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.



Heading into Fall, Florida's Recovery Continues

In an August SouthPoint post about economic conditions in north and central Florida, we stated that the sentiment of our contacts during the summer had been the most upbeat since before the recession. Since then, the Jacksonville REIN team has met with more than 50 business contacts, and it was very clear that the optimism was ongoing.

Contacts were upbeat as revenues and volumes increased. Demand for residential purchase mortgages met expectations, and residential lot development had made a comeback since the recession. Activity in multifamily real estate was robust, commercial loan activity improved, and office space absorption increased.

Employment and labor markets
Employment levels remained relatively flat for most, but some larger firms added to headcount. Complaints about difficult-to-fill positions persisted, though there was little evidence of contacts aggressively raising pay to attract talent. For some financial institutions, the increased availability of full-time positions in the marketplace has created turnover of part-time staff such as tellers. In addition to the usual difficult-to-fill positions (information technology, accounting, and compliance and risk), we heard stories of challenges filling lower level, low-skill positions in industries such as hospitality. In the Space Coast region, there were reports of overall shortages of workers.

Costs, wages, and prices
Most contacts indicated that nonlabor inputs have increased at about the rate of inflation. However, commodities like resins, plastics, and aluminum are expected to remain fairly flat for the foreseeable future. Construction costs in our area have reportedly stabilized, and fuel prices have lowered considerably. Food costs, particularly proteins, are up compared with last year.

Anecdotes about 2015 health care premiums were mixed, as increases ranged from less than 1 percent to as high as 20 percent. Many companies indicated that they plan to change benefit structures, raise deductibles, alter prescription plans, and eliminate dependent coverage (and so on) in an effort to avoid significantly increasing the proportion that employees pay as a result of worries about talent acquisition and retention. Others are moving ahead with shifting some measure of any increases to employees.

Most contacts reported moderate wage pressures for technically skilled positions. Some reported increased starting salaries for some lower-level jobs such as call center positions, and some are forced to offer more to attract those with internet or digital media skills. Most contacts continued to budget merit increases in the range of 2.5 to 3 percent.

Availability of credit and investment
Access to capital and availability of credit continued to be a nonissue for the majority of our contacts, but some small organizations continued to struggle for funds. Banking contacts reported strong loan demand for purchase mortgages in addition to new construction loans, refinances, home improvement loans, consumer loans, and increases in commercial loans. Reports of capital expenditures including major port expansions, health care facility construction projects, and merger and acquisition activity were widespread across the region.

Business outlook
Some contacts mentioned downside risks to the outlook, including the outcome of today's election, increased government regulations, and—most recently—worries about weakness internationally and the resulting market volatility that crept up in mid-October. Generally, however, contacts reported an expectation for higher growth in the short and medium term.

Tell us: What's your outlook for growth for the rest of 2014 and into the next year?

By Chris Oakley, regional executive, and Sarah Arteaga, REIN director, both at the Atlanta Fed's Jacksonville Branch

November 4, 2014 in Economic conditions, Employment, Labor Markets, Outlook, Prices, Recovery, Southeast | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference Heading into Fall, Florida's Recovery Continues:


Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in


Sunnier Times in the Sunshine State

During the most recent cycle of the Federal Open Market Committee (which ran from June 19 to July 30), the Atlanta Fed’s Regional Economic Information Network (REIN) team at the Jacksonville Branch talked with more than 30 Florida business leaders, including branch directors, about economic conditions. As one who has been involved with the REIN program since its inception in 2008, I can attest that, while “slow and steady” remains a theme in this economic recovery, the sentiment of our contacts over the past two months has been the most upbeat since before the recession.

General business conditions
Almost all firms reported increases in business activity. Two design/build firms indicated robust demand and reasonably strong pipelines, including a strengthening in industrial and office development. For the first time, we heard of some speculative building in the commercial sector from three different contacts. Housing continued its slow improvement, though several contacts used the word “bumpy” to describe activity. The appetite for auto purchases continued, as a recent SouthPoint post discussed, with lenders citing robust auto-lending activity. Some banks also reported that consumers are now slowly adding to outstanding credit card balances.

