CONTENTS. The National Outlook 3. Regional Economic Indicators 5

Transcription

1 The Center for Economic and Business Research S OUTHEAST MISSOURI BUSINESS INDICATORS Winter 2017 Volume 18 No. 1 CONTENTS The National Outlook 3 Regional Economic Indicators 5 E X ECUTIVE SUMMARY Economic forecasts for 2017 project that the national economy will continue to improve in the coming year. Real GDP growth, which grew at an annualized rate of 1.9% in the most recent quarter, is forecasted to grow by 2.2% during The levels of activity in industrial production and home construction also are expected to improve. The labor market also is expected to remain strong during By this time next year, the national unemployment rate is expected to remain close to its current rate of 4.7%. However, one potential concern is that reduced slack in the labor market along with higher gasoline prices may contribute to a higher rate of inflation during Preliminary numbers on the regional economy indicate that our 24-county service area of southeast Missouri experienced a good fourth quarter. Compared to the fourth quarter of 2015, the aggregate level of personal income grew by a modest rate of 2.1% from $31.7 billion to $32.1 billion. Retail sales data for the fourth quarter were not available at the time this edition of Southeast Missouri Business Indicators went to press. The regional unemployment rate fell from 5.7% in the third quarter to 4.5% in the fourth quarter. Perry County, MO had the lowest unemployment rate (2.9%) in our region while New Madrid County, MO had the highest (8.5%). The level of employment for the regional economy grew by 0.3% to 395,402 jobs. 1

2 Southeast Missouri Business Indicators Center for Economic & Business Research Donald L. Harrison College of Business Dean of the Donald L. Harrison College of Business Dr. Gerald McDougall Associate Dean Dr. Gary Johnson Director, CEBR Dr. David Yaskewich For further information about the Center for Economic & Business Research and about southeast Missouri, visit the Center s website: Southeast Missouri Business Indicators is a quarterly publication of the Center for Economic & Business Research. It is devoted to disseminating and analyzing basic economic data for the region of Southeast Missouri. Permission is given to reproduce the contents of this publication, provided that proper attribution is given. The information contained in this newsletter comes from government sources and is generally believed to be accurate. Forecasts are meant to give an impression of future economic activity but are not intended to impart recommendations for investment purposes. All forecasts and commentary are the products of the Center for Economic & Business Research and do not necessarily reflect the opinion of Southeast Missouri State University. cebr@semo.edu For information regarding the Donald L. Harrison College of Business, visit the College s website: 2

3 2016 Ends with Weaker Gains in Production and Employment; Forecasts for 2017 Anticipate Continued Expansion Gross domestic product (GDP) rose at an annualized rate of 1.9% during the 4 th quarter of Primary contributors to growth included gains in personal consumption expenditures, investment spending, and state and local government spending. Currently, forecasts for the calendar year 2017 expect GDP growth to continue at an annualized rate of 2.2% each quarter. While this rate of growth would appear strong in comparison to the previous two years, it would still be considered somewhat weak for an expansion period with low unemployment. However, the probability of a recession occurring within the next year appears to be low. Of particular interest in the GDP numbers was the 2.4% growth in nonresidential fixed investment, which was weaker earlier in the year. The GDP expenditure category of nonresidential fixed investment measures the market value of all expenditures on fixed assets by businesses and nonprofit organizations. A rise in business spending on physical capital, buildings, and equipment can be interpreted as a sign that private firms are more optimistic about future growth. Earlier in the year, nonresidential fixed investment fell by 3.5% in the 1st quarter. During the 4 th quarter of 2016, the monthly rate of net employment growth was 165,000 jobs per month. The unemployment rate was 4.7%. Industries that experienced notable gains in jobs included health care, professional and business services, and food and drinking services. Annual statistics on the labor market estimated that overall employment grew by 2.2 million jobs during This pace of job growth was slower compared to the 2.7 million net gain in employment during 2015 and consistent with forecasts made earlier in the year. By this time next year, the national unemployment rate is expected to remain near 4.7%. While the level of employment grew during the 4 th quarter, so did labor income. Average hourly earnings for all private, nonfarm payroll employees was $26 per hour, which was up by 2.9% compared to a year ago. In addition, labor underutilization has fallen. The number of workers working part-time due to economic reasons, such as weak business conditions or being unable to find full-time work, fell by 437,000 people (or 7.2%) during Future wage growth and reduced slack in the labor market may add to inflationary pressures in During the last few months of 2016, the 3

