Leading Economic Index Slips After Consumer Expectations and Permits Drop; Retail Sales and Tourism Lift Current Economic Index

Transcription

1 economic indicars division of economic analysis may v 10, n2 Leading Economic Index Slips After Consumer Expectations and Permits Drop; Retail Sales and Tourism Lift Current Economic Index in this issue leading index current index commentary The Gwinnett County Index of Leading Economic Indicars fell 2.1 percent in March as two of the four leading indicars posted weaker results during the month (Figure 1). For the twelve months ending in March 2011, the index is up 4.1 percent. As mentioned, two of the leading indicars deteriorated in March. Single Family Building Permits, one of the indicars weaken, dropped by almost 12 percent during the month and were down more than 27 percent from the same month a year ago on a seasonally adjusted basis. The Leading Index, which is designed forecast the county s economic performance 6 9 months in advance, has been above the 12-month moving average for the past five months. This is significant because if the index is consistently above or below this average the local economy is likely headed in one direction or the other 6 9 months down the road. The largest contribur the decline in the index, however, was consumer expectations (Figure 2). For the month, consumer expectations were down 14.6 percent and decreased 4.8 percent when compared March With the anticipation of inflation on the minds of consumers, and the persistence of a sluggish labor market, consumer attitudes about future economic conditions have soured Figure 1: Gwinnett County Leading Economic Index (1997 = 100) Leading Index Components: Mar month moving average Initial Unemployment Claims Down -13.7% Gwinnett Sck Index Up 3.4% Consumer Expectations Down -14.6% Single Family Building Permits Down -11.8% Leading Economic Index Down -2.1% Month Change Up 4.1% Gwinnett County Department of Planning and Development, Economic Analysis Division, 446 W Crogan Street, Suite 150, Lawrenceville, GA

2 current index ,000 5,000 4,000 3,000 2,000 1,000 Initial claims for unemployment improved during the month of March. In fact, March was the first month since July 2008 post initial claims below 3,000 on a seasonally adjusted basis. Compared the previous month, initial claims were down nearly 14 percent. While still high compared hisry, initial claims have fallen for eleven of the past twelve months on a year-over-year basis. The average number of initial claims is currently 14 percent lower than the 2010 average (Figure 3). 0 Figure 2: Consumer Expectations (South Atlantic, Seasonally Adjusted) Figure 3: Gwinnett County Initial Unemployment Claims (Seasonally Adjusted) 2 County economy, the index has been above its 12-month moving average for the past 2 months. As with the Leading Index, this is significant because if the index is consistently above or below this average, it is a signal that the economy is currently headed in one direction or the other (Figure 4) Sales tax receipts had the largest positive impact on the current index during the month of February. After a steep decline in January, due in large part the week of snow and ice, collections bounced back in February the tune of 13.8 percent on a seasonally adjusted basis. Adjusted for inflation and seasonal variation, collections were down a mere 0.6 percent from February Clearly, inflation is beginning pick up, and as it does, nominal collections will increase, but real growth will remain modest (Figure 5). $17,000,000 $15,000,000 $13,000,000 $11,000,000 Figure 4: Gwinnett Current Economic Index (1997 = 100) 12-month moving average Figure 5: Monthly Sales Tax Collections (Seasonally Adjusted Constant $'s) $9,000,000 Current Economic Indicars The Gwinnett County Index of Current Economic Indicars rose 2.6 percent in February as three of the four indicars strengthened. For the twelve months ending in February 2011, the Current Index is up 3.1 percent. Designed track the current state of the Gwinnett $7,000,000 $5,000, month moving average The urism/hospitality secr, as measured by the number of room nights logged in local hotels, continues be a bright spot in the local economy. At the conclusion of 2010, the three year descent in room nights was put an end as there

