Economy Matters logo


The Atlanta Fed's SouthPoint offers commentary and observations on various aspects of the region's economy.

The blog's authors include staff from the Atlanta Fed's Regional Economic Information Network and Public Affairs Department.

Postings are weekly.



New Orleans Area Optimistic Heading into 2015

During the last couple of months, the Regional Economic Information Network team from the New Orleans Branch of the Atlanta Fed was in contact with more than 30 business leaders to gauge sentiment about current and anticipated economic conditions in the region (which covers central and south Louisiana and Mississippi, south Alabama, and the Florida Panhandle to Apalachicola). The optimism and confidence that our contacts expressed over the last few quarters continued and was in fact more prevalent this time. Although contacts' expectations in previous months were for "slow and steady" growth, many business leaders now feel assured about their outlook for a pickup in growth in 2015.

In particular, we continue to receive upbeat reports about the tourism sector. This time, the message came from the Florida Panhandle again, where it was mentioned that tourism was growing into a year-round business, supported largely by an emergence of international travelers rather than the typical wintertime snowbirds. Retail contacts were also very positive, especially about holiday sales in November but also about a notable general sense of improving consumer sentiment. Another sign of strength in the region was commercial real estate, which was reported as robust across Louisiana, particularly for retail, multifamily, and office space leasing and development.

Employment and labor markets
Generally, contacts continued to report positive net hiring in response to increases in demand, though they didn't report acceleration from previous months. We continue to receive reports about firms' efforts to use automated solutions to reduce staffing or conduct optimization studies to enhance efficiency while reducing costs. Once again, contacts noted major challenges filling certain skilled positions, such as trades workers, engineers, truck drivers, and information technology professionals—a predicament business contacts have expressed for more than a year.

Costs, wages, and prices
For several months now, contacts have reported some cost pressures with little pricing power. In most cases, firms have been able to increase prices only after a competitor successfully does so or when contracts are up for renegotiation. Regarding the declining price of oil, energy industry representatives shared their view of the impact on their industry, which they indicated would initially affect smaller players (described in a recent SouthPoint post). In addition, a few contacts noted that declining energy prices posed a risk to their 2015 outlook. For the first time in many months, a number of contacts reported across-the-board wage pressures, which were previously isolated to certain positions. Others indicated they expect to encounter pressure in 2015. Several firms we spoke with indicated they expanded merit program budgets in 2015, with most increases being in the range of 2.5 to 3 percent, though a few in the range of 3 to 5 percent. Though a number of firms reported they were investigating strategies to control compensation costs with tools such as performance-based incentives, health care contributions, and targeted salary increases—a trend we've noted over the last couple of quarters.

Availability of credit and investment
Access to capital and availability of credit remained a nonissue for the majority of our contacts, though some small firms indicated obtaining credit from traditional banks remained difficult because of qualification requirements. Banking contacts indicated that loan demand strengthened in the third quarter. Capital investment reports were consistent with the last few cycles, reflecting some expansion activity but mostly focused on efficiency or maintenance.

Business outlook
Although some contacts noted a bit of uncertainty about the outlook—including the declining price of oil, increased government regulations, and the strengthening U.S. dollar—contacts were overall positive and confident about 2015 expectations. What's your outlook for 2015?

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Regional Economic Information Network at the New Orleans Branch of the Atlanta Fed

December 30, 2014 in Employment, Florida, New Orleans, Retail, Tourism | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference New Orleans Area Optimistic Heading into 2015:



A Timely Talk with Energy Professionals

If you read or watch the news, you've undoubtedly noticed what's happening with the price of oil. But for those of you who may have missed these reports, here it is in a nutshell: the price of Brent crude oil, the international benchmark, has declined more than 40 percent since its peak of over $115 in mid-June (see the chart).


Many reports have discussed what the decline means to the energy industry and economy as a whole. In fact, the Atlanta Fed's very own macroblog published a post that examined the impact on energy investment and overall economic growth. We were also fortunate to be able to discuss this important and timely situation, along with other industry trends, with energy sector representatives last month during our Energy Advisory Council meeting held at the New Orleans Branch. So what did council members think about the declining price of oil? I gleaned a few key takeaways.

