Cities Once Immune Now Suffering in Recession

There's no place left to hide from rising unemployment. Nationwide, of course, job losses have been mounting for quite some time. Four states — California, Michigan, Rhode Island and South Carolina — now have unemployment rates north of 10%. But until January, certain pockets of the country were bucking the national trend. In fact, in December, six metropolitan areas actually saw flat or falling unemployment rates from a year earlier.

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No more. Each of these cities — Casper and Cheyenne, Wyo., Charleston and Morgantown, W.Va., Bismarck, N.D., and Jonesboro, Ark. — is now suffering the effects of the economic slump. "In the beginning, it was the manufacturing areas, the high-foreclosure areas, the places with the construction jobs and the banking and financial industries," says Bureau of Labor Statistics (BLS) economist Lisa Williamson. "Now, there's a ripple effect throughout the economy." (See pictures of Americans in their homes.)

The fate of the last bastions of good employment news illustrates how even economic strongholds are succumbing to recession. (Read "What Sells in a Recession: Canned Goods and Condoms.")

Back in December the unemployment rate in five of those cities — from 2.7% in Morgantown to 5.5% in Jonesboro — was not only well below the national average of 7.2%, but also lower than it had been 12 months earlier; in the sixth, Casper, the rate held steady from a year ago. That put them starkly at odds with the other 363 metropolitan areas tracked by the BLS, all of which were seeing unemployment rising, in some cases sharply. Unemployment in Boise, Idaho, for example, jumped from 3.0% to 7.1% during 2008. In Fresno, Calif., it went from 9.8% to 13.2%.

Meanwhile, in northeastern Arkansas, Jonesboro was getting word of some 1,800 new jobs from companies like wind-turbine-maker Nordex. Outside of Charleston, the Toyota plant was bringing down production but avoiding major layoffs by giving workers other tasks like training workshops. Going into the recession, each of the six cities had at least one built in advantage: either being a state capitol (Bismarck, Charleston and Cheyenne), hosting a big university (like Arkansas State in Jonesboro and West Virginia University in Morgantown) or sitting on top of a valuable natural resource (natural gas in Casper, coal in West Virginia and oil in North Dakota).

The protection against recession, however, couldn't last forever. January marked a dark turning point for each of the cities. Unemployment claims started ticking upward in Jonesboro. In Cheyenne, unemployment hit 5.9%, up from 4.7% the January before, as layoffs in its warehousing and retailing industries started to filter through. Owing partly to an aluminum plant shutdown, unemployment in Charleston rose to 4.9% from 3.9% 12 months before. In Morgantown, the rate went to 3.9%, from 3.2%. Lower energy prices helped drive up the percentage of unemployed people in Casper to 4.2% from 3.4% year-over-year, and will likely have a similar effect on Bismarck's number when they're released next week.

"We're starting to enter into the slide," says Buck McVeigh, who runs Wyoming's Economic Analysis Division. "In recessions, Wyoming tends to lag behind, but we're seeing it now." Everybody is.

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