March 2017 Dashboard for St. Croix Valley Released

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1 March 2017 Dashboard for St. Croix Valley Released The March 2017 edition of the St. Croix Valley Economic Dashboard has been released by the Center for Economic Research (CER) at UWRiver Falls, in partnership with St. Croix Economic Development Corporation (SCEDC). The Dashboard is a snapshot of economic conditions in labor, consumer, agricultural and housing markets for the seven county St. Croix Valley, which includes the counties of Polk, St. Croix, Pierce, and Dunn and the counties of Chisago, Washington, and Ramsey. It presents the latest available data in one convenient package (note: most regional data is available with a one or two month delay). The 4page Dashboard can be viewed on the CER s website, at ( select: Get the Dashboard in the article then click to download the latest edition and scroll to view all four pages). Dr. Logan Kelly, Director of CER, conducts the research for the Dashboard and offered his observations: The Local Housing Market The months of housing inventory estimates how many months it would take to sell all currently listed homes if the number of homes sold remains constant at current levels. The saletolist price ratio is the median sale price as a percent of the median listing price. The closer this ratio is to 100%, the closer listing and sale prices match. A high ratio is an indicator of a seller s market and a low ratio is an indicator of a buyer s market. Dunn County s housing market, which was in constant favor of seller s market, took a drastic turn this month going down to 24.7%. The saletolistprice ratio has gone noticeably down from 110.1% to 85.4%. Pierce and Polk counties continue to promote the buyers market. The saleto listprice ratio has remained constant with a one percent increase. St. Croix on the other hand, regained its position in the buyers market by going up by 12.6%. In comparison to last month s data, the months of housing inventory has increased for Dunn County by 1.3%, reflecting 4.9 months of inventory now. Pierce and Polk counties have increased by 0.8%, which means the waiting period for the houses listed for sale has gone up. In comparison, St. Croix has increased 1.7% compared to, reflecting 4.7 months of inventory now. The U.S. Economy Output Real Gross Domestic Product increased at an annual rate of 1.8 percent in the fourth quarter of The Real Consumption factor has increased but at a decreasing rate comparing to. The Real Investment has picked up a massive growth of 11%, whereas the Real Government spending has shown a slight increase of 1.2%. The Employment Cost Index continues to show negative growth in the month of November. Nevertheless, at the same time, initial claims, which is a measure of the number of jobless claims filed by individuals seeking to receive state jobless benefits, continues to decrease in number. Initial claims went down by 40,000 in January This indicates that the labor market is doing well and less people are claiming unemployment benefits. The Total Nonfarm Employment shows an increase of 235,000 in February Labor Market The Employment Situation Report, (Bureau of Labor Statistics) released on March 10, 2017, reported that the unemployment rate increased to 4.7 % in December, and total nonfarm payroll employment increased by 235,000. Major employment gains occurred in construction, manufacturing, private educational services, health care, and mining. As per the Household Survey Data, the number of unemployed persons changed a little in February. The unemployment rate, at 4.7%, was down by 4.9% from a year earlier. Among the major worker groups, the unemployment rate decreased for Whites to 4.1% in February. While the jobless rates for adult men (4.3%), adult women (4.3%), teenagers (15.0%), Blacks (8.1%), Asians (3.4%), and Hispanics (5.6%) showed little or no change. The Establishment Survey Data reported in February that construction employment increased by 58,000 adding 177,000 jobs over the past six months. Employment in private educational services rose by 29,000. Yearoveryear, the employment in this industry has grown by 105,000. Manufacturing added 28,000 jobs in February, and over the past three months, added 57,000 jobs. Health Care employment rose by 27,000, and the Mining sector increased by 8,000 in February. Employment in Professional and Business Services continued to trend up in February (+37,000), adding 597,000 jobs over the year. Employment in other major industries, including Wholesale Trade, Transportation and Warehousing, Information, Financial Activities, Leisure and Hospitality, and Government, showed little or no change over the month. Over the past three months, job gains have averaged 209,000 per month. page 1 of 2