Industry effects
Council members reported that the recent drop in the price of oil had led exploration and production firms to reevaluate operational flexibility, cost-management strategies, and extraction technologies. These firms also initiated renegotiations with oilfield service companies for reductions to pricing structures, which a recent report suggested may drop as much as 20 percent.

In addition, council members conveyed their expectation that marginal oil producers may be negatively affected by falling oil prices, as their breakeven point is typically much higher than the larger producers. They shared that foreign oil-producing countries that acquire a majority of their revenues from the world's most traded commodity may also be adversely affected, which is a known concern among many key people inside the industry. The council also pointed out that if oil prices continued to decline or even hold at current levels, capital spending may be affected since firms would have fewer profits to reinvest into production and growth. Some reports indicate that this effect on spending is already beginning to occur. However, some members told us that they anticipate continued steady production in both deepwater and onshore drilling since many of these projects are large scale and long term and have high front-end costs (which in many cases have already been funded). Decisions about future projects may need to be reconsidered, however.

All in all, the Energy Advisory Council meeting was very timely, considering our attempts to understand what was happening globally with the price of oil and its impact on the economy. It will be interesting to learn how the energy industry will have adapted to current events when the council convenes again in March 2015.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Atlanta Fed's New Orleans Branch

December 17, 2014 in Economic Growth and Development, Economy, Energy, New Orleans, Oil | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference A Timely Talk with Energy Professionals:


Industrial Info Resources reports 2014 construction and maintenance spending on U.S. pipelines declined 10% while downstream chemical process and manufacturing plants increased spending more then 80%. 40 new natural gas fired power plants being planned valued at $20 Billion.

Posted by: Donald Cotchen | 01/22/2015 at 10:19 AM

Great article! My thoughts are that with prices dropping in countries that might be prone to recession, will consumers not spend the money they are saving because they continue to wait for prices to drop. Encouraging deflation.

Also, airlines that have locked in fuel prices 90 days in advance, how will they react in the near future contracts?

Posted by: Ronald Bowlin | 12/20/2014 at 08:19 PM


Jazz Fest: Another Capital Boost in New Orleans

In March, I wrote about the impact of Mardi Gras on the New Orleans economy. Well, in case you didn’t know this already, we love our festivals here in NOLA. The fact that they support our economy is just lagniappe (that’s “a little something extra” in New Orleans–speak). Second only to Mardi Gras in terms of economic impact is the New Orleans Jazz and Heritage Festival, or “Jazz Fest,” which this year spanned two spring weekends: April 27–29 and May 3–6. The festival attracts about 400,000 people each year, who come to hear eclectic musical performances (from blues, jazz and rock to gospel, zydeco, pop, and more) and eat some of the best local food around (crawfish monica, alligator pie, shrimp bread, and cochon de lait, to name a few).

According to the New Orleans Jazz and Heritage Festival and Foundation Inc., the nonprofit organization that owns and manages the event, Jazz Fest generates more than $300 million for the city. This figure includes spending at the festival, Jazz Fest staff wages, hotel rooms, and estimated spending at restaurants and other shops and activities. The foundation uses the profits from the festival to preserve the city’s musical culture by putting on other festivals and concerts (smaller and free), lectures and literary events, gallery exhibits, educational programs, and grants for students and community cultural organizations. So you could say that Jazz Fest not only has a positive economic impact on New Orleans but also a significant human capital contribution as well.

If you haven’t been to Jazz Fest yet, make plans to come next year. And remember, your contribution produces economic value in the form of financial and human capital.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Atlanta Fed's New Orleans Branch

May 20, 2014 in Louisiana, New Orleans, Tourism | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference Jazz Fest: Another Capital Boost in New Orleans:



Does Fat Tuesday Give New Orleans a Fat Wallet?

"Happy Mardi Gras!" is what's been enthusiastically shouted across the streets of New Orleans the past couple of weeks. Well, there's that and "Throw me something, Mister!" It's Mardi Gras season—a time of king cakes, wild and crazy Bourbon Street, and extravagant parades that include musicians, dancers, and colorful floats filled with masked locals who throw shiny plastic beads and trinkets to excited crowds. Though it may seem like a haze of decadence and chaos spanning two weeks in New Orleans, a lot of planning and money from locals and tourists alike goes into this lively time of year. More than a million people pack the city's streets during the two weeks leading up to Mardi Gras day, also known as Fat Tuesday (which falls on March 4 this year). So, what does Mardi Gras mean to the local economy?

