Recession Risk for US Metro Areas: Most & Least at Risk [+ 2020 Unemployment & Debt Totals]
The recession risk for US metro areas is highest in Honolulu, Hawaii. The city faces a 20 percent unemployment rate, while Hartford, Connecticut faces the lowest recession risk indicators with a 7.5% unemployment rate. The main recession risk factors include the unemployment rate, average income, average credit card debt, and cost of living index. Read more about recession risk in US metro areas below.
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UPDATED: Nov 9, 2020
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What You Need to Know:
- The United States is officially in an economic recession, the first since 2008
- The current economic recession is primarily fueled by the global COVID-19 pandemic
- Volatile industries like tourism are set to face over $910 BILLION in recession losses
- Unemployment is topping 15 percent in many places across the United States
The National Bureau of Economic Research recently announced what many of us already knew: The U.S. economy is officially in a recession, so which cities face the worst recession risk for US metro areas?
Following a record-breaking 128 months of economic growth, as of March 2020 the United States slid into a recession fueled by the coronavirus pandemic.
The coronavirus has shut down or slowed major sectors of the economy and has led to the highest unemployment rates since the Great Depression. In our study of the industries hit hardest by COVID-19, we found leisure and hospitality; education and health services; retail trade; professional and business services; and manufacturing to be especially hard hit.
Some industries are facing a large question: Will insurance cover us during the COVID-19 pandemic? Check out our best insurance companies page for more information about the details about how an insurance company can meet your needs for auto, home, and life insurance.
This current study continues our research about COVID-19 and the economy. We knew more information was needed as the pandemic wreaks havoc on both the economy and our health. This led us to wonder: What U.S. metro areas are most ready to face a recession, and conversely, what cities are most at-risk?
These questions are especially pertinent as we prepare for another round of coronavirus infections this coming fall and winter. Recession risk for population centers varies across the country, so we dove into the data to find out what cities can expect to easily face this downturn, and what cities can expect to struggle.
In this article, we rank the U.S. metropolitan statistical areas most- and least-ready to face an economic downturn. We base these rankings on four individual economic indicators:
- Unemployment rate: number of work-eligible adults out of work
- Average income: average income made by each individual within the metro area
- Average credit card debt: average credit card debt held by each person in the city
- Cost of living index: a figure that allows the overall cost of living to be compared place to place
We pulled the unemployment rates from the U.S. Bureau of Labor Statistics’ most recent unemployment numbers (April 2020) at the time of writing. Average income is the personal income from the U.S. Bureau of Economic Analysis’ most recent report. Average consumer credit card debt is provided by Experian and represents the average outstanding balances on credit cards held by those ages 18 and up across a metro area.
A note on the cost of living index, which can be a confusing term: Cost of living indexes provide a way for people to compare the average costs of living in a particular place to another place. Such indexes take into account not only expected costs like housing and utilities, but also important items like health care and food, as well as entertainment and clothing.
In our rankings, we used a cost of living index based on a mean of 100. That means the average cost of living index across the United States is 100. Places with indexes over 100 are more expensive to live in than the average nationwide, while areas with indexes under 100 are less expensive.
One industry that plays a role in recessions is the insurance industry. During a recession, finding a way to cut back on expenses is often important to give you a little flexibility in your budget. To find the best insurance quotes for you, type your ZIP code into our FREE online quote comparison tool above. It’ll give you the best insurance rates for you based on your area and your demographic information.
In this article, we’ll also cover the following topics related to which metro areas are most ready to face a recession:
- 2020 recession prediction for the U.S.
- The U.S. recession during 2008 (the last recession that is known as the Great Recession)
- The risk of recession meaning and the next recession forecast
Though consumer confidence had previously been at an all-time high, the coronavirus has us all worried about not only our physical but also our financial well-being. As we begin to prepare for another wave of COVID-19 infections, it’s important to know where residents are best-prepared—and unprepared—to face economic uncertainty.
U.S. Metro Areas MOST READY to Face a Recession
We found that a number of small and mid-sized cities across the United States are most ready to face a recession based on our four individual economic indicators. You can see how their indicators break down in the table below.
|Metro Area||Unemployment||Avg. Income||Avg. Credit Card Debt||Cost of Living Index||Rank|
|Hartford-West Hartford-East Hartford, CT||7.50%||$64,337||$6,587||93.9||1|
|New Haven-Milford, CT||7.20%||$56,650||$6,530||102.2||5|
These 10 metro areas represent almost every region of the United States. They also have a relatively low cost of living for the most part, with below-average unemployment rates. That’s especially important during a recession.
From Hartford, Connecticut, in New England to Columbus, Georgia, in the Deep South, to Boulder, Colorado, in the Mountain West, the cities most ready to face a recession are diverse by location, size, and demographics. Let’s take a closer look at these regions.
#10 – Low Risk: Raleigh-Cary, NC
- Population: 2,079,687
- Unemployment Rate: 11%
- Average Income: $55,045
- Average Credit Card Debt: $6,593
- Cost of Living Index: 102.3
Beginning our countdown of the metro areas most ready to face a recession is the area around Raleigh, the capital of North Carolina.
