Paul Krugman writes:
For various reasons I’ve been doing a lot of walking around the past few days, in both Princeton and New York, visiting areas I haven’t looked at for several months. And I’m not sure what to make of it, but casual observation suggests a stronger recovery than anything I see in published numbers. Lots of small-scale construction — home remodeling, tear-downs replacing old houses. Many new businesses and restaurants filling storefronts that were vacant a couple of months ago.
Appearances could be deceiving. Also, both NYC and Princeton are likely beneficiaries of the return of big Wall Street bonuses, making them unrepresentative.
Still, there’s the observation: walking around, things look better than I expected.
Here in Brookland, I noticed something like this about two or three months ago. A bunch of small projects — a house rehab, a nearby condo conversion — that had been on ice for a year or two had people back at work. It was like everyone decided that things were looking up, and it was ok to bet on the future again.
I don’t think this is surprising, though, and I don’t really think it conflicts with the data. The unemployment rate in the District is 11.4%, but among the groups which might be interested in purchasing a rehabbed house or a new condo, I suspect it’s under 3% and falling. In general, things have been relatively good in the northeast corridor, and for white professionals within the northeast corridor they’ve been really (relatively) good. Both housing overhangs and labor market slack for those regions and demographic groups are pretty limited, and so they’ll snap back fairly quickly.
But for less skilled workers, or minorities, or people in Michigan or inland California? Well, I suspect a lot of people are walking around thinking, “Man, things seem much worse than the data indicates.”