Home Front

A blog about the economy and the Sacramento-area real estate market.

September 24, 2009
How Sacramento shrank in '08

While much of the rest of the country struggled with almost non-existent economic growth in 2008, the Sacramento region went backwards.

The regional economy shrank by 0.6 percent, when adjusted for inflation, according to figures released today by the U.S. Bureau of Economic Analysis. By contrast, the economy of all U.S. metropolitan areas grew by 0.8 percent.

The numbers provide fresh evidence of the toll of the recession - and the devastating impact of the real estate crash. The big contributors to Sacramento's economic turmoil last year were the financial services and construction sectors, according to the BEA.

When inflation is ignored, Sacramento's economy actually grew by about 1.4 percent, to $93.65 billion. The region's economy was the 32nd largest in the country.

Several other California regions also performed poorly last year, not surprisingly. The Inland Empire's economy fell 1.3 percent in inflation-adjusted dollars. Stockton was down 0.3 percent and Redding fell 2.4 percent. But some regional economies grow, including Fresno's (1 percent) and Chico's (2 percent).

In 2007, Sacramento's economy shrank by 0.3 percent when adjusted for inflation.

 

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