Employment and hiring
Labor markets tightened as the number and types of difficult-to-fill positions increased. In addition to highly skilled positions that are normally a challenge to fill (including information technology and engineering), contacts shared frustrations with filling midlevel positions such as analysts. In construction, finding subcontractors and skilled laborers was harder than normal. However, one contact saw a 20 percent annual increase in revenue as clients resumed a normal hiring pace.

Labor and input costs
Contacts reported seeing wage pressures in their organizations. For example, demand for truck drivers that one firm described as “significant” led to a 33 percent pay increase since the beginning of 2014. One retail contact reported wage increases for maintenance positions as the “construction boom in the area lures these workers away.” Most contacts previously noted merit programs of between 2–3 percent. However, for the first time, several contacts discussed plans for more aggressive increases of 4–5 percent. Regarding health care, most anticipate premiums to continue growing significantly, and many have self-insured to mitigate rising costs.

Most contacts described nonlabor input cost increases as benign. Although the cost of some construction-related materials was a cause for concern earlier this year, most of this volatility has dissipated. While most contacts do not claim much pricing power, some companies are seeing improved margins as they are able to push through increases in the form of higher sales prices.

Credit and investment
Contacts at medium and large companies noted that while credit is readily available, many are still risk-averse and avoiding taking on debt, relying instead on cash flow or internal reserves to fund projects. Companies that do borrow are undergoing “rigorous but rational underwriting.” One construction contact said that many of his larger clients are no longer just catching up from the recession but are now willing to take risk and invest in adding capacity. A bank also reported more risk-taking among customers, especially in commercial real estate and equipment leasing. At the consumer level, real estate agents and lenders referred to qualified mortgages as something of an impediment to mortgage loan activity, but they generally viewed the more rigorous process as worth the effort to reduce risk.

Since June, the consensus from REIN contacts at the Jacksonville Branch was largely positive. Overall demand conditions have improved, though some expressed concerns about regulatory impact. Some contacts specifically mentioned dissipating headwinds as a reason for increased investment, including one contact who sees enough improvement in the economic environment that the company has changed its strategy from diversification to more rapidly expanding its footprint with aggressive new revenue goals.

Does this jibe with what you, our readers, are seeing? As always, your thoughts are welcome.

By Sarah Arteaga, a Regional Economic Information Network director in the Atlanta Fed's Jacksonville Branch

August 6, 2014 in Economic conditions, Employment, Florida, Health Care, Jobs, Labor Markets, Recession, Recovery | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference Sunnier Times in the Sunshine State:


Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in


Separating Out Job Groups in the Sixth District

There’s been a lot of discussion about the decline of jobs considered to be “mid-skilled” during the last several years. A recent Regional Economic Press Briefing prepared by our friends at the New York Fed took another look at this important issue. They aggregate occupations into three skill categories: higher-skill, middle-skill, and lower-skill professions. The specific occupations of each category are outlined in the following chart:


Using data from the U.S. Bureau of Labor Statistics’ Occupational Employment Statistics dataset, we were able to decompose the Sixth District states’ labor markets using the same skill categories that the New York Fed used.

Both the higher-skill and lower-skill categories grew from 2007 to 2013, and the middle-skill group shrank for both the United States and Sixth District. The proportion by which the middle-skill group’s share shrank during the time period was roughly similar for the nation and Sixth District, with the difference between the two differences being less than 1 percentage point. Yet more interesting, we were able to compare how these groups’ compositions have changed prior to and following the recession for each Sixth District state. You can see a state-by-state decomposition in the following chart:

Florida, Georgia, and Tennessee all saw their share of their middle-skill jobs shrink by roughly 4 percentage points during the time period, while Alabama’s share of middle skill jobs decreased by about 3 percentage points. The middle-skill groups in Louisiana and Mississippi, often the outliers in Sixth District data, shrank by the smallest amounts during the time period 2007–13, roughly by 2 percentage points. However, Louisiana’s share of higher-skill occupations was the only one not to expand from 2007 to 2013. The shrinking share of middle-skill jobs in that state was almost solely the result of a growing share of lower-skill jobs.

