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10 Years Later: Greater San Marcos and the Great Recession

As hard as it may be to believe, we are approaching the 10-year milestone of the start of the Great Recession, which the National Bureau of Economic Research (NBER) dates as beginning December 2007 and ending 2009. Widely recognized as the worst financial crisis since the Great Depression on both a national and global scale, the recession contributed to the loss of approximately 8.7 million jobs and a contraction of 5.1% of GDP in the U.S. between February 2008 and 2010. (U.S. Department of Labor). U.S. unemployment rose from 4.7% in November 2007 to 10.0% in October 2009 and would not recede to its pre-recession level until May 2016. (U.S. Bureau of Labor Statistics).

Economic recovery following the formal end of the recession has been notoriously sluggish; a number of major metropolitan statistical areas (MSAs) across the country did not rebound to pre-recession aggregate employment levels until mid-2015 or later, including Los Angeles-Long Beach, Chicago-Naperville, and Phoenix-Mesa, among many others. (U.S. Bureau of Labor Statistics). MSAs across the nation weathered the recession with dramatically varying resilience and, likewise, have experienced diverse levels of recovery success in the years since the end of the crisis.

As we approach the tenth year since the start of the financial crisis, it seems an appropriate time to review how Greater San Marcos (Hays and Caldwell Counties) has performed in its post-recession recovery, particularly in the in the context of the respective economic performances of the Austin MSA, the state, and the nation. There are a variety of ways to gauge economy recovery. For our purposes, we took a look at aggregate employment data. 

The resilience and strength of the economy of the Austin MSA during and subsequent to the Great Recession has been widely noted - and for good reason. As highlighted previously, it took years for many major MSAs to reach pre-recession aggregate employment levels; many MSAs did not do so until this year. Meanwhile, the Austin MSA experience one-month of negative employment growth in December 2007 (the first month of the recession) after which aggregate employment grew by miniscule, but positive figures throughout the remainder of the recession. 

Following months of stagnant but positive growth, Austin MSA employment saw a steep jump in late 2009 and has been climbing at a robust and generally consistent rate ever since. By the time the national aggregate employment figure rebounded to its pre-recession level, Austin MSA total employment had grown by over 23% relative to its own pre-recession employment figure. Graphed employment data for a diverse range of MSAs across the nation help to effectively illustrate just how relatively well the Austin MSA economy fared during the Recession (at very least within the context of aggregate employment) and how robust its recovery has been up to late 2017.

 Total Non-farm Employment Index numbers - Pre-Recession (as of September 2017)

Understanding the Austin MSA's economic resilience during the recession and remarkable post-recession recovery helps to place the economic performance of Greater San Marcos into proper perspective. Similar to the Austin MSA as a whole, Greater San Marcos experienced a one-month dip in aggregate employment level in December 2007, followed by steady and generally consistent growth up to late 2014. (Texas Workforce Commission). 

Greater San Marcos employment growth accelerated in early 2015, propelling regional employment relative to pre-recession levels over that of the Austin MSA's, a dynamic that has continued to date. In September 2017, Greater San Marcos aggregate employment had grown by over 38% relative to its pre-Recession level; similar figures for the Austin MSA, Texas, and the United States were 35%, 17% and 5%, respectively. The visualization below shows not only Greater San Marcos's growth in perspective of our MSA, state, and nation, but also parses out the growth rates that our respective counties have experienced we have since November 2007. 

Total Non-Farm Employment Index numbers - Pre-Recession (as of September 2017) by county.

As we conclude a decade since the start of the Great Recession, it's exciting to consider the robust growth of Greater San Marcos through a challenging economic time in our nation. Viewing the growth of Greater San Marcos within the context of the wider macroeconomic climate helps to underscore both the economic strength and potential of our region. Greater San Marcos has exhibited a capacity to withstand extreme macroeconomic downturn and bounce back with robust recovery at rates far outpacing even some of the most economically vibrant areas of our nation. Going forward, the possibilities are momentous given what we have shown we can accomplish thus far. In other words, given the economic performance of our region throughout the climate of the past 10 years, we're eager to see what our region can do in the coming 10 years within the context of a state and nation in steady economic condition. 

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