Some Parts Of The US Are Still In Recession

This article describes the uneven economic recovery in the US. Areas that were hit hardest by the boom and bust in real estate prices are still in recession. Small local businesses have suffered the most in these areas. Unlike national businesses, they are unable to sell their products and services in parts of the country that are making a stronger recovery. The deleveraging of mortgage debt will limit spending and recovery in the harder hit parts of the country for a long time. Most of the households in these areas do not have savings or other assets to offset their real estate losses. Furthermore, banks have responded to their losses from bad loans by tightening credit. The boom in these areas was based upon credit and the loss of credit exacerbates the bust.

This problem is not unique to the US. Ireland and Spain are going through the same kind of real estate and credit cycle.