Raleigh is one leg of North Carolina’s Research Triangle, which is one of the most quickly-growing and innovative parts of the state. In the video below, you can learn more about the emergence of this important center of research and development.
The area is quickly growing and has a relatively recession-proof employer at the forefront of industries found here: the State of North Carolina’s government. Government jobs tend to be more secure and employees tend to remain working, even if at home, or paid during a furlough.
Residents of Raleigh can save even more money for a recession rainy day fund by finding the cheapest auto insurance available. We’ve created a complete North Carolina auto insurance guide to help you find an affordable plan that fits your family’s needs.
#9 – Low Risk: Columbus, GA-AL
- Population: 314,342
- Unemployment Rate: 12.2%
- Average Income: $41,067
- Average Credit Card Debt: $6,533
- Cost of Living Index: 74.4
The area surrounding Columbus, Georgia—which extends across the state line into Alabama—has the lowest cost of living index of any metropolitan statistical area we studied. Cost of living can be a crucial factor when it comes to a recession, as higher costs of living put residents more at risk.
Manufacturing is at the heart of large employers in this southwestern Georgia mid-sized city. Kia Motors operates a vehicle manufacturing plant here, while Pratt & Whitney operate a jet engine components and overhaul facility.
#8 – Low Risk: Boulder, CO
- Population: 326,196
- Unemployment Rate: 9.7%
- Average Income: $73,394
- Average Credit Card Debt: $6,614
- Cost of Living Index: 167.4
The region around Boulder, Colorado, has the highest cost of living of any place in our ranking of the places most ready to face a recession. But it also has one of the lowest unemployment rates, meaning jobs are more secure in this picturesque area in the foothills of the Rocky Mountains about an hour northwest of Denver.
In the video below, you can catch a glimpse of just how beautiful this area is.
The University of Colorado’s flagship campus is located in Boulder, and universities tend to be big economic boons for an area. Aerospace and cleantech have also become big industry presences here, with Google, IBM, and Ball Aerospace setting up shop in Boulder.
#7 – Low Risk: Richmond, VA
- Population: 1,258,251
- Unemployment Rate: 11.3%
- Average Income: $57,301
- Average Credit Card Debt: $6,602
- Cost of Living Index: 95.1
Richmond, Virginia, lands at the 7th spot in our ranking of the metros most ready to face a recession, and it’s the second of four state capitals on this list.
With close proximity to not only Washington, D.C. but also the beaches of eastern Virginia and the mountains of western Virginia, Richmond is a good place to call home, especially given its below-average cost of living.
In addition to jobs fueled by the state government, Capital One Financial has a large corporate office in Richmond. But the largest single employer in the area is Virginia Commonwealth University and Health System, which employs 17,744 full-time and 6,490 part-time employees.
#6 – Low Risk: Baltimore-Towson, MD
- Population: 2,710,489
- Unemployment Rate: 10.4%
- Average Income: $62,402
- Average Credit Card Debt: $7,018
- Cost of Living Index: 88.2
Baltimore often gets a bad rap, but in reality, it’s a progressive city in many ways with an economy that is growing (even if that economy reveals a large wealth gap among residents in the city). A solid average income and low cost of living place the Baltimore-Towson, Maryland, metropolitan area in a good spot to face an economic recession.
This is especially true when it comes to a recession fueled by a public health pandemic like COVID-19. Why? Baltimore is home to Johns Hopkins University School of Medicine, one of the top-ranked and most-innovative centers for medical treatment and research in the United States.
In the video below, you can see how Johns Hopkins is at the forefront of providing information about the current coronavirus outbreak.
As COVID-19 threatens to come back with a second wave of infections this fall and winter, we know more and more people, from individuals to public health officials, will be turning to the experts at Johns Hopkins University to make both public health and economic decisions.
#5 – Low Risk: New Haven-Milford, CT
- Population: 854,757
- Unemployment Rate: 7.2%
- Average Income: $56,650
- Average Credit Card Debt: $6,530
- Cost of Living Index: 102.2
The area around New Haven, Connecticut, contains a lot of health care and education jobs. Some of the largest employers in the region include the Yale New Haven Health System, Yale University, Medtronic, and the Waterbury Board of Education.
During an economic downturn caused by a public health crisis such as the novel coronavirus, places with a health care-based economy could fare better than others.
Health care jobs—especially when they include treatment, research, and manufacturing positions such as the medical community in and around New Haven—tend to be more secure during precarious economic periods such as the present.
#4 – Low Risk: Trenton-Ewing, NJ
- Population: 367,430
- Unemployment Rate: 10.5%
- Average Income: $69,344
- Average Credit Card Debt: $7,006
- Cost of Living Index: 80.2
The Trenton-Ewing, New Jersey metropolitan area is located about halfway between New York City and Philadelphia, making it an attractive area for employers and workers who need easy access to both larger cities. Luckily, the Trenton area has a much lower cost of living than either larger city.
