Locating Distress In California’s Economy

California’s economy struggled in 2017, to the point where it was quite reasonable to ask if the state was experiencing a recession.

In answering that question, we found that economic and employment data from multiple sources were consistent with recessionary conditions being present within the state, which is to say that some sectors of California’s economy were indeed experiencing elevated levels of distress during 2017, where one or more sectors would almost certainly have to be going through at least some degree of significant economic contraction.

Further, since much of the negative impact that was clearly evident in the data for the state’s employment levels was concentrated in the early months of 2017, that economic distress had to have really taken off in 2016, since changes in employment tend to lag behind changes in economic circumstances for employers.

Around the same time that we did those bits of analysis, we began playing with some new tools for assessing the health of the economy within a given region, which would potentially provide some insight into the nature of the economic distress that was clearly occurring within California using an unconventional metric: the imagery of nighttime lights within the state as documented by NASA’s Black Marble project in 2012 and 2016 through the space agency’s Worldview application.

So we focused on California’s nighttime lights and compared the changes we found between 2012 and 2016. In doing that, we discovered that the most significant changes were taking place in California’s Central Valley, where we found numerous lights dim or disappear in that region between 2012 and 2016, which would be consistent with a diminished level of human, and thus economic, activity occurring throughout much of that region between those years. The following animated image shuttles back and forth between the satellite images of California’s Central Valley from 2012 and 2016 every three seconds, where the dimming of nighttime lights in the region from 2012 to 2016 becomes clearly evident.