2 National Inflation and Interest Rates The U.S inflation rate is expected to reach 2.70% by the end of this quarter. The inflation rate trended to around 2.50% in 2020, according to the economic models from TradingEconomics. com. The Consumer Price Index for All Urban Consumers (CPIU) increased 0.1 percent in February on a seasonally adjusted basis, as reported by the Statistics. The gasoline index declined, partially offsetting increases in several indexes, including food, shelter and recreation. The energy index fell 1.0 percent, with the decline in gasoline outweighing increases in the other energy component indexes. The food index increased 0.2 percent over the month, its largest rise since September Employment As per the Bureau of Labor Statistics (BLS), the unemployment rate in stands at 3.9% and 4.0% in. showed statistically significant employment changes from January 2016 to January 2017 of about 32,300, or1.1%. Employees on nonfarm payrolls in stand at 467,800 whereas is at 316,300. The and change in nonfarm employment from January 2016 to January 2017 stands close to 1.1%. Housing Market REALTORS Association s (WRA s) recent analysis of the state housing market existing home sales slipped in February even as prices continued to grow well above the rate of inflation. Specifically, home sales fell 2.6 percent in February 2017 relative to February 2016, and the median price rose 6.1 percent to $154,900 over that same period. In contrast, the annual inflation rate stood at 2.5 percent in January, the most recent month available. From WRA s 2017 February Home Sale Report Needless to say, February is not a month where we see a lot of home sales in, but we would have expected stronger sales given the strength of the economy and relatively low mortgage rates, said Erik Sjowall, WRA board chairperson. The statewide unemployment rate fell to 3.9 percent in January, which puts it at the lowest level since December 2000.Remarkably, housing remains quite affordable, but there is no doubt that affordability is slipping and is likely to fall even further if mortgage rates increase as expected over the next year. The Housing Affordability Index measures the fraction of the medianpriced home that a creditworthy borrower with median family income can qualify to buy, given a 20 percent down payment and the remaining balance financed with 30year fixedrate mortgage. The index stood at 233 in February, down from 251 in February of last year, which is a 7.2 percent decline in affordability. Mortgage rates dropped to 3.44 percent in July of last year but have moved up nearly three quarters of a percent to 4.17 percent in February. While inflation was relatively stable over the first half of 2016, it has definitely accelerated since that time, said WRA president and CEO Michael Theo. The Twin Cities Housing Market January brought out a rejuvenated crop of buyers with a renewed enthusiasm and a new calendar year of sales according to data released by the Minneapolis Area Association of REALTORS. Totals may still inevitably start slow in the first half of the year due to ongoing inventory concerns. Continued declines in the number of homes available for sale may push out potential buyers who simply cannot compete for home buying at higher price points in a low number of days, especially if mortgage rates continue to increase. Pending sales increased 4.3 percent from January 2016 to 3,134 homes. The month closed sales decreased 3.2% from January 2016 to 2,775 homes. About the St. Croix Valley The St. Croix Valley is comprise of Polk, St. Croix, Pierce, and Dunn counties in and Chisago, Washington, and Ramsey counties in. All seven counties are located at or near the border, along the St. Croix River, a federallyprotected water resource. Five of the seven counties (St. Croix, Pierce, Chisago, Washington, and Ramsey) are included in the MinneapolisSt. PaulBloomington MNWI MSA, a 16county region with a population of slightly more than 3.5 million residents. For additional information on the St. Croix Valley Economic Dashboard, contact Dr. Logan Kelly at cer@uwrf.edu or (715) page 2 of 2

3 St. Croix Valley (in thsnds) WI and MN (in thsnds) Saint Croix Valley Economic Dashboard for March 2017 National Indicators Indicator Release Date Note: Real GDP data is released quarterly. Inflation, Real GDP and Coincident indicator are presented as a seasonally adjusted annual rate. Simple change is reported. Leading Index of economic activity is expressed as a seasonally adjusted semi annual growth rate. Source: (1) U.S. Bureau of Labor Statistics, (2) U.S. Bureau of Economic Analysis, (3) Federal Reserve Bank of Philadelphia Arrows indicate direction of annual change. Rate One Year Ago Unemployment Feb ' % 0.20 Inflation Feb ' % 1.81 Real GDP Growth Q4 ' % 2.10 State Level Indicators Release Date Unemployment 4.0% 3.9% Employment 2,913,100 2,934,500 Labor Force 3,006,195 3,120,011 Coincident Indicator Dec ' % 1.87% Leading Indicator Dec ' % 1.04% Average Weekly Mfg Hours Unemployment Rate Region* 4.3% MSA 3.7% % Dunn 4.6% Pierce 4.9% Polk 5.7% St. Croix 4.2% % Chisago 6.2% Ramsey 4.1% Washington 4.0% Employment Level Region* 543, % 0.65% MSA 1,973, % 0.09% 2,934, % 0.01% Dunn 23, % 4.48% Pierce 23, % 1.85% Polk 23, % 1.05% St. Croix 47, % 0.68% 2,913, % 0.28% Chisago 27, % 0.80% Ramsey 266, % 0.31% Washington 131, % 0.32% 5% 4% 3% 2% 1% 0% St. Croix Valley St. Croix Valley Note: Data for and is seasonally adjusted. Other data is not seasonally adjusted and simple change is reported. Source: U.S. Bureau of Labor Statistics Note: Data for and is seasonally adjusted. Other data is not seasonally adjusted and percentage change is reported. Source: U.S. Bureau of Labor Statistics