Another of the four state capitals found on this list of places most ready to face an economic recession, the State of New Jersey employs over 64,000 people, many of whom call the Trenton area home.
One thing for New Jersey residents to be on the lookout for: The Garden State ranked eighth-worst for coronavirus fraud.
#3 – Low Risk: Charlottesville, VA
- Population: 235,096
- Unemployment Rate: 9.6%
- Average Income: $66,577
- Average Credit Card Debt: $6,539
- Cost of Living Index: 104.5
A beautiful mid-sized city in the foothills of the Blue Ridge Mountains, Charlottesville, Virginia has a lower-than-average unemployment rate and higher-than-average income. Like Boulder, Charlottesville is also a major college town as it is home to the University of Virginia.
As you can see in the video below, many people and companies are drawn not only to the natural beauty of Charlottesville but also to its easy way of life and a surprising number of restaurants and entertainment venues.
Charlottesville is also quickly growing. The city is only behind Northern Virginia—the region around Washington, D.C.—in Virginia’s quickest growing areas.
#2 – Low Risk: Midland, TX
- Population: 134,610
- Unemployment Rate: 10.2%
- Average Income: $122,247
- Average Credit Card Debt: $6,671
- Cost of Living Index: 98.6
Midland, Texas, has the highest average income and smallest population of any metro area we studied. Why is this? This West Texas city is remote, but it is also the center of the oil and gas industry’s drilling operation in the United States. Jobs in this industry must pay more to attract workers to Midland.
The average Midland resident makes more than double the U.S. average income. The current average personal income from the most recent Bureau of Economic Analysis (BEA) for individuals in the United States is $57,205.
In the interactive graph below, you can find some good economic news: Average personal incomes have outpaced inflation since 2010.
As you might suspect, the city of Midland is very much outpacing incomes across the United States. But these incomes are highly dependent on a single industry, which makes Midland more precarious economically than you might first think.
Though Midland is prepared to face a recession, the city also faces a potential problem: If the oil and gas industry is hit hard by an economic downtown, workers in and around Midland will be adversely affected in a big way.
With some of the most expensive auto insurance premiums in the country, however, Texas residents often struggle to find affordable insurance options. USAA and State Farm tend to be the cheapest auto insurance providers in Texas.
#1 – Least Risk: Hartford-East & West Hartford, CT
- Population: 1,213,225
- Unemployment Rate: 7.5%
- Average Income: $64,337
- Average Credit Card Debt: $6,587
- Cost of Living Index: 93.9
Hartford, Connecticut, has one of the lowest unemployment rates in the nation according to most recent data released by the U.S. Bureau of Labor statistics. Coupled with a relatively low cost of living and above-average incomes, low employment is a main reason Hartford lands at the top of our list of places most ready to face a recession.
Like four other cities on this list, Hartford is a state capital, which means the area is home to many recession- and pandemic-secure jobs.
Hartford also provides many opportunities for those seeking a bigger city lifestyle at a lower cost compared to other Northeastern cities. In the video below, you can see what $1,500 a month will get you in Hartford’s downtown core.
As you can see, the places we found most ready to face an economic recession fueled by the coronavirus pandemic tend to have secure centers of employment and relatively low costs of living.
Now we turn to the other end of the spectrum: areas we found riskier when it comes to facing an economic downtown.
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U.S. Metro Areas MOST AT-RISK to Face a Recession
In our research we found that a number of small, mid-sized, and large metropolitan statistical areas across the United States are most at-risk to face a recession based on our four individual economic indicators. You can see how their indicators break down in the table below.
|Metro Area||Unemployment||Avg. Income||Avg. Credit Card Debt||Cost of Living Index||Rank|
|Ocean City, NJ||26.6%||$60,877||$6,858||150.6||3|
|New York-Northern New Jersey-Long Island, NY-NJ-PA||15.1%||$76,681||$7,083||187.2||7|
|Virginia Beach-Norfolk-Newport News, VA-NC||12.1%||$50,619||$7,586||101.4||8|
|San Diego-Carlsbad-San Marcos, CA||15%||$61,386||$6,825||160.1||9|
|Atlanta-Sandy Springs-Marietta, GA||12.7%||$52,473||$7,139||107.5||10|
So what do these areas have in common?
All of them have an above-average cost of living, with many of them being nearly double the national cost of living average. Across the board, these cities also don’t have remarkable average salaries to meet higher costs of living, which puts residents especially at-risk when it comes to economic downturns spawned by public health crises.
Many of these cities have economies centered on more volatile industries—namely, tourism and the military. When an area so heavily depends economically on one industry, it’s always at-risk if that industry faces challenges. Let’s take a closer look at these 10 metropolitan statistical areas.
#10 – High Risk: Atlanta-Sandy Springs-Marietta, GA
- Population: 5,950,828
- Unemployment Rate: 12.7%
- Average Income: $52,473
- Average Credit Card Debt: $7,139
- Cost of Living Index: 107.5
Given the quick rate at which the Atlanta area is growing—it’s the fourth-fastest growing metro area in the nation—many folks might be surprised to see it on our list of regions most at-risk when it comes to facing a recession.
