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10/16/2014

Southeastern Manufacturing Continues to Expand

The return of fall has not cooled down manufacturing in the Southeast. The Southeast Purchasing Managers Index (PMI), which was released October 5, indicated expansion in the manufacturing sector for the ninth consecutive month.

The Atlanta Fed's research department uses the Southeast PMI to track manufacturing activity in the Southeast. The Econometric Center at Kennesaw State University produces the survey. It provides an analysis of current market conditions for the manufacturing sector in Alabama, Georgia, Florida, Louisiana, Mississippi, and Tennessee. The PMI is based on a survey of representatives from manufacturing companies in those states and analyzes trends concerning new orders, production, employment, supplier delivery times, and inventory levels. A reading above 50 points indicates that manufacturing activity is expanding, and a reading below 50 points indicates that activity is contracting.

The Southeast PMI fell slightly to 55.0 points in September. The index was only 1.7 points lower than August and still solidly above the 50 threshold for expansion (see the chart). The new orders subindex registered a nice increase, and the employment subindex rose, but all other subindexes fell during the month.

  • New orders: The new orders subindex increased 4.5 points over August's levels and has now climbed 15.7 points during the last two months.
  • Production: The production subindex decreased. September's 59.0 reading was 1.2 points below August but was still well into expansionary territory.
  • Employment: The employment subindex inched up 0.5 points compared with the previous month. The employment subindex has now indicated expansion for 12 consecutive months.
  • Supply deliveries: The supplier deliveries subindex declined 3.6 points during September, indicating that manufacturers are receiving their inputs slightly more quickly.
  • Finished inventory: The finished inventories subindex decreased 8.6 points compared with August. The fall completely reversed the previous month's gain of 8.4 points. The subindex is now below 50, implying that purchasing managers are not as concerned about a buildup of inventory levels.
  • Commodity prices: The subindex measuring input price pressures moved down to 53.0, a 5.3 point drop from the previous month.

Se-purchasing-manager-index

Optimism among purchasing managers continued to rise during September. When asked for their production expectation over the next three to six months, 50 percent stated that they expect production to be higher, an increase from 44 percent in August. Only 18 percent of survey respondents expect their production to be lower.

The rise in new orders and strong production numbers bode well for manufacturing heading into the fourth quarter. The Southeast PMI has averaged a 56.6 reading so far this year. Conversely, the national PMI (produced by the Institute for Supply Management) has averaged 55.2. (I should note that the Southeast PMI is not a subset of the national index.) We'll be on the lookout for any changes in activity. After all, it's fall—the season of change.

By Troy Balthrop, a Regional Economic Information Network analyst in the Atlanta Fed’s Nashville Branch

October 16, 2014 in Economic conditions, Economic Growth and Development, Manufacturing, Southeast | Permalink | Comments (0) | TrackBack (0)

10/14/2014

In the Volunteer State, Economic Growth Anticipated

The Center for Business and Economic Research (CBER) at the University of Tennessee recently published its fall 2014 economic outlook for Tennessee. The report painted a moderately positive economic picture for the Volunteer State, lining up well with what we have been hearing from our business contacts, highlighted in a recent SouthPoint post.

CBER conducts research on national and state economic trends. Report findings are used not only by the University of Tennessee, but also by state government and other public and private entities. The center—headed by director William F. Fox and associate director Matthew Murray—has provided an economic report to the governor every year since 1975, and these reports serve as the official forecast for the state.

The fall report highlighted a rebound in state employment and noted slow but steady gains during the first half of 2014. Nonfarm employment grew by 1.4 percent in the first quarter and 2.6 percent in the second. To compare, the national employment growth rate was 2.2 percent in the second quarter. Although Tennessee's unemployment rate has come down during 2014, the progress has been somewhat uneven. During the first quarter, the unemployment fell to 6.9 percent, and then it fell further to 6.4 percent in the following quarter. Recently, however, the rate increased to 7.4 percent in August. The unemployment rate is expected to inch downward during the fourth quarter and average 7.0 percent for 2014 and 2015. That said, the state's unemployment rate has remained even with or above the national rate since March 2012.