4 estimated growth in labor earnings was similar to the growth in the cost of living. The Consumer Price Index (CPI) increased by 1.8% over the last year. Throughout the 4th quarter, a large portion of the rise in the price level was due to higher prices for shelter and gasoline. While energy prices have increased over the last year, food prices have shown little change. Small price increases for food consumed away from home were offset by small price declines for food consumed at home. Industrial production did not change much during the 4th quarter. The Federal Reserve s index on industrial production rose by 0.1 points since the 3rd quarter to an index value of This index indicates the level of output produced by manufacturing, mining, and utilities companies. Earlier in the year, industrial production fell before experiencing strong growth during the 3rd quarter. The year finished with small gains in manufacturing output and a decline in utilities production. Warmer than usual temperatures were believed to reduce the demand for electricity during October and November. Mining production, which has fallen substantially during the last two years, increased and showed signs of stabilizing. The housing market experienced a modest upswing in activity toward the end of Compared to the previous quarter, housing starts increased by 9.1% to a seasonally-adjusted annual rate of 1.25 million. The number of new building permits, which is considered to be an indicator of future construction activity, rose by 5% to a seasonally-adjusted annual rate of 1.23 million. For the next year, home construction activity is expected to continue at a similar pace. Factory production and home construction are expected to be aided by a low interest rate environment for the foreseeable future. Due to slack in the labor market and low inflation, the Federal Reserve has maintained a low level for the federal funds rate in recent years. At its December meeting, the Federal Reserve s Federal Open Market Committee (FOMC) raised the target range for the federal funds rate from 0.25% % to a range of 0.50% %. Higher prices and reduced slack in the labor market may be reasons for the FOMC to increase interest rates further in The next FOMC meeting will be held on March 14th and 15th. Other interest rates also are expected to rise as the FOMC gradually tightens the money supply. Currently, the three-month Treasury bill rate is at 0.43%. Forecasts predict that it will reach as high as 1.13% by the end of While higher, the rate of return will still be considered low compared to its anticipated level in the long run. 4

5 Regional Economic Data: Southeast Missouri Summary Bollinger Employment 5,369 5,499 5,465 5,473 5,373 5,405 % Change from last quarter 0.7% +2.4% 0.6% +0.1% 1.8% +0.6% Unemployment Rate 5.3% 4.4% 5.5% 5.1% 5.9% 4.7% Personal Income $365,784 $370,319 $373,465 $373,464 $372,553 $373,781 % Change over 12 months +2.3% +1.4% +4.3% +3.0% +1.9% +0.9% Retail Sales $13,589 $14,193 $12,858 $13,497 $12,975 n.a. Total over 12 months $51,933 $53,110 $53,112 $54,137 $53,523 n.a. Butler Employment 17,796 18,344 18,154 18,280 17,985 18,087 % Change from last quarter 2.8% +3.1% 1.0% +0.7% 1.6% +0.6% Unemployment Rate 6.2% 5.1% 5.8% 5.3% 7.2% 4.8% Personal Income $1,477,512 $1,504,864 $1,516,711 $1,505,840 $1,511,100 $1,517,123 % Change over 12 months +2.4% +2.8% +3.6% +1.6% +2.3% +0.8% Retail Sales $151,925 $159,767 $149,308 $154,556 $150,623 n.a. Total over 12 months $606,629 $609,086 $613,510 $615,556 $614,254 n.a. Cape Girardeau Employment 38,933 39,756 39,884 39,630 38,678 39,140 % Change from last quarter 1.6% +2.1% +0.3% 0.6% 2.4% +1.2% Unemployment Rate 4.3% 3.5% 4.0% 4.2% 5.0% 3.9% Personal Income $3,065,120 $3,101,238 $3,143,181 $3,122,572 $3,099,221 $3,118,900 % Change over 12 months +1.7% +1.5% +3.9% +2.3% +1.1% +0.6% Retail Sales $355,139 $393,653 $341,832 $351,987 $352,806 n.a. Total over 12 months $1,385,855 $1,413,908 $1,430,043 $1,442,611 $1,440,278 n.a. Carter Employment 2,400 2,310 2,276 2,429 2,451 2,381 % Change from last quarter +0.8% 3.8% 1.5% +6.7% +0.9% 2.9% Unemployment Rate 7.0% 5.8% 8.6% 6.7% 7.6% 5.9% Personal Income $180,158 $180,553 $184,553 $184,973 $184,819 $185,209 % Change over 12 months +2.7% +2.1% +3.8% +3.3% +2.6% +2.6% Retail Sales $11,903 $9,589 $9,361 $10,790 $11,647 n.a. Total over 12 months $41,994 $41,755 $42,064 $41,643 $41,387 n.a. Crawford Employment 10,468 10,436 10,384 10,705 10,610 10,438 % Change from last quarter 0.4% 0.3% 0.5% +3.1% 0.9% 1.6% Unemployment Rate 5.5% 4.8% 6.1% 5.1% 5.6% 4.7% Personal Income $879,606 $894,905 $897,393 $894,736 $894,631 $916,211 % Change over 12 months +4.2% +3.6% +3.7% +2.6% +1.7% +2.4% Retail Sales $51,002 $46,690 $42,518 $48,652 $52,499 n.a. Total over 12 months $181,164 $183,055 $185,189 $188,862 $190,359 n.a. 5