But sadly, Atlanta’s average incomes lag behind the nation’s, and residents have higher-than-average credit card debt.
Additionally, though the cost of living is lower in the Atlanta region than most other areas on this list, the cost of living is still above the U.S. average.
Many consider Atlanta to be the capital of African American life in the United States. The area has a long history of successful Black-owned businesses, such as the Atlanta Life Insurance Company. Alonzo Herndon founded Atlanta Life in 1905. Herndon, who was born into slavery, went on to become Atlanta’s wealthiest Black businessman.
#9 – High Risk: San Diego-Carlsbad-San Marcos, CA
- Population: 3,265,700
- Unemployment Rate: 15%
- Average Income: $61,386
- Average Credit Card Debt: $6,825
- Cost of Living Index: 160.1
The San Diego metropolitan statistical area lands at number 9 on our list of the places most-at risk to face a recession. Though San Diego is a sunny place to live and has some of the happiest residents in the United States, it’s also an expensive place to live, where incomes lag behind the cost of living.
As you can see in the video below, San Diego is the 13th most expensive place to live in the United States.
When you live in a costly region such as the area surrounding San Diego, California, it’s especially important to have savings on hand in the case of an emergency, such as the global COVID-19 pandemic.
#8 – High Risk: VA Beach-Norfolk-Newport News, VA-NC
- Population: 1,729,114
- Unemployment Rate: 12.1%
- Average Income: $50,619
- Average Credit Card Debt: $7,586
- Cost of Living Index: 101.4
The coastal region surrounding the cities of Virginia Beach, Norfolk, and Newport News—which expands across Virginia’s border into North Carolina—is growing. For better and for worse, however, the economic security of the region is based on two primary sectors: tourism and the military.
Tourism is an especially volatile industry during economic recessions, and even more so when those recessions are tied to a public health crisis like the coronavirus.
Forbes reports that the tourism industry is set to face over $910 BILLION in losses due to COVID-19, and warns that these losses could be even bigger if the virus comes back full-force in the fall and winter as many experts suspect it will.
#7 – High Risk: NY-Northern NJ-Long Island, NY-NJ-PA
- Population: 18,351,295
- Unemployment Rate: 15.1%
- Average Income: $76,681
- Average Credit Card Debt: $7,083
- Cost of Living Index: 187.2
The region surrounding New York City is the most densely populated area of the United States. And though in many situations this can be a sign of great economic potential, when it comes to a recession fueled by a highly contagious virus, more people equals more opportunity for the regional economy to be put on hold.
Adding to the metro’s recession worries is the fact that the region surrounding New York City has the second-highest cost of living in the United States behind the San Francisco Bay area.
As you can see in the video below from CNBC, however, rents may decrease substantially in New York as the real estate market recalibrates following the coronavirus outbreak. As New Yorkers think about the future, we’re here to help them weigh the pros and cons of renting vs. owning.
Sadly, the region surrounding New York City also has much lower average incomes when compared to other cities with similar high costs of living. This fact makes many people especially vulnerable in times of economic insecurity coupled with a global health pandemic.
#6 – High Risk: Poughkeepsie-Newburgh-Middletown, NY
- Population: 679,158
- Unemployment Rate: 15.3%
- Average Income: $53,811
- Average Credit Card Debt: $7,049
- Cost of Living Index: 105.7
Number 6 on our list of places most at-risk when it comes to facing this recession keeps us in New York, though it moves us upstate to the region surrounding Poughkeepsie. Though the cost of living is much lower in this region when compared to the Big Apple, residents have much lower incomes and higher unemployment rates.
Poughkeepsie’s economy is intrinsically tied to that of New York City, however. Many NYC commuters live in the region surrounding Poughkeepsie because the Metro-North commuter railroad ends here (placing the city an hour and a half ride to Grand Central Terminal).
As businesspeople think about expanding operations in the Poughkeepsie area, commercial insurance becomes a concern. As public unrest accelerates during the COVID-19 pandemic and Black Lives Matter movement, check out our commercial insurance and riot damage article, which finds that New York commercial insurance rates are the third-highest in the United States.
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#5 – High Risk: Napa, CA
- Population: 79,263
- Unemployment Rate: 15.9%
- Average Income: $74,984
- Average Credit Card Debt: $7,240
- Cost of Living Index: 162.1
As we’ve already discussed, tourism is an especially volatile industry right now, and Napa is the heart of California’s tourist-dependent wine country. Residents here face a high cost of living and above-average levels of credit card debt.
As you can see in the video below from San Francisco’s CBS affiliate, those in Napa Valley’s wine industry have been forced to brace for a financial hit due to the coronavirus.
Of course, residents of the region can help keep their biggest local economic engine alive during such trying times through wine delivery services provided by associations such as Napa Valley Vintners.
