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The U.S. unemployment rate was 9.7% in January. But that big number blurs what's happening in hundreds of local economies — some winners, some losers — during this harsh, job-destroying recession.
The nation's 372 metropolitan areas are experiencing an extraordinary range of jobless rates — from a low of 4% in Grand Forks, N.D., to a high of 27.7% in El Centro, Calif.
The simplest explanation may be the most telling: The bigger the housing bubble, the worse the job loss. That's still true more than two years after the housing bubble burst.
PHOTOS: A tale of two cities: Lincoln and Merced
"So much employment growth was tied to construction that states that had the biggest boom —California, Florida, Arizona, Nevada— have suffered the worst job loss," says economist Gus Faucher of Moody's Economy.com.
The middle of the country — from Texas to North Dakota— missed most of the real estate growth and, to a large extent, the comedown. "These (middle of the nation) economies are less cyclical and less exposed to the nation's business cycle," Faucher says.
College towns and state capitals also have enjoyed an extra degree of stability, keeping unemployment low in some places.
RECOVERY WATCH: Tracking the economy; see VIDEO JOBS OUTLOOK: Latest data for all states, 384 metros
To understand why some places are winning and others losing, USA TODAY examined a pair of No. 2s — the metropolitan areas of Lincoln, Neb., which has the second-lowest metro area unemployment rate in the United States, and Merced, Calif., which has the second-highest.
Lincoln symbolizes a swath of the central USA with economies that didn't have wild highs and lows during the last decade.
Merced represents the opposite. Here are their stories:
Lincoln: Steady as she goes
Lincoln's economy has been good for so long that it's hard for many there to remember bad times.
The unemployment rate in the vibrant metropolitan area of 296,000 is just 4.1%, second-lowest in the nation.
The rate has never been above 5% since the Bureau of Labor Statistics starting tracking it 20 years ago.
"It's like we're on our own island out here," says Jason Perry, a Wisconsin-born rental car manager who moved to Nebraska in 2008, when his wife, Robin, got a job in nearby Omaha, which also has low unemployment.
Lincoln is home to a major research university and national and regional headquarters for several substantial companies. It is surrounded by farms that export worldwide.
The metro area — built on the edge of the Great Plains — has the good fortune of being at the convergence of several positive trends in a dangerously weak national economy. Lincoln is:
• A college town, home to 24,000 students at the University of Nebraska-Lincoln. Nine of the 10 metro areas with the lowest unemployment rates have major universities.
• A state capital, benefiting from a stable workforce of government jobs.
• Part of a farm economy at a time when farm income has been at or near record highs.
Just as important, Lincoln missed the real estate bubble, so it's not suffering withdrawal from a construction boom caused by too-easy credit.
Tom Henning, chief executive of Assurity Life Insurance of Lincoln, can't recall any significant speculative office buildings or shopping centers getting built in Lincoln during this decade's national real estate boom that ended in 2007.
During an interview, Henning calls the company's head of real estate lending on a speaker phone to check his memory.
Investment chief Bill Schmeeckle pauses for a long time as he recalls what's been built in Lincoln during the past several years.
"No. None," he says.
Henning says a real estate developer who approached Assurity Life about financing a speculative building would have been met with the common-sense question: "You mean you want to build it, but you don't have any tenants yet?"
Construction in Lincoln proceeded at a steady, moderate pace during the last decade — and that continues today.
Assurity Life is building a new $53 million corporate headquarters. The university is developing a new research park. In May, voters will decide whether to approve bonds to start a $334 million arena for the university's basketball team.
The city's historic Haymarket District continues to slowly but steadily add new businesses.
The Bar & Grill has hung a sign at its future location: "Now Accepting Applications for All Positions."
Trent Taylor, 28, who recently quit his job as a cook, says he's not worried about finding work.
"There's work around, just not always what you want," says Taylor, smoking a cigarette outside a government career center in downtown Lincoln.
Lincoln hasn't been immune to the recession. A total of 6,800 people were unemployed in December in a labor force of 167,000. That's an increase of 1,150 from a year earlier.
"We've absolutely had job losses," says Eric Thompson, a University of Nebraska economist. "It just doesn't feel like the worst recession in 30 years or longer."
One reason: Nebraska has among the nation's highest rates of people holding multiple jobs, Thompson says. That means people can lose one job or be employed below their skill level, yet not count as unemployed.
Nebraska, with its high level of education, and Lincoln, in particular, have a labor force that's attractive to employers.
"We might have someone with an economics degree working as a clerk," Henning says.
Lincoln's diversified economy has more than 100 companies and agencies that employ 250 or more workers, including a robust manufacturing sector. Kawasaki makes New York subway cars here, along with all-terrain vehicles and Jet Skis.
Nick Cusick, chief executive of IMS Corp., says manufacturing has been helped by electricity rates 25% below the national average.
A key reason for the low rates: Nebraska is the only state that generates all its power from government-owned utilities.
Thriving entrepreneurship and the lack of a major union presencealso have helped keep Nebraska manufacturers competitive, says Cusick, who started his company with a high school buddy in 1974.
Today, Cusick and his friend are still 50-50 partners in a company that employs 200, down from a peak of 275 in 2008.
IMS makes football goalposts, basketball hoops and electronic signs and scoreboards. The PGA Tour's electronic leader board is one of its products.
Cusick thinks his region's "common sense" culture helps Lincoln avoid economic peaks and valleys.
Nebraska companies typically are reluctant to take on debt because of this conservative culture, he says. Nebraska's constitution even prohibits the state from borrowing money.
"The Nebraska sensibility — whether it's in the public sector or the private sector — is to be cautious," Cusick says.
Cusick vacations in Scottsdale, Ariz., every March and November. Between visits there, new shopping centers would appear there during the boom years. "Lot of vacancies now," he says.
Lincoln was different that way. No boom, no bust. Still hiring.
Merced: 'Like a bomb went off'
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