In 2009, the Carnival Krewe Civic Foundation Inc. commissioned a biennial study of the economic impact of Mardi Gras. Tulane University economics professor Toni Weiss prepared the 2009 and 2011 reports. However, in 2013, New Orleans hosted the Super Bowl during Mardi Gras season, making it difficult to separate the economic effects of the two events. Therefore, the next study will reflect 2014 data.

According to the 2011 report, the economic impact on the city was $300 million, accounting for 1.5 percent of New Orleans's gross domestic product. It's worth noting that this figure is likely understated as it does not include incremental restaurant business, airport usage, or any businesses' fixed investment. It may also underestimate local citizens' Mardi Gras–related spending. Weiss evaluated seven main categories in the study: lodging and nonlodging, food and alcohol, merchandise, Mardi Gras–themed tours, Krewes (organizations of revelers who put on the parades, host Mardi Gras balls, and participate in social events throughout the year), Krewe members (the aforementioned revelers who spend their own money on the events), and the city government. Direct expenditures from these categories during the 2011 Mardi Gras season were an estimated $144 million.

So where did the other $156 million come from? According to Weiss, the Mardi Gras "franchise" the city created accounts for the difference. It includes an extensive infrastructure of lodging, food and drinking establishments, retail shops selling themed merchandise, and other factors from which other events and businesses (for example, conventions unrelated to Mardi Gras specifically) could benefit. The net fiscal benefit to the city was more than $13 million, or a return of $8.45 for every city dollar spent.

If you ask me, that's a pretty sizable return on investment—enough to fatten the city's wallet quite a bit.

Weiss's team will begin collecting data on the 2014 Mardi Gras season in a couple of weeks, and I look forward to seeing what the new results show.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Atlanta Fed's New Orleans Branch

March 4, 2014 in Economy, Louisiana, New Orleans, Tourism | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference Does Fat Tuesday Give New Orleans a Fat Wallet?:



Southeastern Insights: Slow Growth with a Dash of Uncertainty and Caution

The Atlanta Fed's Southeastern Insights report provides a broad summary of economic intelligence gathered through our network of business contacts and other sources throughout the Southeast each Federal Open Market Committee (FOMC) cycle. The latest report covers the period from September 19 to October 30.

As a complement to Southeastern Insights, Adrienne Slack, vice president and regional executive at the Atlanta Fed's New Orleans Branch, discusses the regional economy.

Here are some highlights from the report:

  • Since the previous FOMC cycle, most business contacts expect continued slow growth in the short term. However, several contacts noted a rise in uncertainty tied to the effects of the debt ceiling debate and the government shutdown.
  • Mixed reports from labor markets, combined with renewed uncertainty, have not strengthened employment trends since the previous cycle and have caused many business leaders to delay decisions about hiring new employees. Overall, very few companies reported adding to employment levels as a result of organic growth, regardless of how robust that growth was. Some companies cited paying overtime before hiring new employees unless the new hires were expected to generate revenue.
  • Contacts continued to report stable pricing with no major concerns about inflation; cost pressures were mostly well contained. However, isolated industries that reported minimal cost increases did note that they were able to pass through the increases to their customers (such as fast food, grocery stores, and some construction). Overall, margins remained tight.  Reports indicate wage increases remained stable (mostly in the 2 percent to 3 percent range) across most industries. However, there were scattered reports of upward wage pressures for high-skilled workers.
  • While our contacts expressed some uncertainty and caution, their medium-term outlook is that the economy will continue to improve.

Atlanta Fed President Dennis Lockhart shares this view, and he harbors concern about the likelihood of more robust growth in the near term. In a November 12 speech in Montgomery, Alabama, President Lockhart said that:

My baseline outlook calls for an improved economy in 2014—growing a bit faster than it has been. But that may not happen. There is a nontrivial chance that 2014 will look like 2013. Next year's economic outcomes will swing importantly on fiscal drag and consumer spending.

The concern surrounding fiscal drag is twofold: the level of government spending and the role that uncertainty plays in business decision making. A recent macroblog post noted that:

  • Most firms are expressing more uncertainty,
  • For a significant portion of firms, uncertainty today is having a greater impact than six months ago, and
  • The government is heavily featured as a source of the uncertainty.