#4 – High Risk: Bremerton-Silverdale, WA
- Population: 254,525
- Unemployment Rate: 14.1%
- Average Income: $56,244
- Average Credit Card Debt: $7,306
- Cost of Living Index: 108.9
Located an hour across Puget Sound from Seattle, the Bremerton-Silverdale metropolitan statistical area’s economy is heavily dependent on the United States Navy, which has been especially hard hit by the coronavirus pandemic.
Naval Base Kitsap and Naval Hospital Bremerton employ many service members and civilians alike who call this region home.
Some good news for Washington state residents: Between 2007 and 2017, Washington was one of six states to see a decrease in opioid-related deaths. The state, and especially the Puget Sound region surrounding Seattle, has more medical, mental health, and addiction services available to residents than almost any other state.
#3 – High Risk: Ocean City, NJ
- Population: 92,039
- Unemployment Rate: 26.6%
- Average Income: $60,877
- Average Credit Card Debt: $6,858
- Cost of Living Index: 150.6
Located on the coast of southern New Jersey, the Ocean City metropolitan area is financially dependent upon tourism, especially visitors from the nearby New York City, Philadelphia, and Washington-Baltimore regions. This dependency is reflected in the city’s recent 26.6 percent unemployment figures.
In the video below from ABC News, you can see how areas like Ocean City, New Jersey are striving to create a balance between opening up their economies and keeping people safe through strict COVID-19 measures.
As the second wave of coronavirus infections looms across the United States and around the world, tourism-focused regions like those surrounding Ocean City, New Jersey will face tough decisions regarding economic security and public health.
#2 – High Risk: Anchorage, AK
- Population: 380,821
- Unemployment Rate: 14.3%
- Average Income: $60,953
- Average Credit Card Debt: $8,212
- Cost of Living Index: 123.5
Anchorage, the most populated area in Alaska, lands at the second spot on our list of metro areas most at-risk to face a recession.
Bottom line: Anchorage, like much of the state of Alaska, is an expensive place to live. This high cost of living is reflected in the fact that on average, Anchorage residents have more credit card debt than residents of any other place on this list.
One good piece of news for Alaska’s economic future: It’s a young state. In fact, with an average age of 33.3 years old among its residents, Alaska has the second-youngest population in the United States following Utah. It begs the question when it comes to thinking about personal finances and economic security: What age group holds the most debt?
Members of Generation X hold the most debt, while Millennials have the fastest growing amount of debt. In our interactive graph below, you can track the amount of debt by generation, comparing debts between 2015 to 2019.
As you can see, members of Generation X had an average of $135,841 as of 2019, whereas members of Generation Z had only $9,593.
#1 – Most At-Risk: Honolulu, HI
- Population: 2,079,687
- Unemployment Rate: 20%
- Average Income: $59,608
- Average Credit Card Debt: $6,783
- Cost of Living Index: 176.5
Our research shows that Honolulu, Hawaii, is most at-risk to face an economic recession fueled by the COVID-19 crisis. Why? In addition to a high cost of living outpacing average incomes, Honolulu is dependent upon tourism dollars.
The Associated Press video below shows how the region surrounding Honolulu has come to a standstill during the COVID-19 outbreak.
Though Hawaii has seen relatively few coronavirus infections, the island chain has seen nearly no visitors during this period, which has led to disastrous consequences for the state’s economy.
Professional Advice: Surviving a Recession & Overcoming a Pandemic
We asked a variety of financial and business professionals to offer their thoughts and advice on surviving, and even thriving, in a recession fueled by a global health pandemic. Read on to find out what they had to share.
“I don’t think anyone or any area is completely recession-proof, but for those that are coping, it seems to me that this isn’t just luck. It’s things like a strong community who are willing to help others, plus the added bonus of a helpful local authority system. These simple things seem to make a huge difference in how people get through difficult times.
In areas that are adversely affected, there aren’t enough jobs to go around or there are poorly managed health care centers where individuals aren’t able to access medical help so that they can work when jobs are available.
The economic downturn is the worst since the Great Depression, so it is difficult to put a time frame on it. But it is thought that this could last for two or three years due to the continued worldwide anxiety.
The COVID-19 pandemic has affected the economy due to the lack of communication between countries with all countries suffering themselves. It is difficult for them to offer other countries something they might need in the future because of this uncertainty. Since the pandemic, every industry and every country has been poorly affected, so it will take time to recover.
People have lost businesses, jobs, and family, and students have lost big chunks of learning, which could affect them in the future.
There is a chance that there could be a second wave so, to prepare, save where possible. If your business is still open, make sure to prepare for more staff cuts and more financial struggles. My advice is to take care of you and your family’s health and, where possible, prepare financially in case this continues or worsens.”
Andrew Roderick is the CEO of Credit Repair Companies.
He’s a real estate investor who has taught credit repair for over 15 years.
“Recession-proof areas are able to be relevant throughout periods of time and are able to bounce back after small financial changes. Personally, I think that this recession will last a smaller amount than the last one because we have had time to prepare.
