How did Maine fare through the recession and recovery? Well, we don’t know for sure and it’s more complicated than one number, but preliminary data from the Bureau of Economic Analysis bolsters a storyline that Maine wasn’t one of the Great Recession’s swing states.
That is, the lows weren’t as low and the swing back to recovery also hasn’t been quite as quick. This is from prototype estimates, released this morning, that the U.S. Bureau of Economic Analysis is preparing for an official in early 2015, so don’t go running around like it’s official.
Still, the data is interesting and in line with the BEA’s growing offerings that adjust personal consumption or income figures for regional differences in prices.
That is, they make state-by-state comparisons fairer by adjusting for differences from one region to another. Here’s what the Department of Commerce says about the promise of the new data set:
Why is [personal consumption] important? Because consumer spending is a major driver of the U.S. economy’s overall health… The new report will also and importantly help inform decision making by businesses in hiring, investing and locating a company.
That decision-making help comes in part from personal consumption spending data by specific categories of household spending (which I’ll get into in a later post).
What’s most notable from a review of the top-level data is that Maine was the only state in New England and much of the country where personal spending on goods and services didn’t decline in 2009.
The chart below shows how 2009 personal consumption expenditures changed from the previous year.
Maine was joined by states including West Virginia, Louisiana, North Dakota and Iowa in having positive personal consumption growth over that time. Nationally, personal spending dropped 1.42 percent in that year, the only year of national decline since 1997.
Flipping forward to 2012 (using the “year” selector in the above chart), Maine’s growth in personal consumption is lower than the national and regional average, providing another indicator that Maine’s bounce back from the recession isn’t as fast as other states.
That’s in line with a general trend Glenn Mills, chief economist at the Maine Department of Labor’s Center for Workforce Research and Information, noted in talking to me for a previous blog post about gauging the state’s recovery from the recession.
Maine, without major dependence on industries like finance or car manufacturing, didn’t get hit as hard through the recession but accordingly hasn’t bounced back as quickly as other states. Add to that: Economists are still trying to figure out whether to measure progress against the past or whether the recession junked things up enough to lead to a “new normal.”
About the latest BEA data, Mills said it reflects to him population trends across the country. At first glance, he wrote in an email: “It is no surprise that the faster growing population in the west also has faster growth in total consumption.”
Amanda Rector, the state economist with the Governor’s Office of Policy and Management, said she’s still focused more on the methodology of the latest release rather than the results of the prototype statistics. “It’s exciting to have a new data set available, but I have some reservations about the still-in-development nature,” Rector wrote.
David Vail, a Bowdoin College professor and economist who I happened to be interviewing for another story this morning, said the price-adjusted data from the BEA will be more useful to policymakers than the previous data sets, “once all the bugs are ironed out,” he said.
The BEA is scheduled to release an official version of the data sometime next year after its methodology gets feedback from economists and other users of its data.