6 Regional Economic Data: Southeast Missouri Summary Dent Employment 6,011 6,023 5,848 5,966 5,937 5,985 % Change from last quarter 1.4% +0.2% 2.9% +2.0% 0.5% +0.8% Unemployment Rate 5.8% 5.1% 5.6% 5.3% 6.2% 4.9% Personal Income $497,232 $501,664 $506,448 $506,548 $507,208 $509,990 % Change over 12 months +3.1% +3.1% +4.0% +2.7% +2.0% +1.7% Retail Sales $36,094 $35,950 $34,278 $37,070 $35,788 n.a. Total over 12 months $142,097 $141,992 $142,433 $143,392 $143,086 n.a. Dunklin Employment 12,015 12,542 12,395 12,493 11,976 12,078 % Change from last quarter 2.9% +4.4% 1.2% +0.8% 4.1% +0.9% Unemployment Rate 7.7% 6.6% 8.0% 7.8% 8.7% 7.1% Personal Income $1,111,689 $1,125,806 $1,139,259 $1,137,805 $1,133,113 $1,134,314 % Change over 12 months +3.2% +3.1% +4.0% +3.0% +1.9% +0.8% Retail Sales $70,207 $73,721 $68,294 $69,926 $67,156 n.a. Total over 12 months $283,746 $283,091 $282,600 $282,148 $279,097 n.a. Franklin Employment 50,717 50,963 50,739 51,525 51,515 51,569 % Change from last quarter +0.1% +0.5% 0.4% +1.5% 0.0% +0.1% Unemployment Rate 4.7% 3.8% 5.0% 4.2% 4.7% 3.5% Personal Income $4,149,396 $4,181,386 $4,199,427 $4,241,284 $4,264,114 $4,295,067 % Change over 12 months +3.6% +3.8% +4.4% +3.4% +2.8% +2.7% Retail Sales $279,735 $288,970 $260,162 $284,173 $283,924 n.a. Total over 12 months $1,088,819 $1,100,275 $1,114,128 $1,113,040 $1,117,229 n.a. Gasconade Employment 7,426 7,581 7,472 7,662 7,485 7,579 % Change from last quarter 1.1% +2.1% 1.4% +2.5% 2.3% +1.3% Unemployment Rate 4.0% 3.2% 4.5% 3.7% 4.5% 4.5% Personal Income $570,067 $574,609 $581,353 $583,505 $582,336 $584,131 % Change over 12 months +3.4% +2.9% +4.4% +3.4% +2.2% +1.7% Retail Sales $43,874 $44,131 $38,027 $43,082 $43,642 n.a. Total over 12 months $168,431 $167,541 $167,620 $169,114 $168,882 n.a. Iron Employment 3,531 3,577 3,628 3,696 3,527 3,481 % Change from last quarter 2.9% +1.3% +1.4% +1.8% 4.6% 1.3% Unemployment Rate 7.6% 6.0% 7.5% 6.7% 7.7% 6.1% Personal Income $331,155 $333,835 $332,320 $331,917 $332,928 $381,737 % Change over 12 months +2.7% +2.7% +2.8% +1.4% +0.5% +2.4% Retail Sales $21,086 $19,584 $19,484 $19,955 $23,092 n.a. Total over 12 months $79,014 $78,819 $79,553 $80,109 $82,115 n.a. 6

