Regional fortunes seem to be constantly shifting, said Janet Norwood, labor statistics commissioner, in her monthly employment report to Congress. The striking stability of the national jobless rate over the past two years, she told the Joint Economic Committee, has disguised substantial and important regional shifts. During the past 12 months, for example, the nation's official monthly jobless rate has varied from 5.3 percent only three times _ in May 1989 and in March 1990 when it read 5.2 percent and in April 1990 when 5.4 percent was recorded. Remarkable stability indeed. But only when you average things out, and averages are not what people live by. The jobless rate in New England, for example, had been unusually low a year or so ago, in some communities as low as 3 percent, which statisticians believe is about as low as you can get. But in the past year, unemployment in that six-state New England region has risen 2 percentage points, bringing the situation there close to the national average. The Southern region also has been closing in on the national average, but from a different direction. Rates there, which had been among the highest in the nation, have been improving, i.e. going the opposite way. It is out of such differences that national averages come into being. They are official. They are highly publicized and analyzed. They produce profound documents on possible policy implications. But to residents of those two huge areas of America, especially jobseekers and jobholders, those official statistics mislead. Generally speaking, said Norwood, ``the last year has seen some convergence of state and regional unemployment rates, with the worse-off areas improving and the best deteriorating.'' This is a big country, statisticians explain, and some of them say it is about time the differences were recognized. U.S. regional economies, they say, are as big as the economies of major industrialized nations. Geographical differences aren't the only ones. Sector differences are just as pronounced. Job growth in manufacturing has been weak, but until the past few months it had been strong in services. Health-care costs and employment have been beating an independent path upward for years. It is in the geographical area, however, where the vastness of the separate American economies is most pronounced. While homebuilding is off in New England, where it had been booming, it is up in Houston, where it had collapsed. While economies of some Rocky Mountain and Southeast states are depressed, several Midwest states are well off. One well-known market research firm, Sindlinger & Co., claims that it is only a specific interpretation of statistical evidence that keeps the Commerce Department from recognizing that a national recession might already exist. It's not the first time such a situation has existed, says Albert Sindlinger, whose research suggests there are far more states in recession than are free of it, but that the national averages disguise their plight. Vivid contrasts always can be found among geographical and sectoral areas, and that poses an enormous challenge to those who handle the economic levers, such as Federal Reserve officials. The Fed mechanism, it has been demonstrated in the past few years, can be very sensitive to national statistics; it has used them, for example, to skirt the fine line between economic growth and shrinkage. But it is not nearly as adept at handling regional or sectoral statistics. One of its most effective tools, for instance, is the fine tuning of interest rates nationally, but interest rates and the availability of funds still vary greatly from area to area. National economics, not microeconomics, is its specialty and, with regional economies growing and going their independent ways, microeconomics might be the big challenge to be met.