Looking down the road
Employment gains this year and next should be broad-based across most sectors of the Tennessee economy, with the exception of the information and government sector, which is projected to shed jobs this year. The professional and business services sector is expected to lead employment gains, but it could experience slowing growth in 2015. The transportation and utilities, education, and health care services sectors are expected to see stronger growth in 2015 compared with this year, and manufacturing employment growth is expected to slow to 0.9 percent in 2014 and 0.5 percent in 2015. Manufacturing employment in the state remains below prerecession levels although manufacturing output has surpassed prerecession levels, indicating productivity gains in the sector.

Nominal personal income is on pace to grow by 3.5 percent in 2014, well ahead of the 2.1 percent mark seen in 2013. Income growth is expected to accelerate to 4.4 percent in 2015. Tennessee's personal income grew faster than that of the nation in 2013, but it is expected to be slightly lower than the national rate in 2014 and 2015.

New investments on the horizon
Tennessee has recently received several welcome developments on the investment front. Volkswagen announced plans to add a midsize SUV to its manufacturing plant in Chattanooga, resulting in a $600 million expansion and an additional 2,000 jobs. The Maryland-based apparel company Under Armour plans to build a distribution facility in Mount Juliet. The facility will create 1,500 new jobs and represents a $100 million investment.

Overall, it appears Tennessee will hold its own, economically speaking, and the national economy will continue to rebound. If that modestly optimistic outlook doesn't sound like much to get excited about, it nevertheless represents an improvement over recent years.

By Troy Balthrop, a senior Regional Economic Information Network analyst in the Atlanta Fed's Nashville Branch

October 14, 2014 | Permalink | Comments (0) | TrackBack (0)

10/10/2014

Construction Employment: On the Rise in Louisiana

In September, the U.S. Bureau of Labor Statistics reported that construction employment increased nationally by 16,000 jobs. And during the past year, the industry added 230,000 jobs on net. Louisiana itself has been no stranger to construction job growth.

Louisiana Economic Development reported that there are more than $50 billion in industrial plant expansion and construction projects in the works over the next few years, spurring growth in both commercial and residential construction and thus growth in construction employment. In fact, the Associated General Contractors of America (AGC) recently reported that Lake Charles, a city tucked in the southwestern corner of Louisiana, had the largest year-over-year percent increase in construction jobs in the country in August: 27 percent, or 2,900 net jobs. Baton Rouge, the state capital, was the fourth-largest contributor to construction jobs in the nation during the same period: 18 percent, or 8,000 jobs.

Despite the upbeat construction job growth picture in Louisiana, the AGC acknowledged that the overall industry has been inconsistent through the recovery. Their report indicated that nationally firms are having a hard time finding enough qualified workers, with one in four firms having to turn down projects because of worker shortages.

For quite some time now, business contacts in our Regional Economic Information Network  have echoed the same sentiment (see past editions of Southeastern Insights), describing difficulties finding qualified workers in various industries. Contacts from the construction industry in particular have conveyed these challenges for a little over a year, often stating that projects were being delayed because of the difficulty finding the quantity and quality of skilled contractor labor. Continuing this theme, the Atlanta Fed’s latest commercial construction poll results revealed an increase in the share of industry contacts who reported a more difficult time filling positions relative to a year earlier (see the chart).

Difficultyoffiling

However, three-fourths of these contacts indicated that they plan to increase hiring during the next quarter (see the chart).

Hiringplans

So how will the construction industry and labor market in Louisiana fare, considering permits were issued for a myriad of construction projects in the pipeline in Louisiana and that more than 13,000 construction jobs are expected to be needed in the near to medium term? Hopefully concerns about the tight labor market and potential labor shortage will be diminished by various efforts happening in the state to provide training in trade skilled crafts to help address the fast-growing workforce needs of the construction industry. Examples of such training programs are currently administered by the Associated Builders and Contractors and Louisiana’s Community & Technical Colleges. Given the significant job growth and positive outlook in the construction industry in Louisiana, construction might be an industry that could merit additional training programs and workforce development efforts.

By Gail Psilos, REIN director, and Rebekah Durham, economic policy analysis specialist, both in the New Orleans Branch of the Atlanta Fed

October 10, 2014 | Permalink | Comments (0) | TrackBack (0)

10/08/2014

Regional Jobs, Unemployment Rate Show Increases

In the latest edition of Southeastern Insights, my colleagues in the Atlanta Fed's Regional Economic Information Network (REIN) conveyed that most regional business contacts' staffing levels increased over the past couple of months. The recent release of state-level labor market data from the payroll survey produced by the U.S. Bureau of Labor Statistics supports these anecdotal reports.

Payroll survey
Nearly all Sixth District states added new payrolls in August. In total, the region added 51,100 net jobs, following 38,200 new payrolls in July (revised up from 27,100). Florida was among the top job contributors in the nation, adding 22,700 new payrolls in August. The only job losses in the Sixth District occurred in Mississippi, which subtracted 4,600 (see the chart).

Contributions to Change in Net Payrolls by Sixth District State

The bulk of new jobs in the Sixth District came from goods-producing industries such as construction and manufacturing, with 25,200 jobs added on net. Florida alone contributed 10,600 of these jobs, with 6,100 added to the construction sector. Georgia added 7,900 goods-producing jobs, with 5,500 added to the manufacturing sector.

Gains in the professional and business services industry were also fairly widespread, with Sixth District states adding 15,500 payrolls to the sector in August. Only two sectors subtracted payrolls: leisure and hospitality (down 1,300 payrolls) and financial activities (down 200). Though neither sector subtracted payrolls in all states, most of the leisure and hospitality job losses occurred in Florida, which shed 5,800 payrolls, and most financial activities job losses were in Georgia, which lost 1,800 payrolls on net.

However, similar to my post last month about July's regional labor market data, jobs increased on aggregate in Sixth District states in August. However, the unemployment rate increased.

Household survey
The aggregate unemployment rate for the Sixth District ticked up to 6.9 percent in August from 6.7 percent in July (see the chart). In three of the six District states—Georgia, Louisiana, and Tennessee—the unemployment rate continued its upward trend (now for four straight months). Georgia had the highest unemployment rate among the states in August, at 8.1 percent, a notable 0.4 percentage point increase from 7.7 percent in July. Mississippi's unemployment rate, though still one of the highest in the nation, declined for the first time in four months in August to 7.9 percent, from 8.0 percent in July.

Contributions to Change in Net Payrolls by Sixth District State

So why did the report reflect an increase in jobs and a rise in the unemployment rate? Though there is some ambiguity about a rising unemployment rate accompanying decent employment growth, one possible explanation is that the number of people looking for work increased more than the number hired. The labor force participation rate (LFPR) is an indicator that supports this notion. In fact, the data show that the LFPR increased in most Sixth District states during the last couple of months. Perhaps recent improving trends in labor market conditions made people more confident in their ability to find employment, thus encouraging them to look for jobs.

The next release of state-level labor market data will be October 21. We'll have to wait and see if this trend continues.


October 8, 2014 in Economic conditions, Employment, Southeast, Unemployment | Permalink | Comments (0) | TrackBack (0)

10/06/2014

Southeast Housing Shows Slow but Steady Growth

The Atlanta Fed polls its residential broker and home builder business contacts once a month to keep a close pulse on current trends in residential real estate and construction. The latest poll results, which reflect activity in August 2014, suggest that growth continues at a slow and steady pace.

The majority of homebuilder respondents indicated that home sales were flat to slightly up from the year-earlier level (see the chart). The report from residential brokers was somewhat mixed.

August 2014 SE Home Sales v Year Earlier

A look at recent regional home sales statistics from the metropolitan statistical area perspective appears to confirm this portrait (see the table).

Existing Year-over-Year Home Sales Growth, August 2014

The majority of builders indicated that buyer traffic was up from the year-earlier level, and the report from brokers was again mixed. Many brokers and builders reported that home inventory levels remained flat or were down from the year-earlier level. Most contacts continued to note that home prices were up slightly in August compared with year-ago levels.

The majority of builders reported that construction activity had increased from the year-earlier level (see the chart).

Existing Year-over-Year Home Sales Growth, August 2014

The incoming data appear to confirm this report of increasing construction activity. In the chart below, I’ve calculated the year-over-year percent change in U.S. single-family housing starts and separated out the contribution that each Sixth District state made to the total change. The stacked bar farthest to the right represents the August 2014 data point and reveals that the states making up the Sixth District all contributed positively to the 4.2 percent year-over-year increase in single-family starts at the national level.

Note: The latest poll results, which reflect activity in August 2014, are based on responses from 38 residential brokers and 19 homebuilders and were collected September 2–10.

By Jessica Dill, senior economic research analyst in the Atlanta Fed's research department

October 6, 2014 in Real Estate, Southeast | Permalink | Comments (0) | TrackBack (0)

09/30/2014

What We Heard in Alabama

During the most recent Federal Open Market Committee cycle (which ran from July 31 to September 17), the Atlanta Fed's Regional Economic Information Network (REIN) team at the Birmingham Branch met with business leaders, including branch directors, to discuss economic conditions in Alabama.

General business conditions
Overall, REIN contacts in Alabama see continued slow growth during the next three to six months. We heard accounts of improvement in industrial manufacturing, and commercial construction contacts reported growing demand for office, industrial, and retail space. Contacts in the finance and professional service industries also reported growing demand. Although comments regarding headwinds had grown scarcer during the past few cycles, we heard more mentions of concerns over the effects of “unknowns” from the upcoming elections and international turmoil stemming from recent events in Ukraine and the Middle East.

Employment and labor markets
We heard mixed stories about future hiring plans, ranging from no plans to hire in the near term to substantial hiring plans on the horizon. The chart below illustrates both the short-term and long-term employment momentum by sector. Compared with a year ago, Alabama has seen employment expand in several sectors like manufacturing, construction, health care, private education, and business services. However, sectors such as retail, other services (including automotive repair, personal care services, and business and professional associations, among others), and state government saw momentum contract.

Employment_momentum

In August, Alabama payrolls increased month over month by a seasonally adjusted 8,400 jobs, on net. All sectors gained except retail, which posted a loss of 1,900 jobs, and federal government, which remained unchanged since July. Alabama has seen overall job growth in the last two months, and August's unemployment rate was 6.9 percent (see the chart).

Alabama

That rate is down 0.1 percentage point since July, but it's still higher than the national unemployment rate of 6.1 percent (see the chart).

Unemployment_rates

Costs, prices, and wages
In most cases, our contacts reported only modestly increasing input prices, with the exception of construction materials, which have reportedly risen. No contacts reported the ability to significantly raise prices broadly, but more are reporting passing along selective increases where they can. However, growing price pressure was noted in the transportation sector and with the exception of ocean shipping (which has excess capacity), other transportation segments have reached capacity, with prices consequently rising.

When the conversations shifted to wages, many of our contacts reported that although they are not planning to increase wages, they are carefully watching what other companies are doing. No overarching wage pressure was apparent, although there was mention of wage pressure being reported for select, high-skilled positions. Mostly, contacts reported continued modest pay increases.

Availability of credit and investment
Participants told mixed stories regarding investment plans. We heard reports of idled plants being brought back online and some talk of companies beginning to consider investments that would increase production capacity. However, we also heard some discussion about companies that had been investing through the downturn considering moderating investments. Additionally, several contacts noted continued challenges in obtaining financing for smaller builder/developer projects.

Our conversations will continue in Alabama, and we'll relay them to you in the future. In the meantime, what are you hearing?

Photo of Teri Gafford By Teri Gafford, a REIN director,


and Susan Remy, a REIN analyst, both at the Atlanta Fed's Birmingham Branch

September 30, 2014 in Alabama, Economic conditions, Manufacturing | Permalink | Comments (0) | TrackBack (0)

09/23/2014

Southeastern Exports Taking Large Strides

Two years ago, I wrote an overview of merchandise (goods and commodities) exports by the Sixth District's major cities. The overview was based on the 2011 metropolitan statistical area (MSAs) export data produced by the U.S. Department of Commerce. Back then, five MSAs in the District made it to the list of top-50 U.S. metropolitan export markets: Miami-Fort Lauderdale-Pompano Beach, New Orleans-Metairie-Kenner, Atlanta-Sandy Springs-Marietta, Tampa-St. Petersburg-Clearwater, and Nashville-Davison-Murfreesboro-Franklin. Earlier this month, the Commerce Department released the U.S. metropolitan exports report updated with 2013 data. According to the report, three more MSAs from the Sixth District now rank among the top 50: Louisiana's Baton Rouge and Lake Charles, and East Tennessee's Kingsport-Bristol. In 2013, the eight MSAs exported more than $124 billion worth of goods and commodities, accounting for nearly 9 percent of total merchandise exports by U.S. MSAs, up from 7 percent just two years earlier.

The Commerce Department has also published merchandise export fact sheets for each of the top 50 exporting MSAs. These fact sheets provide details on the metropolitan areas' exports, including product types, major export destinations, small-medium business share of total exports, and so on. It's a great way to learn more about each city's connectedness to the global economy. The information is drawn from the U.S. Census Bureau's Origin of Movement–Zip Code Based Series, which allocates exports to states and localities based on the address of the legal entity (such as a manufacturer) that receives the benefit from the export transaction.

Here are a few observations on the rising prominence of exports in the Sixth District. First, the data show the rapid evolution of MSAs in southern Louisiana and Mississippi into key export markets. Since 2009, Lake Charles, for example, saw its exports increase by more than 300 percent, and New Orleans by nearly 200 percent. But those impressive growth rates are just baby steps compared to Gulfport-Biloxi-Pascagoula's leap of almost 600 percent—the fastest growth among metro areas that exported more than $1 billion in 2013. The common driver of that growth is rising production and exports of refined petroleum and coal products in the United States. Nationwide, export volume of petroleum products jumped almost 70 percent between 2009 and 2013. Since prices of those products also went up during that time, the value of exported petroleum products soared 180 percent.

Another development worth highlighting is last year's rapid increase in exports of transportation equipment and machinery from the nation's top exporting MSAs. The 36 percent ($2.3 billion) jump in the Nashville metro area's merchandise exports last year illustrates the trend. The strong growth has put the city among top 10 metropolitan areas that saw the biggest dollar increase in merchandise exports in 2013. And another fact: exports from Kingsport and Savannah grew by higher dollar amounts ($1.5 billion and $1.3 billion, respectively) than exports from the export heavyweight Los Angeles.

The Kingsport-Savannah-Los Angeles comparison, however, might give a wrong impression about the magnitude of change of those cities' role in international trade. The problem is that the MSA export data only capture exports of goods and commodities, omitting the big share (about 30 percent) of U.S. exports accounted for by the services industry (which includes, for example, tourism, patents, and entertainment). I wonder what types of changes are taking place in the services industry exports and how they may be affecting Sixth District cities' ties to the global economy. If you have any insights, please share!


Photo of Galina AlexeenkoBy Galina Alexeenko, a Regional Economic Information Network director in the Atlanta Fed's Nashville Branch

September 23, 2014 in Exports, Southeast | Permalink | Comments (0) | TrackBack (0)

09/11/2014

Southeastern Manufacturing: Back in the Fast Lane

If you're a fan of auto racing, you're probably familiar with drivers trying to conserve gas. One mental trick they use when in conservation mode is to accelerate like there is an egg between their foot and the gas pedal. This technique prevents the driver from wasting fuel by accelerating too fast, or too slow. Manufacturing in the Southeast had been easing off the gas pedal the last couple of months, but according to the latest Southeast purchasing managers index (PMI), manufacturing activity recently refueled, and the egg has been tossed out the window. The Southeast PMI, while still expanding, had seen decreases in the overall index during May, June, and July. The August report, released on September 5, indicated that activity reversed course and is now accelerating.

The Atlanta Fed's research department uses the Southeast PMI to track manufacturing activity in the region. The Econometric Center at Kennesaw State University produces the survey, which analyzes current market conditions for the manufacturing sector in Alabama, Georgia, Florida, Louisiana, Mississippi, and Tennessee. The PMI is based on a survey of representatives from manufacturing companies in those states and analyzes trends concerning new orders, production, employment, supplier delivery times, and inventory levels. A reading above 50 indicates that manufacturing activity is expanding, and a reading below 50 indicates that activity is contracting.

The Southeast PMI increased to 56.7 points in August, a 5.4 point increase over July (see the chart). The PMI report saw significant gains in a few of the underlying variables:

  • New orders: The new orders subindex increased 11.2 points during July and is now back in expansionary territory. The significant gain in August went a long way in reversing the 14.1 point decline in July.
  • Production: The production subindex also rebounded into expansionary level; increasing 12.1 points from July to August.
  • Employment: The employment subindex fell 3.9 points compared with the previous month. However, employment remained in expansionary territory for the 11th consecutive month, indicating that manufacturers continue to increase payrolls.
  • Supply deliveries: The supplier deliveries subindex fell 1.0 point during August, suggesting that manufacturers are receiving their inputs slightly quicker.
  • Finished inventory: The finished inventories subindex rose 8.4 points compared with July, suggesting that inventory levels are slightly higher than ideal for manufacturers.
  • Commodity prices: Input price pressures changed only slightly, increasing 0.8 points in August to 58.3. The commodity price subindex continues to suggest moderate price pressures in the manufacturing sector.

Southeast_purchasing

When asked for their production expectations during the next three to six months, 44 percent of survey participants expect production to be higher, up from 40 percent in July. Optimism among manufacturing contacts has increased the last couple of months, after falling to 34 percent in June.

It's encouraging to see a pick-up in southeastern manufacturing activity. The national PMI (produced by the Institute for Supply Management) reached 59.0 points in August, its highest level in more than three years. (I should note that the Southeast PMI is not a subset of the national index.) Hopefully, activity in the Southeast can follow suit and continue to rise. It's also good that we got the egg removed from the car. They belong on the breakfast table (scrambled for me, not fried), not on the accelerator.

By Troy Balthrop, a Regional Economic Information Network analyst in the Atlanta Fed's Nashville Branch

September 11, 2014 in Manufacturing, Southeast | Permalink | Comments (0) | TrackBack (0)

09/09/2014

Small Business Lending in the Sunshine State

No doubt, the lending environment has changed since 2007. Local bankers from the South Florida market discussed some of those changes at a roundtable event held last month at the Miami Branch of the Atlanta Fed. The discussion focused on small business lending activity and how the outlook and behavior of small business owners have evolved since the recession.

The bankers said they have a strong appetite for what they termed "qualified" small business loans and noted that they were competing against each other for good opportunities. This environment has helped put pressure on financial institutions to provide competitive loan terms for small business owners seeking credit. Most of the banks indicated that small business lending was part of a diversification strategy and an important component of their business. In a quarterly senior loan officer opinion survey conducted by the Federal Reserve Board in the second quarter of 2014, loan officers reported easing lending standards and some improvement in small business loan demand relative to a year before (see the chart).

Senior_loanofficers

The roundtable attendees agreed with the survey's findings and noted that the pool of qualified borrowers is currently limited but may expand as banks continue to review their underwriting standards in an improving economic environment.

Although all of the participating bankers were actively engaged in making small business loans, they did indicate that businesses were generally hesitant to take on additional debt and in general were behaving very conservatively. In discussing why business owners were taking on less risk, it was noted that the effects of the recession were still fresh, and most of the bankers felt that uncertainty about the future weighed on the minds of business owners. In addition, findings from the Atlanta Fed's survey of business inflation expectations indicate that business activity for smaller companies is improving but remains below normal levels (see the chart). One banker noted that rising interest rates would indicate to business owners that the economy was strengthening and that rising rates may, in fact, prompt further borrowing.

Percent_abovebelow

Credit qualification often ultimately comes down to the fundamentals. From a credit perspective, the bankers indicated that they heavily rely on the "five C's" of credit to help evaluate loan applicants: character, capacity, credit, collateral, and capital. The roundtable participants described "character" as one of the most important variables when they consider a request. Companies that weathered the recession were viewed more favorably because it demonstrated the ability to manage a business through difficult times. An owner who has personal credit issues will generally imply potential problems in managing the financial aspect of a business. The bankers cited adequate cash flow and a good balance sheet as important credit qualifications. The lenders noted that they also analyze how businesses position their balance sheets and expenses incurred by the company not related to the business.

Overall, the sentiment among the bankers at the meeting was positive, and for the remainder of the year, they expect continued improvement in lending to small businesses.

By Karen Gilmore, a vice president and the regional executive at the Atlanta Fed's Miami Branch, and Marycela Diaz-Unzalu, a Regional Economic Information Network analyst, also at the Miami Branch

September 9, 2014 in Business Cycles, Economy, Growth, Jobs | Permalink | Comments (0) | TrackBack (0)

09/02/2014

Jobs Increase (But So Does Unemployment)

The most recent state-level labor market data from the U.S. Bureau of Labor Statistics were mixed, with one report noting an increase in employment and another indicating a rise in unemployment.

Payroll survey
Last month the Sixth District states added 27,100 net new payrolls, matching the revised June figure and just slightly below the 2014 monthly average of 28,600 net new payrolls. The only state that subtracted payrolls was Florida, which shed 1,600 payrolls (see the chart).

Contributions

Most of the District gains came from the construction sector (up 12,100), which corresponds with the results of the Atlanta Fed's most recent poll of southeastern business contacts engaged in commercial construction (we recently discussed that poll's results). Other major regional payroll contributors were leisure and hospitality (up 6,700) and education and health services (up 6,500). Two sectors—government employment and manufacturing—subtracted payrolls from total District figures. Government (down 11,100) was the only sector where payrolls declined in all states, and most of the decline came from local government. Regional manufacturing also declined by 1,600 payrolls, but Florida represented most of the District's manufacturing loss, shedding 2,900 jobs.

Household survey
On the other hand, last month's unemployment data told a different story in the Sixth District. Although the aggregate unemployment rate ticked up 0.2 percentage points to 6.7 percent in July, three of the six states in the Atlanta Fed's district (out of a total of seven nationally) had fairly notable increases. Georgia's unemployment rate increased to 7.8 percent from 7.4 percent in June, Louisiana's increased to 5.4 percent from 5.0 percent, and Tennessee led the nation with the largest month-over-month increase: one-half of a percentage point, rising to 7.1 percent in July (see the chart). In all three of these states (plus Mississippi), the unemployment rate rose for the third straight month. Mississippi had the highest unemployment rate in the nation in July (at 8.0 percent), and Georgia had the second-highest rate at 7.8 percent. This steadily increasing unemployment across states bears watching as we enter autumn.

Unemployment_rates

We'll see what story (or stories) August data tell us when the next regional employment release comes out on September 19.

Photo of Chris Viets By Rebekah Durham, economic policy analysis specialist in the New Orleans Branch of the Atlanta Fed

September 2, 2014 in Employment, Labor Markets, Recession, Southeast, Unemployment | Permalink | Comments (0) | TrackBack (0)