recession at less than 50 percent and even predicted that housing would be rebounding by year’s end.
For many, the depth of the recession didn’t become clear until after the financial crisis and stock market collapse in late 2008. I’ve even heard from business people who claim that they weren’t negatively impacted by the downturn until 2009.
So we may have an official beginning date for the recession, but our individual experiences vary widely.
Ditto regarding the recession’s end.
In June 2009, many economic indicators were still far, far below their previous highs, and the slow turn from economic contraction to economic expansion was virtually unnoticed in real time.
Employment is generally a lagging indicator of economic conditions, so the nation continued shedding jobs for months after the end of the recession.
I was thinking about some of this history as I combed through the October 2014 employment numbers released recently by the Georgia Department of Labor.
Seven years later, are we in better economic shape than we were before the recession?
In October 2014, the Savannah metro area (Chatham, Effingham and Bryan counties) had an estimated 166,700 nonfarm payroll jobs. In October 2007, we had 162,300 jobs.
So, yes, we have more jobs than we had in 2007. However, if we had not had a recession and had seen relatively modest job growth through the last seven years, we’d now have at least 5,000 more jobs.
In October 2014, Savannah metro area unemployment stood at 6.7 percent, with 12,217 people unemployed. In October 2007, our unemployment rate was 4.0 percent, with just 7,106 unemployed.
We’ve been seeing some strong employment gains in recent months, but we need to see even stronger growth to make up for the ground lost to the recession and the slow recovery.
Other measures also suggest that the recovery remains incomplete.
For example, it has been great to see this year’s increase in passengers at the airport, but the number of enplanements and deplanements in October was still slightly below the 2007 level.
Had we not seen a collapse in sales tax revenue during and after the recession, we would have seen considerably more spending on infrastructure projects. Perhaps a new arena would be under construction, and we would probably already be enjoying a new cultural arts center.
By contrast, other sectors seem to have made up all the lost ground from the recession.
For example, the number of containers handled by the Georgia ports was about 25 percent higher in October 2014 than in October 2007. We’ve also been setting records for hotel bed tax collections.
There are many other reasons for optimism about the Savannah area economy, so it’s reasonable to expect that employment will catch up.
It’s unclear whether we’ll ever regain the 4,000 construction jobs lost during the bust, but we experienced job growth of approximately 2 percent over the last 12 months — considerably faster than the rate of population growth.
Over the last year, the local unemployment rate declined from 7.3 percent to 6.7 percent, so it seems likely that the rate will be below 6 percent by fall 2015.
On balance, that seems like positive news, but it’s worth keeping in mind — especially here at the holidays – that thousands of area families are still suffering the effects of the recession, even it officially ended more than five years ago.
City Talk appears every Tuesday and Sunday. Bill Dawers can be reached via billdawers@comcast.net. Send mail to 10 East 32nd St., Savannah, Ga. 31401.
By Bill Dawers