To understand how the data in the chart above came about, we can look at changes in the composition of these groups (higher-, middle-, and lower-skill groups) by state during both the recession and recovery. The first chart below shows that the middle-skill groups took a particularly hard hit across the nation and District in the previous recession...


...while those middle-skill jobs have been the most sluggish to come back, both across the nation and the Sixth District, as the following chart shows:


By Mark Carter and Sandra Ghizoni, both senior economic analysts in the Atlanta Fed’s research department

July 3, 2014 in Employment, Jobs, Labor Markets, Recession, Recovery, Southeast | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference Separating Out Job Groups in the Sixth District:


Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in


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:


Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in


Middle Tennessee Economy Slogging Along, but Bright Spots Emerging

Along with the rest of the state, Middle Tennessee's economy has been growing slowly since the end of the recession. Unemployment rates across the mid-state remain stubbornly high, but there are some positive signs appearing in manufacturing and housing.

On Friday, September 21, I attended the annual Middle Tennessee State University (MTSU) Economic Outlook Conference hosted by the MTSU Business and Economic Research Center. The center also happens to be a member of the Atlanta Fed's Local Economic Analysis and Research Network (or LEARN) program. The center's director, Dr. David Penn, offered his views on where Tennessee and the Nashville economies are headed.

Dr. Penn's presentation covered labor markets, manufacturing, housing, and state sales tax revenues. While there was some good news, I'll start with the not-so-good news.

There is an old saying: "You're moving slower than pond water." This saying could apply to the unemployment rate in Tennessee because it is not coming down very fast. Although Nashville is still generating jobs, this job generation is at a painfully slow pace. The metro area's seasonally adjusted total employment level is only up by 1,000 compared to a year ago (through August). Construction employment in Middle Tennessee has cooled off considerably, and several months of negative job growth in the education and health care sectors along with the government shedding jobs has largely offset gains in other sectors. The manufacturing sector of the job market has been rising consistently over the year. Professional services and the leisure and hospitality sectors are also demonstrating steady job growth. Durable goods manufacturing has been especially strong.

This is certainly not applicable to every part of Middle Tennessee, as some areas have already recovered from job losses experienced during the recession. Clarksville, for example, has done quite well, as they now exceed their prerecession employment level, and Nashville is getting closer to regaining all jobs lost during the recession.

The current rate of unemployment in the Nashville metro area has dropped from 8 percent to 7 percent on a seasonally adjusted basis, but has ticked up from 6.5 percent in April. One reason for the recent uptick in Nashville's unemployment rate is that the number of people reentering the labor force has increased sharply since the first quarter of the year.

On the brighter side, Dr. Penn stated that the state's housing market is getting better. The Nashville housing market is experiencing price growth for the first time since 2008. The city has seen home sales rise 27 percent over last year's low levels. As a result, the sales of building materials have risen. In addition, Nashville's sales tax collections are higher now than before the recession; however, inflation-adjusted purchasing power is 6.8 percent lower.

In the end, Dr. Penn's near-term expectations are for slow employment growth, a slower rise in the rate of sales tax collections, mild increases in construction activity, and a drifting down of the unemployment rate. Not the rosiest of forecasts, but it could be a lot worse.

By Troy Balthrop, REIN analyst at the Nashville Branch of the Federal Reserve Bank of Atlanta's Nashville Branch

October 4, 2012 in Economic Growth and Development, Recession, Recovery, Tennessee | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference Middle Tennessee Economy Slogging Along, but Bright Spots Emerging:


Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in


Sunny in northeast Florida: More signs of a housing rebound

Residential real estate markets continued to recover in northeast Florida, according to a recent poll conducted by the Atlanta Fed. In late June, staff from our Jacksonville Branch along with the Bank's Center for Real Estate Analytics met with nearly 250 real estate professionals at the Florida Realtors conference in St. Augustine, Florida. Conference participants hailed from the Jacksonville, St. Augustine, and Gainesville areas, and most were residential real estate professionals. We asked a series of questions to ascertain the state of the residential real estate markets in northeast Florida. Their responses showed that conditions continued to improve.

For example, a significant majority reported that June home sales exceeded the year-earlier level.


In addition, the sales outlook for the remainder of the year was positive as most expected modest gains on a year-over-year basis.


Importantly, most participants agreed that home prices have bottomed or begun to recover.


And the majority of respondents anticipate modest home price growth during the second half of 2012 compared with a year earlier.


While these responses represent only a segment of the regional housing market, we read the results as further indication that the hard-hit residential real estate markets are making progress toward recovery.

Jessica DillBy Jessica Dill


Whitney MancusoWhitney Mancuso, senior economic analysts in the Atlanta Fed's research department


July 5, 2012 in Florida, Housing, Real Estate, Recovery | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference Sunny in northeast Florida: More signs of a housing rebound:


Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in


Irene's impact

As we witness another hurricane hit the U.S. mainland, we recount our own region's past disasters and lessons we have learned regarding the economic impact of these events. It was six years ago that Hurricane Katrina struck, and we have written about that experience in past posts. Data are still coming in, but it appears that while flooding associated with Hurricane Irene caused severe damage in several areas, destruction was not as bad as many had forecast. Looking back at previous disasters can help us understand what lies ahead in terms of the economic impact of Irene.

In the Wall Street Journal's Real Time Economics blog, Conor Dougherty writes that:

"Areas hit by some of the biggest natural disasters have in many cases recouped the economic losses in the form of federal aid and insurance payments, according to data from Moody's Analytics and the Insurance Information Institute. Here's a chart of past disasters, their cost and the eventual tally of aid and insurance payments.

"Hurricane Katrina, which hit in August 2005, has been by far the most costly natural disaster in recent history, resulting in $140 billion in damage and lost output. (That figure is in 2011 dollars and does not include the impact of higher energy prices after the storm.) But over the following months and years, businesses, residents and governments in the area collected a total $149.2 billion in aid and insurance payouts.

"There is no dollar figure that can be attached to the loss of life, emotional toll and massive loss of population that lingers six years later. But with Hurricane Irene barreling down on the Eastern seaboard, it's worth noting the damage of lost property and output is often made up in the end."

A recent Brookings Institution publication, Resilience and Opportunity Lessons from the U.S. Gulf Coast after Katrina and Rita, makes another point about economic recovery from natural disasters:

"Opportunity is a critical component of post-disaster recovery. It is defined by the extent to which a community uses a disaster as an occasion not simply to return to normal but also to achieve a new and better standard of living."

What is the Fed's role in helping the economy recover from natural disasters? The first response is through our role in the payments system. Federal Reserve officials helped to ensure the country's payments and financial systems get back online as quickly and efficiently as possible. The Atlanta Fed's response to Hurricane Katrina is one example.

Our superb economic education staff also used Hurricane Katrina to develop a financial and economic education tool in Katrina's Classroom: Financial Lessons from a Hurricane. The program is a four-chapter, DVD-based curriculum developed to help people prepare for disasters and recover from them.