4 St. Croix Valley (in thsnds) WI and MN (in thsnds) UWRF Center for Economic Research Labor Force Region* 567, % 0.05% MSA 1,938, % 0.66% 3,120, % 0.16% Dunn 24, % 3.65% Pierce 24, % 1.01% Polk 25, % 0.31% St. Croix 49, % 0.16% 3,006, % 0.10% Chisago 29, % 0.58% Ramsey 278, % 0.32% Washington 136, % 0.41% Employment by Sector Sector Jan 2017 Total Nonfarm 2,934,500 Mining and Logging 3,900 Construction 114,400 Manufacturing 467,800 Last Month , St. Croix Valley Note: Data for and is seasonally adjusted. Other data is not seasonally adjusted and percentage change is reported. Source: U.S. Bureau of Labor Statistics Employment by Sector Sector Jan 2017 Total Nonfarm 2,913,100 Mining and Logging 6,400 Construction 118,000 Manufacturing 316,300 Last Month 8, ,600 Trade, Transportation & Utilities 537,600 Information 47,600 Financial Activities 154,000 Professional and Business Services 321,500 1, ,800 1,200 Trade, Transportation & Utilities 531,500 Information 51,100 Financial Activities 177,400 Professional and Business Services 372,600 4, ,200 Education and Health Services 450,400 Leisure and Hospitality 273,000 Other Services 151,700 Government 412,600 1,200 1, ,600 Education and Health Services 530,500 Leisure and Hospitality 264,900 Other Services 117,400 Government 427, ,300 1,500 2,700 Note: All data is seasonally adjusted and percentage change is reported Note: All data is seasonally adjusted and percentage change is reported Source : U.S. Bureau of Labor Statistics Source : U.S. Bureau of Labor Statistics Selected Interest Rates Interest Rate Release date Level Bank Prime Rate Feb ' % Year Fixed Rate Mortgages Mar ' % 0.00 Average Rate for SBA Backed Loans Q4 ' % % Treasury Security Yield Curve 3.0% 2.0% 1.0% 0.0% (Adjusted for Constant Maturity) Source: Federal Reserve Board of Governor. Feb '17 Feb '16

5 Millions of Lbs. Millions of Lbs. UWRF Center for Economic Research Agricultural Commodity Prices Corn 1 Jul '16 $ % 6.7% $ % 6.3% Soybeans 2 $ % 20.3% $ % 16.1% Alfalfa 3 $ % 19.9% $ % 21.8% Milk 4 $ % 10.4% $ % 5.8% Milk Cow 5 Avg. Price as of First of Qtr Annual Change Q3 '16 $1, % Q3 '16 $1, % Source: USDA,National Agricultural Statistics Service Last Month One Year Ago Note: (1) Wholesale price received per bushel of corn. (2) Wholesale price received per bushel of soybeans. (3) Price received per ton. (4) Wholesale price received per hudredweight of milk. (5) Price received per head Corn Price per Bushel Soybean Price per Bushel Milk Alfalfa Price per Ton ,600 2,500 2,400 2,300 2, Quantity Price Milk Milk Cow Price per Head Quantity Price

6 UWRF Center for Economic Research Home Price Index Release Date National 1 Dec '16 5.4% 11.1% Minneapolis 1 Dec '16 5.5% 9.5% Chicago 1 Dec '16 4.8% 17.5% 2 Q4 '16 4.8% 5.9% 2 Q4 '16 4.3% 8.5% Note: Data is seasonally adjusted and percent change is reported in the table. (1) Case Shiller Home Price Index. (2) St. Louis Federal Reserve House Price Index. Source: (1) Standard & Poor's (2) Federal Reserve Bank of St. Louis Months of Housing Inventory Dunn Pierce Polk St. Croix Sale to List Price Ratio Dunn 85.4% Pierce 75.0% Polk 79.4% St. Croix 86.0% Note: Data is not seasonally adjusted and simple change is reported in the table. Source: Realtors Association and Median Home Listing Price $290,000 $280,000 $270,000 $260,000 $250,000 $240,000 $230,000 Region* $ 282, % 2.16% Dunn $ 159, % 0.00% Pierce $ 226, % 5.88% Polk $ 169, % 0.00% St. Croix $ 268, % 3.22% Chisago $ 259, % 4.91% Ramsey $ 209, % 2.41% Washington $ 376, % 1.32% Regional Home Listing Price Number of Homes Listed Region* % 15.09% Dunn % 13.57% Pierce % 16.71% Polk % 12.01% St. Croix % 6.27% Chisago % 11.78% Ramsey % 20.97% Washington % 14.91% 0 Number of Regional Home Listings Note: Data is not seasonally adjusted. Percent change is reported. Source: Note: Data is not seasonally adjusted. Percent change is reported. Source: