Economic stress declined in the nation's most troubled areas in February as unemployment stabilized and the pace of foreclosures eased, according to The Associated Press' monthly analysis of conditions in more than 3,100 U.S. counties.
After peaking in January, economic stress dipped in February in half the states and half the 3,141 counties.
"We are not out of the woods yet, and there are still a lot of things that could go wrong, but things are improving," said David Wyss, chief economist at Standard & Poor's in New York.
The AP's Economic Stress Index found the average county's score in February was 11.8. That was down slightly from January's reading of 11.9, the highest average county score since the AP started publishing the index nearly a year ago. The reading in December was 10.8, the previous high.
The index calculates a score from 1 to 100 based on a county's unemployment, foreclosure and bankruptcy rates. A higher score indicates more stress. Under a rough rule of thumb, a county is considered stressed when its score exceeds 11.
Fewer than 55 percent of counties were deemed stressed in February, slightly less than in January.
The nation's most economically distressed states were, in order: Nevada (21.4), Michigan (17.84), California (16.94), Florida (16.26) and Illinois (15.37). All saw their Stress scores decline from January to February.
Once again, North Dakota was the least stressed state in February with a score of 5.48. Next best were South Dakota (5.97), Nebraska (6.45), Vermont (7.64) and Louisiana. All those states, too, had lower Stress scores in February than in January.
The overall easing of stress was due to two main factors: A slowdown in the pace of foreclosures in battered states like California and Nevada. And a national unemployment rate that's held steady since January at 9.7 percent.
Many economists predict the 10.1 percent unemployment rate reached in October will turn out to be the peak for this downturn, the most severe the country has suffered since the 1930s. But they say the jobless rate will decline only gradually and remain around 9.3 percent by year's end.
