REGIONAL ECONOMIC CONDITIONS IN NEW ENGLAND

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1 REGIONAL ECONOMIC CONDITIONS IN NEW ENGLAND Presented to the Northeast Flooring Contractors Association Waltham, Massachusetts November 15, 2018 Osborne Jackson Senior Economist New England Public Policy Center Federal Reserve Bank of Boston Disclaimer: The views expressed here are those of the speaker and do not necessarily represent the views of the Federal Reserve Bank of Boston or the Federal Reserve System.

2 Overview of Presentation Labor Market Conditions Inflation Rate and Housing Prices Consumer Economic Sentiment 2

3 About the Federal Reserve Bank of Boston Federal Reserve System Board of Governors (Washington, DC) Regional Fed banks (12, including Boston) Conducts monetary policy, bank supervision New England Public Policy Center (NEPPC) Part of Boston Fed Research Department Produces research that informs public policy in New England Recent issues: opioid epidemic, affordable housing, criminal records reform 3

4 1.2 Non-Agricultural Employment Recession US CT ME MA NH RI VT NE Sep-04 Sep-06 Sep-08 Sep-10 Sep-12 Sep-14 Sep-16 Sep-18 Source: Bureau of Labor Statistics, NBER, Haver Analytics 4

5 Employment Growth Rates Annual Long-term Trend Last 12 months Since Peak Percent Percent Number Percent Number United States ,537, ,081,000 New England , ,700 Connecticut , ,000 Maine , ,800 Massachusetts , ,700 New Hampshire , ,500 Rhode Island , ,400 Vermont , ,900 Note: Last 12 months refers to year-over-year growth through September Annual Long-term trend refers to average year-overyear growth for the period Since Peak refers to employment change from each area s pre-recession peak employment level. Source: Bureau of Labor Statistics, Haver Analytics 5

6 Employment Growth by Industry Percent Change, September September 2018 Construction Professional & Business Services Manufacturing Other Services Education & Health Leisure & Hospitality Wholesale Trade Finance Transportation, Warehousing, and Utilities Government Retail Trade Information US NE Source: Bureau of Labor Statistics, Haver Analytics Percentage 6

7 State Employment Growth by Industry Percent Change, September September 2018 Construction Manufacturing Retail Trade Wholesale Trade CT ME MA NH RI Trans., Warehousing, & Utilities VT Information Source: Bureau of Labor Statistics, Haver Analytics

8 State Employment Growth by Industry Percent Change, September September 2018 Financial Activities Prof. Services Education and Health Leisure and Hospitality CT ME MA NH RI Other Services VT Government Source: Bureau of Labor Statistics, Haver Analytics

9 Unemployment Rates Percentage 9 8 Recession 7 NE 6 US Sep-04 Sep-06 Sep-08 Sep-10 United States New England Connecticut Maine Massachusetts New Hampshire Rhode Island Vermont Sep-12 Sep Sep-14 Sep-16 Sep-18 Sep Source: Bureau of Labor Statistics, NBER, Haver Analytics Federal Reserve Bank of Boston bostonfed.org 9

10 Unemployment Rates in New England by Metropolitan Areas VT RI NH MA ME CT Bridgeport-Stamford-Norwalk Danbury Hartford-West Hartford-East Hartford New Haven Norwich-New London-Westerly Waterbury Bangor Lewiston-Auburn Portland-South Portland Barnstable Town Boston-Cambridge-Nashua Leominster-Gardner New Bedford Pittsfield Springfield Worcester Dover-Durham Manchester Portsmouth Providence-Warwick Burlington-South Burlington Sep-17 Sep Source: Source: Bureau of Labor Statistics, Haver Analytics, Federal Reserve Bank of Boston 10

11 Labor Force Participation Rates Percent Recession US CT ME MA NH RI VT Sep-00 Sep-02 Sep-04 Sep-06 Sep-08 Sep-10 Sep-12 Sep-14 Sep-16 Sep-18 Source: Bureau of Labor Statistics, NBER, Haver Analytics 11

12 25 U-6 Rates 20 Percent Recession US CT ME MA NH RI VT 5 0 Q3-07 Q3-08 Q3-09 Q3-10 Q3-11 Q3-12 Q3-13 Q3-14 Q3-15 Q3-16 Q3-17 Q3-18 Note: U-6 includes total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers. Source: Bureau of Labor Statistics, NBER, Haver Analytics 12

13 Wage and Salary Disbursements Note: Data are seasonally adjusted. Tick marks correspond to Q1 of the given year. Source: U.S. Bureau of Economic Analysis, Federal Reserve Bank of Boston 13

14 Wage and Salary Disbursements by State Note: Data represent millions of dollars and are seasonally adjusted. Source: U.S. Bureau of Economic Analysis, Federal Reserve Bank of Boston 14

15 8 Consumer Price Index 6 Percent Change from Year Earlier Recession US Boston -2-4 Sep-04 Sep-06 Sep-08 Sep-10 Sep-12 Sep-14 Sep-16 Sep-18 Source: Bureau of Labor Statistics, NBER, Haver Analytics 15

16 Components of the Consumer Price Index Percent Change, September September 2018 All Items All Items, Less Food and Energy Fuel & Utilities Shelter Transportation Education and Communication Food Medical Care Recreation US Boston Source: Bureau of Labor Statistics, Haver Analytics 16

17 Repeat-Sales Home Price Index Percent Change from Year Earlier Recession US FHFA Purchase-Only NE FHFA Purchase-Only -15 Q2-04 Q2-06 Q2-08 Q2-10 Q2-12 Q2-14 Q2-16 Q2-18 Source: FHFA, NBER, S&P/Case-Shiller, Haver Analytics 17

18 200 Consumer Confidence Oct-17 Oct US NE US NE US NE Consumer Confidence Present Situation Future Expectations Source: The Conference Board, Haver Analytics 18

19 Concluding Observations Labor markets in New England continue to be tight, with growth in employment and low unemployment. Core inflation, which excludes food and energy prices, remains above 2 percent; housing price growth also persists. Consumer sentiment about the present economy is fairly positive, but expectations about the future are more modest. 19

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