The Southeast economy in 2010 was much like the nation's, only more so.
Simply put, we have a steeper climb ahead. After weathering the past four national recessions comparatively well, the Southeast may have paid in the most recent downturn for its past successes. Rapid population growth and its attendant industries, such as construction and retail, powered the region's bellwether states of Florida and Georgia through earlier national slumps. But as the Southeast lived by the hammer, this time it was hammered by the hammer. Florida and Georgia suffered severe housing market woes, widespread job losses, and numerous bank failures. Florida alone accounted for an outsized 50-plus percent of the region's employment losses during the recession. The state was home to about 40 percent of all jobs in the Southeast as of November 2007, the month before the recession officially started.
Certainly, 2010 brought some encouragement, but the year was one step in what promises to be a long recovery. Small improvements emerged in the region's major economic sectors, including banking and credit markets, tourism, and energy production. Auto manufacturing was a standout. The region's assembly plants and the parts makers added 1,000 jobs, bringing the regional total to 75,000, according to the U.S. Bureau of Labor Statistics, or BLS. Three more assembly plants will open in the region in 2011 and 2012.
The bigger picture, however, remained clouded. The Southeast's progress was hindered by several intertwined forces: tepid employment growth, general economic uncertainty that restrained consumer and business spending, challenging banking conditions, and still-sickly housing markets in the region's largest states and metropolitan areas.
In this report, we examine the region's economic fortunes in 2010. We also explore the Federal Reserve Bank of Atlanta's efforts to cultivate a deeper understanding of the complex dynamics underlying this performance and the ways in which monetary policy can make a difference. More specifically, we address the vexing problem of persistent unemployment in the Southeast, banking conditions, and the role of small business in job creation and economic recovery. In this report, "Southeast" refers to the six states of the Sixth Federal Reserve District in their entirety: Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennessee.