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09/29/2010
Slow recovery for regional labor markets
According to the establishment survey from the U.S. Bureau of Labor Statistics, the Sixth District lost 26,600 jobs in August after adding 16,600 jobs in July (see chart 1). While a large portion of the decline stemmed from government jobs, as temporary census-related jobs are being scaled back, private payrolls also declined over the month. Private payrolls in the District fell 7,800 in August after posting increases over the previous two months, albeit at a slow pace. In June and July, the District added 13,000 and 40,000 private jobs, respectively. For the United States as a whole, 54,000 nonfarm jobs were shed in August, reflecting the end of 114,000 temporary census jobs. The number of temporary census workers on payroll peaked in May at 564,000 and has declined since, leaving 82,000 census workers on payrolls in August.
Chart 1
The labor market is usually the last part of the economy to recover following economic downturns. To get an idea of how the District labor market is recovering compared to previous recessions, take a look at chart 2, which plots employment growth for the Sixth District going into and out of the past five recessions. Zero marks the official end of recessions, or the economic trough, of each one. In the latest recession, employment in the Sixth District fell much farther than in previous experiences. The labor market has not recovered quite as quickly from the 2007–09 recession compared with the past four recessions. While economic conditions of every recession are different, the recovery in labor markets from this recession seems to be longer and slower and will look like the recovery after the 2001 recession at best. Anecdotes from contacts in our district mirror this gradual recovery, reporting that they remain cautious about hiring and will take their time doing so.
Chart 2
By Sandra Kollen, a senior economic analyst in the Atlanta Fed's research department
September 29, 2010 in Employment, Labor Markets | Permalink
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09/22/2010
Southeast housing update: Recent Atlanta Fed polls show housing slump continues
The Federal Reserve of Atlanta's monthly survey of regional residential real estate brokers and homebuilders saw home sales weaken again in August. Reports from Florida brokers, however, indicated that declines moderated somewhat. A look at sales on a month-to-month basis indicated that sales softened from July to August across the region, with more respondents indicating that sales were down significantly compared with more modest responses in July.
Many contacts reported that there was a great deal of uncertainty, and buyers were hesitant to move ahead. Many commented that those who seek financing to purchase a home were finding it difficult to secure a mortgage. Brokers and builders remained frustrated with changes in finance regulation, and some noted that the process has become increasingly confusing and inconsistencies seemed to abound based on broker observations.
Many contacts reported that cash deals continued to move ahead. Data from the Orlando Regional Realtor Association confirmed demand by cash buyers held fairly steady, while financed deals continued to weaken in August.
Buyer traffic remained weak in August on a year-over-year basis. Builders continued to note that traffic softened further; however, brokers said that year-over-year declines held steady from July to August. Florida brokers actually noted a pick-up in buyer traffic, slightly ahead of a year earlier, while elsewhere in the region buyer traffic continued to weaken. Contacts across the region commented that since the close-out of the housing stimulus, traffic had been at low levels. Many commented that another housing stimulus was essential to improving conditions while an equal number were opposed to more government intervention.
Southeast brokers indicated that home listing inventories continued to rise, while builders reported that new home inventories remained below the year-earlier level but trended up slightly. Both brokers and home builders reported that downward pressure on home prices remained intense. Builders in particular were concerned about the number of foreclosed and bank-owned properties coming to market. Some noted that they could only cut prices so far while banks sold homes well below loan value.
Southeastern brokers and home builders indicated that the outlook for sales over the next several month continued to weaken in August. However, comparisons are against strong sales stimulated by the initial housing stimulus.
Note: The August survey results are based on responses from 149 residential brokers and 54 homebuilders and were collected Sept. 7–15, 2010.
The housing survey's diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. Positive values in the index indicate increased activity, while negative values indicate decreased activity.
By Whitney Mancuso, a senior analyst in the Atlanta Fed's research department
September 22, 2010 in Housing | Permalink
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09/16/2010
A tale of two (Georgia) cities
Dalton and Warner Robins have a few things in common. Both are relatively modestly sized metro areas in Georgia, each with a population of roughly 135,000. Both are roughly 100 miles from Atlanta on I-75 (Dalton to the north and Warner Robins to south).
What they do not have in common is their relative performance in terms of employment over the last several years. Since January 2006, Dalton's total employment level has declined from about 80,000 in 2006 to 65,000 (–19 percent), while Warner Robins's employment has risen from 55,000 to 60,000 (+9 percent) over the same period.
Looking closer at performance during the recession and into the recovery, the differences are just as stark. The peak-to-trough percent change in Dalton employment was –18.2 percent, and in Warner Robins it was just –3 percent. Since employment levels troughed in Warner Robins (December 2007), payrolls have increased 3.1 percent. In Dalton, employment levels troughed in September 2009 and have risen just 0.3 percent since.
The chart below plots the peak-to-trough percent change in total employment for metro areas in the Sixth District against the trough-to-present percent change. For Dalton (the red dot in the chart), the plot is –18.2, +0.3 while in Warner Robins (the green dot) it is –3, +3.1. When compared to the rest of the metro area plots, Warner Robins comes out looking best, while Dalton is among the worst.
It's not hard to figure out what is going on here. Dalton is suffering the effects of the decline in construction. Much of its industry is geared to home and office flooring products. Manufacturing employment in Dalton is down over 21 percent since early 2007. Warner Robins, on the other hand, continues to feel the benefit of Robins Air Force Base. Federal government employment in Warner Robins has increased over 13 percent during the last few years, helping to offset some declines in other sectors.
Two cities, located 200 miles apart, with two vastly different stories.
By Michael Chriszt, an assistant vice president in the Atlanta Fed's research department
September 16, 2010 in Employment, Manufacturing | Permalink
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09/09/2010
And the winner is . . . Panama City?
Like most Americans, we can't resist the urge to rank things. College football teams, best baseball player ever, greatest rock band of all time are all questions of great subjectivity (the Buckeyes, the Babe, and the Beatles, in case you were wondering—JMO). Combining rankings with actual data is a bit more objective.
For example, we wanted to compare and rank how metro areas in the region were recovering in terms of employment, focusing on seasonally adjusted data. We compared the most recent month where data was available (July) with the most recent trough in employment for each metro area in the Sixth District where seasonally adjusted data were available from the U.S. Bureau of Labor Statistics.
The metro region that has experienced the largest increase in private sector employment since its trough is Panama City, Fla., with an increase of 3.49 percent. Second is Hattiesburg, Miss., with a gain of 3.28 percent. Tied for last place are Auburn-Opelika, Ala.; Montgomery, Ala.; Gainesville, Ga.; and Nashville, Tenn. Total employment in these metro areas remains at the lowest levels experienced during the recession.
Here are the complete rankings:
| Rank | Metro area | % change in total employment since trough |
| 1 | Panama City-Lynn Haven, FL | 3.49 |
| 2 | Hattiesburg, MS | 3.28 |
| 3 | Rome, GA | 3.13 |
| 4 | Warner Robins, GA | 3.10 |
| 5 | New Orleans-Metairie-Kenner, LA | 2.92 |
| 6 | Tuscaloosa, AL | 2.64 |
| 7 | Augusta-Richmond ,GA-SC | 2.46 |
| 8 | Punta Gorda, FL | 2.32 |
| 9 | Albany, GA | 2.29 |
| 10 | Macon, GA | 2.22 |
| 11 | Johnson City, TN | 1.98 |
| 12 | West Palm Beach-Boca Raton-Boynton Beach, FL | 1.81 |
| 13 | Chattanooga, TN-GA | 1.74 |
| 14 | Lafayette, LA | 1.66 |
| 15 | Pensacola-Ferry Pass-Brent, FL | 1.65 |
| 16 | Cleveland, TN | 1.55 |
| 17 | Savannah, GA | 1.53 |
| 18 | Naples-Marco Island, FL | 1.40 |
| 19 | Bradenton-Sarasota, FL | 1.40 |
| 20 | Ocala, FL | 1.33 |
| 21 | Kingsport-Bristol-Bristol, TN-VA | 1.31 |
| 22 | Florence-Muscle Shoals, AL | 1.29 |
| 23 | Gainesville, FL | 1.26 |
| 24 | Fort Lauderdale-Pompano Beach-Deerfield Beach, FL | 1.21 |
| 25 | Sebastian-Vero Beach, FL | 1.17 |
| 26 | Valdosta, GA | 1.14 |
| 27 | Lakeland-Winter Haven, FL | 1.09 |
| 28 | Brunswick, GA | 0.97 |
| 29 | Fort Myers-Cape Coral, FL | 0.93 |
| 30 | Orlando, FL | 0.92 |
| 31 | Huntsville, AL | 0.92 |
| 32 | Morristown, TN | 0.92 |
| 33 | Tallahassee, FL | 0.88 |
| 34 | Clarksville, TN-KY | 0.87 |
| 35 | Deltona-Daytona Beach-Ormond Beach, FL | 0.85 |
| 36 | Anniston-Oxford, AL | 0.81 |
| 37 | Tampa-St. Petersburg-Clearwater, FL | 0.81 |
| 38 | Port St. Lucie-Fort Pierce, FL | 0.68 |
| 39 | Atlanta-Sandy Springs-Marietta, GA | 0.66 |
| 40 | Baton Rouge, LA | 0.66 |
| 41 | Houma-Bayou Cane-Thibodaux, LA | 0.66 |
| 42 | Knoxville, TN | 0.63 |
| 43 | Gadsden, AL | 0.57 |
| 44 | Melbourne-Titusville-Palm Bay, FL | 0.57 |
| 45 | Miami-Miami Beach-Kendall, FL | 0.57 |
| 46 | Dothan, AL | 0.53 |
| 47 | Alexandria, LA | 0.47 |
| 48 | Jacksonville, FL | 0.42 |
| 49 | Jackson, MS | 0.36 |
| 50 | Columbus, GA-AL | 0.34 |
| 51 | Dalton, GA | 0.31 |
| 52 | Gulfport-Biloxi, MS | 0.28 |
| 53 | Mobile, AL | 0.23 |
| 54 | Decatur, AL | 0.19 |
| 55 | Athens-Clarke, GA | 0.12 |
| 56 | Birmingham-Hoover, AL | 0.02 |
| 57 | Auburn-Opelika, AL | 0.00 |
| 58 | Montgomery, AL | 0.00 |
| 59 | Gainesville, GA | 0.00 |