Another question to be addressed in the wake of a natural disaster is what the role of monetary policy should be. Again, looking back to Katrina, the discussion was primarily about the potential impact on overall economic activity and inflation from reduced oil supply and transportation disruptions on the Mississippi River. At the Atlanta Fed, the view was that trying to mitigate a temporary supply shock by easing policy may have adverse implications for the economy down the road. Some economic research goes so far as to suggest policy should tighten in response of temporary supply disruptions from disasters. In 2007, the St. Louis Fed published a study, "Monetary Policy and Natural Disasters in a DSGE Model: How Should the Fed Have Responded to Hurricane Katrina?" Authors Benjamin D. Keen and Michael R. Pakko wrote:

"In the immediate aftermath of Hurricane Katrina, speculation arose that the Federal Reserve might respond by easing monetary policy. This paper uses a dynamic stochastic general equilibrium (DSGE) model to investigate the appropriate monetary policy response to a natural disaster. We show that … a nominal interest rate increase following a disaster mitigates both temporary inflation effects and output distortions that are attributable to nominal rigidities."

Similar to how hurricane forecasters have improved their models by taking advantage of past experience and applying lessons learned, economic forecasters are also trying to improve their understanding of the economic effects of disasters and the optimal policy responses.

Photo of Michael Chriszt By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department

September 2, 2011 in Hurricanes, Katrina, Natural Disasters, Recovery | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference Irene's impact:


Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in


Beige Book: Only part of the story

The Federal Reserve released its latest Beige Book on June 8. The Beige Book is published eight times per year. Each Federal Reserve Bank gathers anecdotal information on current economic conditions in its District through reports from Bank and branch directors and interviews with key business contacts, economists, market experts, and other sources. The Beige Book summarizes this information by district and sector. An overall summary is prepared as well. Much attention is paid to the first sentence of the summary and the first sentence of each Bank's report because they give an overall take on conditions as reported.

The first sentence of the summary for the June 8 report reads:

"Reports from the twelve Federal Reserve Districts indicated that economic activity generally continued to expand since the last report, though a few Districts indicated some deceleration."

The following recounts the first sentence of each Reserve Bank's submission:

  • Boston: Many business contacts in the First District report improving economic conditions.
  • New York: The Second District's economy has continued to expand since the last report, though at a somewhat diminished pace.
  • Philadelphia: Business activity in the Third District has improved overall since the last Beige Book, although the pace has softened.
  • Cleveland: Business activity in the Fourth District continued to expand at a modest pace since our last report.
  • Richmond: Economic activity has been sending increasingly mixed signals since our last report.
  • Atlanta: Sixth District business contacts reported that economic activity moderated somewhat in April and May.
  • Chicago: Economic activity in the Seventh District expanded more slowly in April and May.
  • St. Louis: The economy of the Eighth District has continued to expand at a moderate pace since our previous report.
  • Minneapolis: Economic activity in the Ninth District grew steadily since the last report.
  • Kansas City: Growth in the Tenth District economy remained solid in May.
  • Dallas: The Eleventh District economy expanded at an accelerated pace over the past six weeks.
  • San Francisco: Twelfth District economic activity continued to expand at a moderate pace during the reporting period of late April through the end of May.

While the Beige Book is an important instrument in reviewing recent economic developments across Reserve Banks, it's important to understand the context of the individual Bank reports. (By context, I mean the broader picture of economic performance across regions.)

One way to do that is to look at overall economic activity in each region, and the Philadelphia Fed's State coincident indexes is a useful tool to do just that. The Philadelphia Fed produces monthly coincident indexes for each of the 50 states that combine four state-level indicators to summarize current economic conditions in a single statistic. The four state-level variables in each coincident index are nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state's index is set to the trend of its gross domestic product (GDP), so long-term growth in the state's index matches long-term growth in its GDP.

In the chart below I use the state indexes to ascertain the depth of the downturn and the extent of recovery experienced by each Federal Reserve District. I weighed each state's coincident index by average state GDP from 2006–10 to develop a coincident index for each Reserve Bank. (A technical note: Most Federal Reserve Districts cut across state boundaries. In these instances I estimate the portion of state GDP that falls within Reserve Bank Districts that share the state in question. It's a back-of-the-envelope calculation. I could look at metro area GDP to be more precise, but for the purposes of this exercise I'm comfortable with this more basic approach. In other words, I didn't have time to do it, but I'm pretty confident that the results would be similar).

In chart 1, I calculate the percent change from peak-to-trough and trough-to-present for each Reserve Bank's coincident indicator. The red bar represents that peak-to-trough percent change—another way to look at it is that the red bars represent the depth of the recession experienced by each Reserve District. The blue bar is the percent change since the trough—or the extent of recovery.

Coincident Economic Activity

The Atlanta Federal Reserve District experienced at 10.8 percent decline in its coincident indicator during the downturn and has seen a 1.9 percent increase since the trough. The Chicago Fed's measure fell by more than Atlanta's but has come back handsomely since the trough. (Bill Testa of the Chicago Fed wrote about the Seventh District's resurgence in a recent blog post.) You can see the other Reserve Banks' measures in the chart as well.

Chart 2 combines the two percent changes presented in chart 1:

Coincident Economic Activity Net Percentage Change

The Atlanta Fed's measure is by far the weakest. Dallas and Boston are close to zero, indicating that their respective coincident indicators are close to where they were before the downturn began. So when you read that the Atlanta Fed reported in its Beige Book that "business contacts reported that economic activity moderated somewhat," it is particularly troubling. We have a long way to go, and any pause simply makes the time it will take to get back to where we were even longer.

Photo of Michael Chriszt By Mike Chriszt, an assistant vice president in the Atlanta Fed's research department

June 15, 2011 in Beige Book, Growth, Recovery | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference Beige Book: Only part of the story:


Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in


Coming to grips

As we gather more information on last week's tornado outbreak, it's becoming clear that it was the worst such event in U.S. history. Here's a map from the National Weather Service that shows preliminary tracks of the largest tornadoes that hit the region:

Preliminary Tornado Tracks - Wednesday, April 27, 2011
Enlarge Enlarge

From a macroeconomic standpoint, our job is to analyze the potential impact on overall economic activity. We continue to do this by talking to our business contacts in the larger affected areas such as Tuscaloosa, Birmingham, and Huntsville. As we noted in our previous post, we anticipate that disruptions of the April 27 tornado outbreak will be temporary and do not pose a threat to the broader economic recovery under way in the region. Power is being restored, and the cleanup is under way. We expect that disruptions to production, transportation, and general business activity to be short-lived in most areas. Neighborhoods where the devastation was significant will, of course, take longer to recover.

So we think we have a pretty good handle on how this event will play out on a macroeconomic scale: short-term losses will be largely offset by longer-term recovery and rebuilding activity, a pattern that tends to apply to natural disasters' impact on overall economic activity.

What I don't have a handle on—and can never hope to come to grips with—is the human cost. I didn’t lose any family or friends. My home was not damaged. In most ways April 27 was just another day for me. But something is different.

My wife told me about a story she heard on NPR about how Hackleburg, a small town in northwest Alabama, was practically wiped out, and how residents there are coping. (See the follow-up NPR story on the town and a video shot from a helicopter surveying the damage.) Hackleburg is one of dozens of small towns that face an arduous path to recovery. I have not really thought about that aspect until I read the story. I still don't know how to think about their plight.

Then I saw something that brought April 27 more into focus for me. I came across an aerial photograph of the track of the Tuscaloosa tornado. I noticed it passed within blocks of the apartment complex where my daughter lived when she was in school there. I can only imagine what people are going through. I don't have a clue how the people of Hackleburg will manage.

It had always been a dream of mine to go storm chasing—to maybe take my sons on what I pictured to be an adventure of sorts. I wanted to take pictures of a tornado, see it up close. Not anymore. I never want to see a tornado. Ever.

Photo of Michael ChrisztBy Mike Chriszt, an assistant vice president in the Atlanta Fed's research department

May 4, 2011 in Alabama, Recovery | Permalink


TrackBack URL for this entry:

Listed below are links to blogs that reference Coming to grips:


Post a comment

Comments are moderated and will not appear until the moderator has approved them.

If you have a TypeKey or TypePad account, please Sign in

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