Policy Points

01.12.2009 Policy Points Comments Off on Local Employment Conditions: Oct.

Local Employment Conditions: Oct.

October saw few positive changes in local employment conditions across North Carolina. Last month, 64 counties posted double-digit rates of unemployment; of those, 30 had unemployment rates of at least 12 percent.

In October, every part of the state experienced weak labor markets. Unemployment rates exceeded 10 percent in 64 counties, and in 30 counties, at least 12 percent of the labor force was jobless and actively seeking work. County unemployment rates ranged from 6 percent in Currituck County to 17.2 percent in Scotland County.

Unemployment also remained at elevated levels in all 14 of the state’s metropolitan areas. Six metros posted double-digit unemployment rates. The Hickory-Morganton-Lenoir area had the highest unemployment rate (14.5 percent) followed by Rocky Mount (13.7 percent). The lowest metro unemployment rate was 7.6 percent in Durham-Chapel Hill.

Labor markets also were weak in the state’s three largest metro areas. In October, the unemployment rate stood at 12.7 percent in Charlotte, 11.1 percent in the Piedmont Triad, and 8.4 percent in the Research Triangle. Compared to one year ago, all three major regions had unemployment rates that were at least 1.5 times greater, along with smaller labor forces. Moreover, much of the job creation that has occurred in these areas over the past year has been in the public sector and the education and health care – fields intimately tied to public financing.

Click here to read South by North Strategies’ analysis of the October employment report.

01.12.2009 Policy Points Comments Off on Service Activity in the South Atlantic: Nov.

Service Activity in the South Atlantic: Nov.

From the Federal Reserve Bank of Richmond’s October survey of service-sector activity in the South Atlantic (District of Columbia, Maryland, North Carolina, South Carolina, Virginia and West Virginia):

Activity in the service sector contracted more slowly in November, according to the latest survey by the Federal Reserve Bank of Richmond. The fall in retail sales halted and shopper traffic declined only slightly. In addition, the contraction in big-ticket sales slowed, owing in part to an uptick in sales of new and used automobiles. Inventory reductions nearly matched last month’s. Revenues at services firms contracted; however, the decline was not as widespread as in October. Looking ahead six months, survey respondents were much more optimistic about business prospects than they were last month.

Turning to service sector labor markets, job cuts diminished at retail establishments, while the number of employees edged up at services firms. Average wage growth flattened. Price change in the overall service sector turned mildly negative, damped by continuing modest price deflation at services firms. Merchants anticipated an uptick in retail price growth during the next six months, while survey respondents at services firms looked for little price change.

30.11.2009 Policy Points Comments Off on Around the Dial – Nov. 30

Around the Dial – Nov. 30

Economic policy reports, blog postings, and media stories of interest:

30.11.2009 Policy Points Comments Off on Housing Price Indicies: Sept.

Housing Price Indicies: Sept.

In September, the seasonally-adjusted home prices of single-family units rose in 11 of the 20 metro areas tracked by the S&P/Case-Shiller Housing Price Indicies. Despite those increases, sales price levels in all 20 markets remain significantly lower than they were one year ago. image

The graph (right) shows changes in price indices for selected metros. Data are shown for Charlotte, certain peer metros in the South Atlantic, and, for purposes of regional comparisons, San Diego and Cleveland. The composite measure for all 20 metros also is shown.

While Charlotte never experienced the same housing bubble seen in other metros, housing prices, as measured by the index, have fallen by 8.1 percent over the past year. And Charlotte was one of nine metros tracked in the survey that recorded a month-to-month decline in prices. Although most of the price tracked by the S&P.Case-Shiller Indicies have risen over the past few months, those trends don’t necessarily mean that the housing bubble has fully deflated. Explains Calculated Risk:

It appears that house prices – in general – are still too high. However prices depend on the local supply and demand factors. In many lower priced bubble areas supply has declined sharply (because of the loan modification efforts and local moratoria), and demand was very strong in Q3 from the first-time home buyer frenzy and cash flow investors. This has pushed up prices at the low end, and suggests price might fall some again at the low end – although probably not to new lows.

However in the mid-to-high end of the bubble areas – with significant supply and little demand – prices are still too high.

30.11.2009 Policy Points Comments Off on Manufacturing in the South Atlantic: Nov.

Manufacturing in the South Atlantic: Nov.

From the Federal Reserve Bank of Richmond’s October survey of manufacturing activity in the South Atlantic (District of Columbia, Maryland, North Carolina, South Carolina, Virginia and West Virginia):

Manufacturing activity in the central Atlantic region expanded for the seventh straight month but was virtually flat on balance this month, according to the Richmond Fed’s latest survey. Looking at the main components of activity, growth in shipments and new orders tapered off, while employment returned to negative territory after being positive for the last two months. Other indicators were generally in line with a month ago. Capacity utilization continued to grow more slowly, while backlogs edged slightly lower than a month ago. Vendor delivery times were virtually unchanged, while manufacturers reported slower growth in inventories.

Looking forward, assessments of business prospects for the next six months were generally on par with last month’s readings. Firms looked for steady growth in shipments, new orders, capacity utilization and capital expenditures in the months ahead, while they expected employment to stabilize and reverse its negative reading that was seen last month.