| 60 | Nashvlle-Davidson-Murfreesboro, TN | 0.00 |
| Source: U.S. Bureau of Labor Statistics, FRB Atlanta | ||
By Michael Chriszt, an assistant vice president in the Atlanta Fed's research department, and Amy Ellingson, an analyst in the research department
September 9, 2010 | Permalink
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09/01/2010
Thoughts on Hurricane Katrina, five years later
An anniversary is a time of reflection and a time of planning for the future. We marked the fifth anniversary of Hurricane Katrina a few days ago. My first thoughts of reflection go back to the morning when the storm came in. I had planned to get to work early, knowing I would spend the day doing various economic assessments of what damage the hurricane had wrought. But I first had to deal with a disaster of my own. My 9-year-old daughter had left the faucet running into a plugged sink in our upstairs bathroom. Our entire downstairs was flooded. As we did what we could to begin the cleanup, I watched the radar image of Katrina come on land from my wet, but safe, home outside Atlanta. What I would see that day would put our little problem in perspective.
By the time I got into work Katrina was well ashore. It seemed pretty clear that the Mississippi coast had borne the brunt of the storm and New Orleans had been spared a direct hit. As we began to develop briefing materials for the Bank's senior officers, news reports began to roll in describing the devastation in Biloxi, Gulfport, and Pass Christian. We also saw pictures of the damage in New Orleans—hotel windows missing and the torn fabric atop the Superdome. I wrote in one of my first communications of the day that "In New Orleans, structural damage appears severe in places but not catastrophic."
It wasn't until later that day that we began to hear that there was flooding in the Big Easy. From Atlanta, we figured it was the effects of the storm surge through the wetlands bordering St. Bernard Parish, and maybe levees were overtopped. All hurricanes bring storm surge and some flooding, so we didn't think too much of it, to be honest. We were focused on getting damage assessments from the Gulf's energy infrastructure, which we would find out were severe.
Then I read a newswire report that several levees in New Orleans had given way. I had watched a TV special about how New Orleans was vulnerable to hurricane-induced levee breaches, but the storms they described hit New Orleans head on; Katrina had missed to the east. It still didn't register. Then we saw the first photos. The entire city was flooding. It was clear we were dealing with a disaster we were told could happen, but none of us believed it would ever really happen. But it was happening, and like all Americans we felt helpless.
That was five years ago, but we can all remember watching the tragedy unfold like it was yesterday. I remember worrying about my colleagues in our New Orleans office, about the friends I had in Mississippi, and how we could ever be expected to go about our work in trying to measure the impact on the economy in what was clearly an immeasurable human catastrophe.
The response of the Federal Reserve Bank of Atlanta to Hurricane Katrina is documented in our 2005 Annual Report and in several articles and presentations made in the days and months following the event. In the Research Department, we became unwilling experts in disaster economics, never forgetting the heartbreak and human toll of Katrina. The Brookings Institute performed similar exercises, and their latest work is an outstanding look back, and also a look ahead.
I'm fortunate that my work takes me to New Orleans several times a year. I've been able to witness the city's slow but steady recovery and have met some of this country's best and strongest citizens. I've viewed the restoration along the Mississippi coast with awe.
When the most dire predictions were being made regarding the impact of the oil spill, I thought back to Katrina and how these people bounced back with pride and dignity.
As the people who survived and rebuilt five years ago reflect on and plan for the future, I had one recurring thought—not one measured by any economic time series or accounted for in any econometric model. No matter what my friends along the Gulf Coast and New Orleans may face, I wouldn't bet against them. Ever.
By Michael Chriszt, an assistant vice president in the Atlanta Fed's research department
September 1, 2010 in Hurricanes, Katrina, Natural Disasters, New Orleans | Permalink
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