It did not happen overnight, and while there is trouble with unemployment and companies having to shut down, I believe that bouncing back from this will be easier than we have seen before. While more people are unemployed, we have seen a boost in remote working as well as investments.
The economy will get back to normal, but a new normal might just be exactly what we need right now. The coronavirus has affected the economy quite heavily. We have seen many people having to stop working or go on furlough because companies are not making enough money at the moment to stay open at this time.
Over the course of the rest of the year, I think we will still see the effects of the virus continue to push people out of work as well. To recover we need to see support coming from every avenue, for the smaller corporations as well as the bigger ones.
Smaller companies can survive this with the right amount of support and guidance. Help more people move their business online and give them loans where possible. The money can be made back but this can only happen if the opportunity is allowed for them.
With both the bigger and smaller companies having this help, everyone can succeed and come out of the recession, maybe even better than when they went into it.”
Ethan Taub is the founder and CEO of Loanry.
Loanry offers business and personal loan advice and comparison shopping.
“I live in Austin, which I feel has survived recessions fairly well in the past. It’s always a struggle on an individual level, but my wife is from a small town, and 60 percent of the businesses shut down there due to the 2008 recession. She expects it will be even worse this time.
In terms of why this city may be ‘recession-proof,’ I think there are a lot of job opportunities and ways to keep the economy churning even if people aren’t visiting retail stores and restaurants like they were.
There are a lot of tech startups here that are always looking for new employees, and their revenue hasn’t really been affected by the coronavirus.
I definitely feel the economy will really take a nosedive when the inevitable second wave hits. As much as the federal government may want to pretend this problem is over, it very much isn’t. We’re going to have to go back into lockdown or face dire consequences. Of course, this will impact the economy and continue to put this recession on a fast track to being one of the worst in this country’s history.
I’d say anyone wanting to prepare should do what they can to settle up any debts now, and prepare a list of monthly expenses. Cut down your budget as much as you can. Be mercenary about it. Practice that while there’s ‘still time’ so you have the opportunity to adjust. And as always, be willing to look for jobs outside of your field in the event you’re laid off.”
Dan Bailey is the founder and president of WikiLawn Lawn Care.
Having started his business before the ‘08 crash, he’s well-versed in surviving a recession.
“Recession-proof areas tend to have both low unemployment rates and affordable housing. One of the reasons for those low unemployment rates is there is some industry providing job security.
These industries can be varied, from oil and agriculture to a large energy sector. It can even be universities and the state giving stable jobs insulated from a recession. What matters is there is some predominant industry there to provide employment.
Housing Booms Hurt
Areas hit worst by recessions have often had a recent housing boom. As is the law of economics, a housing boom will lead to a housing bust eventually. On the contrary, recession-resistant cities have usually never experienced a rise in real estate prices.
Recovery is Slow
Studies are showing that the recession will last at least all of 2020, if not longer. Some experts are estimating things to start returning to normal by January 2021. Then again, these are merely estimates.
The Great Depression lasted 10 years and only improved once policymakers made drastic changes. Hopefully, things reopening in 2021 and more stimulus policies will help this recession come to a swift halt.
Savings Pay Off
Individuals can prepare for the second wave of COVID-19 by ensuring they have substantial savings. Most experts recommend determining living expenses such as rent, food, and utilities for one month. Then, you should multiply that number by three to six months.
Having a healthy savings account for emergencies can also help provide ease of mind before and during a disease outbreak. You can use side hustle money if needed to build up these savings.”
Xavier Morales, Esq.is the CEO & founder of Secure Your Trademark.
He has been a trademark attorney in Texas for over 10 years.
“In my experience, areas with a lower cost of living (especially low housing costs) and a low unemployment rate fare the best in recessions. These are often cities that have jobs unaffected by the recession. I lived in a university town for a time, and the jobs with the college tended to be extremely secure, keeping the unemployment rate down.
The cities that struggle rely greatly on consumer-driven profits. When people are saving their money and not spending on big-ticket purchases, car dealerships (for example) suffer greatly. Retail stores face the brunt of this, too, and tend to ‘downsize’ when this becomes an issue.
As for this recession, I see it lasting through 2021. I think it’s way too optimistic to believe it’ll be over by the end of the year. We’re not even likely to have a vaccine by then, and until we do, many people won’t feel secure. That lack of security means decreased spending and less money circulating in the economy.
Surviving a recession is difficult under normal circumstances, but I think it’s going to be even harder with the coronavirus still in play.
There are and will continue to be gaps along the supply chain for many necessary goods, which could mean price hikes as the demand outpaces the supply.
It will be more important than ever to plan even everyday purchases strategically. We’ll all have to work around sales, buy in bulk, etc. Also, I highly recommend people diversify their sources of income if at all possible. This will often mean doing something on the side, whether it’s offering your skills on a contract basis or finding a way to monetize whatever talents you may have.”
Rex Freiberger is the President of GadgetReview, a tech & lifestyle publication.
He helps consumers make smart purchases.
“Especially after the U.S. government instituted 25 percent tariffs on foreign steel and other products earlier this year, manufacturing has come back to the Great Lakes, Columbus, and Southern Ohio areas with a good-spirited vengeance.
Rather than having to pay that surplus for steel—not to mention a bevy of other products and trade-related expenses—companies are finding it easier to bring the manufacturing step of the supply chain back to the United States.
Trucking companies have returned to fill out their fleets. In turn, this brings about a positive knock-on effect: More production means the need to develop more advanced tech such as robots to sustain output. This means the need for more engineers and more research dollars flowing into the economy, creating a virtuous circle of manufacturing, technology, human intellectual capital, and grants.
Beyond heavy industry, manufacturers in the Ohio region are creating those often-forgotten products vital to other industries. Case in point: bottles for Bath & Body Works lotion, the parent company of which, L Brands, is based right here in Columbus.
Hardly a day goes by in the tech and startup industry press about venture capital funding drying up amid COVID-19. While the economic reality of late is unfortunate, there is a silver lining for the manufacturing industry: The sectors that Ohio Region-area manufacturers support are the ones that are showing resilience—if not growth—during the pandemic.
About 70 to 75 percent of Ohio’s manufacturers were deemed essential businesses and remained open during the pandemic, with some pivoting to produce key items to the medical industry’s fight against the virus, including ventilators and personal protective equipment.
Moreover, given the local manufacturing sector’s longstanding ties to the government and military, many local businesses are eligible for non-dilutive capital, a source of funding that is generally immune to economic winds.
The U.S. manufacturing sector is poised for a rebound and has a long-term upward trajectory in the rejuvenation of the industrial Midwest/Great Lakes.”
John Bair is the co-founder and CTO of Converge Ventures. He’s the founder of the Center for Design and Manufacturing Excellence (CDME) at The Ohio State University.
Frequently Asked Questions: Recessions & America’s Financial State
We know some questions probably still linger following our rankings of the metro areas most- and least-prepared to face the current recession brought on by the COVID-19 crisis. Let’s take a look at a few of those questions.
#1 – How bad will the COVID-19 recession be?
Projecting the total effects of any recession is an impossible task, and that is especially true in a recession tied to a global health pandemic. But we can make educated predictions. The World Bank expects the current coronavirus-fueled recession to shrink the global economy by 5.2 percent, the deepest recession we’ve faced since the end of World War II in the 1940s.
#2 – How much do Americans make?
As we’ve already discussed, the current average personal income for residents of the United States is $57,205.
Whereas the average income adjusted for inflation alone would have been $48,350 in the most recent BEA report, incomes outpaced inflation and were nearly $10,000 above the inflation-expected figure. That’s some great news: Average personal incomes have outpaced inflation since 2010, which you can take a look at in our interactive map above.
#3 – How much debt do Americans have?
As of 2019, residents of the United States had a total of more than $14.1 trillion in debt. According to Experian, this debt included:
- Mortgage loans: Mortgage debt is at an all-time high of $9.6 trillion.
- Auto loans: Auto loan debt is at a record high of $1.3 trillion.
- Student loans: Student loan debt is at a record high of $1.4 trillion.
- Credit card debt: Consumer credit card debt is at a record high of $829 billion.
- Home equity lines of credit (HELOCs): HELOC balances total $420 billion.
- Personal loans: Personal loan debt totals $305 billion.
- Retail credit card debt: Retail credit card debt is at a record high of $90 billion.
The average American has $90,460 in debt.
#4 – What is the difference between a recession and a depression?
Good question, as these two terms are often used interchangeably despite having important differences. Merriam-Webster explains that:
“A recession is a downtrend in the economy that can affect production and employment, and produce lower household income and spending. The effects of a depression are much more severe, characterized by widespread unemployment and major pauses in economic activity.”
#5 – How do you survive a recession?
Whatever our financial or employment situation, we can all take active steps to help our family survive an economic recession. Forbes released some helpful tips on what to do and what not to do to survive the current COVID-19 recession.
#6 – Is the U.S. going into a recession in 2020?
Although the U.S. economy fell into a recession during February due to the effects of the coronavirus pandemic, it has since partially recovered with businesses taking advantage of the most recent stimulus or relief package put together by Congress to fortify the economy and help it stabilize.
While there are still warning signs, such as reduced consumer spending, many are optimistic that the economy will recover, not just in America but throughout the world.
#7 – What happens if the U.S. goes into a recession?
Generally, when the U.S. or any country falls into a recession, businesses fail to generate the same amount of revenue as before the recession, resulting in job losses and layoffs. This, along with general fear, can cause people to save their money and spend less, which can further slow down the economy.
#8 – When was the worst recession in the United States?
The worst recession, according to many, that the U.S. has had was the Great Recession, which officially lasted between 2007 and 2009, although its effects could still be felt into the early 2010s. It was caused by a collapse in the housing market where banks were offering loans to people with dubious credit history, which all fell apart, shocking the system and sending housing and property values tumbling.