7 Jefferson Regional Economic Data: Southeast Missouri Summary Employment 113, , , , , ,389 % Change from last quarter +0.2% +0.3% 0.3% +1.4% +0.1% +0.2% Unemployment Rate 4.5% 3.8% 4.9% 4.0% 4.6% 3.6% Personal Income $8,684,142 $8,720,720 $8,744,732 $8,849,772 $8,921,054 $9,006,740 % Change over 12 months +4.2% +4.5% +4.2% +3.2% +2.7% +3.3% Retail Sales $525,639 $525,228 $493,543 $517,520 $525,509 n.a. Madison Total over 12 months $2,021,898 $2,042,863 $2,053,217 $2,061,930 $2,061,800 n.a. Employment 5,220 5,322 5,298 5,339 5,207 5,203 % Change from last quarter 1.8% +2.0% 0.5% +0.7% 2.5% 0.1% Unemployment Rate 5.9% 4.6% 5.7% 5.3% 6.2% 4.8% Personal Income $389,353 $393,353 $393,885 $394,147 $393,794 $400,989 % Change over 12 months +3.3% +3.3% +3.2% +1.9% +1.1% +2.0% Retail Sales $24,547 $24,438 $24,248 $24,510 $24,762 n.a. Total over 12 months $96,978 $97,041 $97,769 $97,743 $97,958 n.a. Mississippi Employment 5,933 6,108 6,023 6,201 6,027 5,922 % Change from last quarter 1.8% +2.9% 1.4% +2.9% 2.8% 1.7% Unemployment Rate 5.9% 4.7% 6.3% 6.3% 7.3% 5.9% Personal Income $463,639 $470,344 $473,583 $480,512 $475,963 $466,984 % Change over 12 months +3.5% +4.2% +3.7% +4.0% +2.7% 0.7% Retail Sales $22,891 $19,827 $19,366 $22,409 $22,875 n.a. Total over 12 months $86,795 $85,658 $84,507 $84,493 $84,477 n.a. New Madrid Employment 8,028 8,355 8,364 8,508 7,952 7,622 % Change from last quarter 2.2% +4.1% +0.1% +1.7% 6.5% 4.1% Unemployment Rate 6.2% 5.2% 7.0% 8.1% 9.6% 8.5% Personal Income $632,230 $636,425 $630,898 $637,173 $645,093 $633,784 % Change over 12 months +2.3% +2.2% +2.2% +0.9% +0.3% 0.4% Retail Sales $75,272 $76,557 $71,707 $73,979 $70,491 n.a. Total over 12 months $301,027 $300,935 $299,240 $297,515 $292,734 n.a. Pemiscot Employment 6,396 6,570 6,598 6,634 6,403 6,521 % Change from last quarter 2.4% +2.7% +0.4% +0.5% 3.5% +1.8% Unemployment Rate 9.3% 7.9% 9.2% 9.0% 9.7% 7.9% Personal Income $604,878 $607,391 $618,370 $618,650 $615,275 $614,625 % Change over 12 months +2.4% +2.1% +3.6% +3.0% +1.7% +1.2% Retail Sales $34,045 $32,093 $32,497 $31,694 $33,323 n.a. Total over 12 months $133,683 $132,882 $131,362 $130,329 $129,607 n.a. 7

8 Perry Regional Economic Data: Southeast Missouri Summary Employment 9,813 10,158 9,956 9,886 9,846 9,968 % Change from last quarter 2.1% +3.5% 2.0% 0.6% 0.4% +1.2% Unemployment Rate 4.1% 3.2% 4.0% 3.4% 3.9% 2.9% Personal Income $669,297 $678,680 $686,790 $686,525 $683,636 $688,031 % Change over 12 months +2.8% +3.0% +4.1% +2.6% +2.1% +1.4% Retail Sales $64,089 $69,355 $62,256 $64,137 $63,708 n.a. Total over 12 months $257,349 $257,911 $260,320 $259,837 $259,456 n.a. Reynolds Employment 2,567 2,555 2,503 2,678 2,567 2,493 % Change from last quarter 3.9% 0.5% 2.0% +7.0% 4.1% 2.9% Unemployment Rate 6.5% 5.6% 7.0% 6.1% 7.3% 5.5% Personal Income $204,126 $205,865 $208,190 $208,107 $208,644 $209,178 % Change over 12 months +3.3% +3.1% +4.3% +3.0% +2.2% +1.6% Retail Sales $16,940 $12,831 $12,411 $13,957 $15,684 n.a. Ripley Total over 12 months $54,599 $54,253 $56,100 $56,139 $54,883 n.a. Employment 4,873 5,106 5,015 5,050 4,906 5,065 % Change from last quarter 3.8% +4.8% 1.8% +0.7% 2.9% +3.2% Unemployment Rate 7.9% 6.6% 7.3% 6.9% 8.5% 6.4% Personal Income $410,573 $415,904 $421,139 $421,545 $421,828 $424,706 % Change over 12 months +2.9% +2.8% +4.7% +3.3% +2.7% +0.3% Retail Sales $19,814 $19,380 $19,455 $19,345 $19,220 n.a. Scott Total over 12 months $80,012 $78,518 $78,103 $77,668 $77,074 n.a. Employment 19,018 19,375 19,454 19,731 19,083 19,044 % Change from last quarter 1.5% +1.9% +0.4% +1.4% 3.3% 0.2% Unemployment Rate 5.3% 4.5% 5.5% 5.5% 6.5% 5.2% Personal Income $1,567,526 $1,581,193 $1,603,733 $1,602,437 $1,603,443 $1,609,748 % Change over 12 months +3.1% +3.0% +4.4% +3.1% +2.3% +1.8% Retail Sales $94,440 $90,773 $85,953 $87,329 $89,521 n.a. Total over 12 months $352,586 $356,622 $358,758 $358,495 $353,576 n.a. Ste. Genevieve Employment 8,667 8,762 8,657 8,807 8,741 8,766 % Change from last quarter 0.9% +1.1% 1.2% +1.7% 0.7% +0.3% Unemployment Rate 5.1% 3.9% 4.9% 4.4% 5.2% 4.2% Personal Income $642,062 $652,984 $658,802 $660,664 $655,829 $663,845 % Change over 12 months +2.8% +2.8% +3.4% +2.6% +2.1% +1.7% Retail Sales $47,203 $43,221 $39,095 $42,770 $43,858 n.a. Total over 12 months $174,729 $173,572 $172,794 $172,289 $168,944 n.a. 8

