Louisiana Is Pulling Through National Recession With Little Pain

At the beginning of last year the question was, to what extent will the national recession hit Louisiana? The answer, according to the Federal Reserve Bank of Atlanta: not much. “Louisiana was one of the last states to see the impact of the national recession,” said Mike Chriszt, assistant vice president at the Federal Reserve Bank of Atlanta, which each January reviews economic trends in the region. “Even though the recession touched Louisiana a bit harder in 2009, it still didn’t have the impact that it did in other parts of the country.” Elsewhere in the region, job losses in places like Florida and Georgia started earlier and hit harder as the housing market endured a much bigger correction, manufacturing declined and both leisure tourism and business travel plunged. In Louisiana, job losses were shallow, and unemployment rates are improving. In September at the end of the third quarter, for example, the unemployment rate in Louisiana was 7.4 percent. By November, the unemployment rate had fallen to 6.7 percent. December figures will be released next week. By comparison, the national unemployment rate was 10 percent. Even though Louisiana entered the recession later, the state won’t necessarily stay in it for longer. “I think this year, we’re going to see stabilization in labor markets pretty much everywhere. I don’t see any reason why we’d see continued job losses in Louisiana when they’re stabilizing in other parts of the country,” Chriszt said. Trends bolstering that argument include stabilizing international trade, which will benefit the Port of New Orleans; increasing commodity prices, which will stem energy sector layoffs and help the state’s budget; and continuing work on rebuilding the levees. The exception to that sunny outlook is tourism. In 2009, Louisiana festivals reported increased attendance, but traffic at Louis Armstrong International Airport was off, suggesting local day-trippers accounted for the crowds rather than tourists. Total outgoing flights and passengers in New Orleans were at their lowest levels since 2003, with the number of outgoing flights falling 37 percent and the number of passengers falling 34 percent since 2008, according to the Atlanta Fed’s report. With a huge drop in auto manufacturing jobs around the region and other carnage from the recession, many consumers in the Southeast simply don’t feel comfortable spending the money to travel. “Consumers are continuing to be very spendthrift. That’s going to have an impact on New Orleans,” Chriszt said. “There’s reason to think that 2010 will remain a pretty tough year as far as tourism is concerned.” h5. Links To access a summary of the Fed’s Current Economic Conditions report, click here