Regarding consumer spending, indications are that spending remains cautious. As reported in Southeastern Insights:

Retail industry reports were mixed, yet most contacts described a decline in sales and demand following a slower than expected summer and back to school season. Some retailers also indicated they plan to hire fewer seasonal staff and are less optimistic about the upcoming holiday season. A bright spot in consumer spending continues to come from the strength of high-end consumers; however, their spending has not been significant enough to offset the scaling back by low- to mid-end consumers.

It's clear that what we are hearing from our business contacts demands that we remain cautious regarding the overall economic outlook. As President Lockhart noted in Montgomery:

I remain cautiously optimistic that growth will pick up next year. This is my baseline outlook. But, at this juncture, I can't fully discount the possibility that the expected economic improvement won't materialize and that we'll see a replay of the weak growth of the past three years.

Photo of Mike ChrisztBy Mike Chriszt, a vice president in the Atlanta Fed's public affairs department

November 19, 2013 in Economic Growth and Development, Economy, Employment, New Orleans, Retail, Southeast | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference Southeastern Insights: Slow Growth with a Dash of Uncertainty and Caution:


The possibility of a few more slow years is disheartening. Hopefully it will pick up just a little bit; eventually we will get out of this slump.

Posted by: Jackie | 12/18/2013 at 05:13 AM


Rebuild and Reshape

Nearly eight years ago, Hurricane Katrina devastated the Louisiana and Mississippi Gulf Coast. Most of the city of New Orleans was flooded in its wake, and the loss of life and property was tremendous. Having lived through these events, I can look back at the last eight years and feel the pride at what my city has accomplished since Katrina.

New Orleans has rebuilt and continues to reshape itself. As reported in the University of New Orleans Metropolitan Report, the New Orleans metropolitan statistical area population has steadily increased to 89 percent of pre-Katrina levels, to approximately 1.2 million residents (see the chart). In addition, the New Orleans unemployment rate in first quarter 2013 was at 6.4 percent, well below the national average, with major employment gains across several sectors of the region’s economy.

Louisiana and New Orleans region have taken advantage of post-Katrina opportunities, spurring entrepreneurs and business incubators such as Idea Village and becoming a mecca for talented young people moving to the region with jobs trending toward information services. A recent Forbes article ranked New Orleans as the number-one “brain magnet” in the United States in February 2011.

New Orleans is known for many things, including an affordable cost of living, low operating costs for businesses, state tax credits for leading industries, and the quality of life that young entrepreneurs seek. NOLA (as it is called by locals) also leads the state in tourism, hosting national events such as the 2013 Super Bowl, the 2013 Woman’s Final Four, and the annual traditions of Mardi Gras and Jazz Fest, which attract international crowds. Meanwhile, NOLA’s resurgence can be seen in rising commercial construction led by the robust biomedical industry, and urban renewal is driving residential development.

Louisiana and New Orleans have been very busy attaining accolades, and their growth and accomplishments contribute to the Southeast economy. Examples include:

  • April 2013: Bloomberg ranked New Orleans/Metairie/Kenner among the top 12 boomtowns in the country.
  • May 2013: Forbes ranked New Orleans the third-best city for the growth of information technology jobs (publishing, software, entertainment, data processing, and gaming).
  • May 2013: The Louisiana Small Business Development Center (SBDC) Greater New Orleans Region was named the top SBDCs in the nation, earning the U.S. Small Business Administration’s SBDC Excellence and Innovation Award.
  • May 2013: The Southern U. S. Trade Association and World Trade Center in New Orleans ranked Louisiana the number-five export state in the nation.
  • May 2013: A survey in Chief Executive Magazine ranked Louisiana the 11th-best state for business.

While the memories and lessons of Hurricane Katrina remain prominent in our minds, we all can share in the pride as the region continues to build a promising future.

By Gail Psilos, a director of the Regional Economic Information Network in the Atlanta Fed’s New Orleans Branch

June 20, 2013 in Economic Growth and Development, Growth, Natural Disasters, New Orleans, Recovery | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference Rebuild and Reshape:



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


TrackBack URL for this entry:

Listed below are links to blogs that reference Thoughts on Hurricane Katrina, five years later:


Google Search

Recent Posts

November 2015

Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30          



Powered by TypePad