#9 – Why is a recession bad?
Recessions are considered bad because they result in layoffs and job cuts, which deprive people of income and the ability to pay bills, such as rent. This, along with tightened purse strings from those who have a job or not, can slow down the economy even further. Investment also stalls, which affects an economy’s ability to grow.
Some people believe, however, that recessions aren’t all bad and can eliminate companies that are not contributing much to the economy in the first place and allowing new entrepreneurs and businesspersons to adhere to the new rules and better their business practices in response to the problems that caused the recession.
#11 – Where does the money go in a recession?
In a recession, there is no overall drop in wealth, according to some, but that money or new money isn’t circulating. This is due to the average person’s saving of money rather than spending it and banks being unwilling to offer loans for fear of lack of repayment.
This hurts growth and investment in an economy, which are essential for pulling out of a recession.
#12 – How did the U.S. recover from the Great Recession?
The U.S. recovered from the Great Recession through stimulus packages that attempted to jolt industries into growth and large bailouts of banks that had offered dangerous, subprime mortgages and had been burned due to lack of payment.
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Complete Rankings: Metropolitan Areas & Economic Indicators
Though we’ve ranked the 10 cities most- and least-ready to face the current economic recession above, in the table below we provide the complete rankings based upon available data for our four economic indicators.
|Metro Area||Unemployment||Avg. Income||Avg. Credit Card Debt||Cost of Living Index||Rank|
|Hartford-West Hartford-East Hartford, CT||7.5%||$64,337||$6,587||93.9||1|
|New Haven-Milford, CT||7.2%||$56,650||$6,530||102.2||5|
|Norwich-New London, CT||13.7%||$59,264||$6,677||93.5||13|
|Pensacola-Ferry Pass-Brent, FL||12%||$43,259||$6,615||92.8||14|
|San Francisco-Oakland-Fremont, CA||13.2%||$99,424||$6,659||269.3||16|
|Killeen-Temple-Fort Hood, TX||11.3%||$41,634||$6,995||83.5||20|
|Fort Walton Beach-Crestview-Destin, FL||13.6%||$51,655||$6,719||92.3||22|
|Naples-Marco Island, FL||13.4%||$92,686||$7,052||111.9||23|
|Tampa-St. Petersburg-Clearwater, FL||13.1%||$47,240||$6,703||100.1||28|
|Oxnard-Thousand Oaks-Ventura, CA||14%||$61,712||$6,840||138.5||31|
|New Orleans-Metairie-Kenner, LA||18.8%||$52,431||$6,693||96.3||32|
|Charleston-North Charleston, SC||12.1%||$50,958||$6,913||111.5||33|
|Dallas-Fort Worth-Arlington, TX||12.8%||$55,886||$7,291||101.6||35|
|Houston-Sugar Land-Baytown, TX||14.2%||$56,077||$7,205||96.5||36|
|San Antonio, TX||13.2%||$46,995||$7,210||89.7||37|
|Miami-Fort Lauderdale-Pompano Beach, FL||13.2%||$57,228||$7,058||123.1||39|
|Austin-Round Rock, TX||12.2%||$58,773||$7,329||119.3||40|
|Atlanta-Sandy Springs-Marietta, GA||12.7%||$52,473||$7,139||107.5||41|
|San Diego-Carlsbad-San Marcos, CA||15%||$61,386||$6,825||160.1||42|
|Virginia Beach-Norfolk-Newport News, VA-NC||12.1%||$50,619||$7,586||101.4||43|
|New York-Northern New Jersey-Long Island, NY-NJ-PA||15.1%||$76,681||$7,083||187.2||44|
|Ocean City, NJ||26.6%||$60,877||$6,858||150.6||48|
While Ocean City, New Jersey, and Honolulu, Hawaii, were the only metro areas we studied with unemployment rates over 20 percent, other cities are at a high recession risk due to their high cost of living coupled with average incomes. One such example? Boston-Cambridge-Quincy, MA-NH. The Boston region has a cost of living index of 162.4 and an average income of $78,694.
Methodology: Recessions & Individual Economic Preparedness
For this study on the recession readiness of American metropolitan statistical areas, we looked at over 8,000 data points from all 50 states across the United States and the District of Columbia to rank the metro areas best- and least-ready to weather the current economic recession fueled by the coronavirus pandemic.
We relied on reputable data from the U.S. Bureau of Labor Statistics, Experian, the U.S. Bureau of Economic Analysis, and BestPlaces to determine each metro’s performance of the four economic indicators we consider essential to recession preparedness.
We hope our ranking and compiled advice helps you to consider the ways you and your family can best prepare for this economic downtown. Armed with the knowledge that brings us to a place of higher financial literacy, we can all be better prepared to weather this recession.
That includes on the insurance front as well, where saving a little money by switching providers or finding the right insurance company for you can make the difference during difficult financial times. Discover the best insurance rates for you by using our FREE online quote generator. It’ll give you the best rates for you based on your demographic data and area.