9 Regional Economic Data: Southeast Missouri Summary St. Francois Employment 24,939 25,301 25,167 25,523 24,953 25,126 % Change from last quarter 2.2% +1.5% 0.5% +1.4% 2.2% +0.7% Unemployment Rate 5.9% 4.9% 5.9% 5.3% 6.2% 4.8% Personal Income $2,076,979 $2,098,800 $2,127,902 $2,129,972 $2,130,983 $2,142,860 % Change over 12 months +3.5% +3.6% +4.7% +3.4% +2.6% +2.1% Retail Sales $184,521 $187,698 $176,704 $186,352 $186,191 n.a. Total over 12 months $713,539 $726,779 $735,976 $735,275 $736,945 n.a. Stoddard Employment 12,504 12,693 12,525 12,803 12,690 12,736 % Change from last quarter 0.3% +1.5% 1.3% +2.2% 0.9% +0.4% Unemployment Rate 6.1% 5.5% 6.9% 6.0% 6.9% 5.7% Personal Income $1,081,230 $1,090,476 $1,105,478 $1,105,498 $1,106,029 $1,109,698 % Change over 12 months +3.1% +3.1% +4.4% +3.1% +2.3% +1.8% Retail Sales $66,691 $67,315 $63,351 $67,059 $63,630 n.a. Total over 12 months $267,945 $265,103 $263,782 $264,416 $261,355 n.a. Washington Employment 9,911 10,130 10,126 10,211 9,828 9,952 % Change from last quarter 1.9% +2.2% 0.0% +0.8% 3.8% +1.3% Unemployment Rate 6.0% 5.3% 7.0% 5.7% 6.7% 5.5% Personal Income $723,624 $735,567 $744,067 $743,153 $729,542 $737,397 % Change over 12 months +4.5% +4.2% +5.1% +2.8% +0.8% +0.2% Retail Sales $38,004 $36,967 $35,985 $37,356 $37,176 n.a. Total over 12 months $146,106 $147,435 $147,802 $148,312 $147,484 n.a. Wayne Employment 5,473 5,515 5,513 5,552 5,453 5,453 % Change from last quarter 1.0% +0.8% 0.0% +0.7% 1.8% +0.0% Unemployment Rate 5.5% 4.7% 5.4% 4.9% 6.0% 4.7% Personal Income $386,980 $391,260 $394,985 $394,500 $394,742 $397,173 % Change over 12 months +3.7% +3.6% +4.4% +2.9% +2.0% +1.5% Retail Sales $20,556 $19,652 $18,912 $23,109 $22,249 n.a. Total over 12 months $78,668 $78,853 $79,400 $82,229 $83,922 n.a. Southeast Missouri Employment 391, , , , , ,402 % Change from last quarter 1.0% +1.3% 0.5% +1.3% 1.4% +0.3% Unemployment Rate 5.2% 4.4% 5.5% 4.9% 5.7% 4.5% Personal Income $31,164,358 $31,448,141 $31,690,382 $31,844,113 $31,856,753 $32,122,221 % Change over 12 months +3.5% +3.4% +4.2% +2.9% +2.2% +2.1% Retail Sales $2,269,204 $2,311,579 $2,089,484 $2,231,257 $2,236,665 n.a. Total over 12 months $8,795,594 $8,871,057 $8,929,382 $8,957,282 $8,940,425 n.a. 9