3 commentary 20% 15% 10% was an annual increase of 14.1 percent. This upward trend has seemingly carried over in currently the average number of room nights is up 8.6 percent. February posted a monthly increase of 10.3 percent on a seasonally adjusted basis. Ten of the past twelve months have posted double-digit rates of growth on a year-over-year basis (Figure 6). 5% 0% -5% -10% -15% Figure 6: Hotel/Motel Occupancy (Change in the Monthly Average Number of Room Nights) 8.8% 4.8% -7.2% -8.8% Commentary 0.7% 11.0% 5.3% 1.9% -4.3% -6.1% -10.3% 14.1% 8.6% Both economic indexes suggest that, after a long, slow, painful decline that brought record lows in several of the economic indicars we track, the local economy may finally be turning and heading in the right direction. Our biggest concern now both nationally and locally is inflation. After several years of Federal Funds rates near zero, and other more creative methods of monetary easing, inflation is starting creep in the economic picture. Actually, in some secrs, inflation is doing anything but creeping it is rushing in faster than a speeding bullet. The two most recognizable secrs of recent inflation are food and energy. According the U.S. Bureau of Labor Statistics (BLS), for the most recent month food prices are up 3.6 percent from a year ago on a seasonally adjusted basis, and that number appears be rising. However, according the BLS, mor fuel is up an asnishing 27.5 percent from the same period a year ago. Those prices are steadily eating in household budgets which, in many cases, are not seeing an equivalent rise in wages. In fact, for many people, wages are still frozen at recession levels. 3 The monetary policies of the Federal Reserve have led the markets a floccinaucinihilipilification of the U.S. dollar. For a while, this had a somewhat dilary effect on inflation as it was offset by asset price deflation. However, recent corrections aside, the rapid rise in various commodities including silver, gold, and oil are evidence enough that the market recognizes the threat of inflation as quite real. As mentioned earlier in this newsletter, going forward it will be important not confuse inflationary growth with real growth in the local economic indicars. Our indexes aumatically adjust for inflation, and as such, will represent real activity in the local economy. On a final note, Dr. Alfie Meek is stepping down from his position as Direcr of the Economic Analysis Division. He started this newsletter nearly nine years ago, and we appreciate his efforts make this information available the citizens of Gwinnett County. It is our intention continue publish this newsletter on a quarterly basis going forward, as well as continue using our social media on Twitter and Gwinnett Economics on Facebook provide Gwinnett citizens with insight in the local economy. ~ Alfie Meek, Ph.D. Direcr Economic Analysis Division Candice C. McKie Program Analyst Economic Analysis Division For the latest economic news concerning Gwinnett County, become a fan of Gwinnett Economics on Facebook or on Twitter

4 employment data 4 3rdQuarter 2nd Quarter 3rd Quarter Quarterly Y-Y Y-Y Growth Growth Jobs Goods Producing 39,443 38,146 38, % -1.7% (654) Agriculture, Forestry, & Fishing (11) % -6.4% (13) Mining (21) * * * * * * Construction (23) 16,893 15,949 16, % -4.6% (781) Manufacturing (31-33) 22,243 21,904 22, % 0.7% 145 Apparel Manufacturing (315) % 0.0% - Beverage & Tobacco Manufacturing (312) 12 * * * * * Chemical Manufacturing (325) 1,536 1,488 1, % -2.2% (34) Computer & Electronic Product Manufacturing (334) 5,010 5,185 5, % 8.1% 406 Electrical Equipment/Appliance (335) 1,631 1,037 1, % -33.4% (544) Fabricated Metal Manufacturing (332) 1,890 1,768 1, % -3.5% (66) Food Manufacturing (311) 1,614 1,701 1, % 6.6% 107 Furniture and Related Products Manufacturing (337) % -12.3% (100) Leather & Allied Product Manufacturing (316) * * * * * * Machinery Manufacturing (333) 1,449 1,446 1, % -0.1% (2) Miscellaneous Manufacturing Industries (339) 1,267 1,182 1, % -5.1% (65) Nonmetallic Mineral Product Manufacturing (327) 866 1,343 1, % 57.4% 497 Paper Manufacturing (322) % 1.0% 9 Petroleum and Coal Products Manufacturing (324) % -2.4% * Plastics & Rubber Products Manufacturing (326) 1,133 1,125 1, % -0.9% (10) Primary Metal Manufacturing (331) % 2.8% 4 Printing and Related Activities (323) 2,372 2,176 2, % -7.9% (187) Textile Mills (313) % -5.3% (3) Textile Product Mills (314) % 8.1% * Transportation Equipment (336) % 19.2% 92 Wood Product Manufacturing (321) % 4.4% 19 Service Producing 219, , , % 1.4% 3,176 Utilities (22) % -5.8% (30) Wholesale Trade (42) 28,650 28,326 28, % 0.0% 3 Retail Trade (44-45) 43,358 42,285 42, % -1.9% (838) Transportation and Warehousing (48-49) 5,279 5,892 5, % 11.8% 623 Information (51) 8,620 8,688 8, % -1.0% (85) Finance and Insurance (52) 14,899 14,239 14, % -4.3% (645) Real Estate and Rental and Leasing (53) 4,932 5,675 5, % 12.4% 613 Professional, Scientific/Technical Services (54) 22,141 22,590 22, % 1.2% 276 Management: Companies/Enterprises (55) 5,681 6,079 6, % 7.1% 405 Administrative, Support, and Waste Mgt. Services (56) 25,029 26,913 27, % 9.5% 2,388 Educational Services (61) 3,184 3,289 3, % 1.2% 39 Health Care and Social Services (62) 22,270 22,721 22, % 2.5% 563 Arts, Entertainment, and Recreation (71) 2,682 2,537 2, % -5.2% (139) Accommodation and Food Services (72) 24,570 24,635 24, % 0.9% 228 Other Services (81) 7,749 7,496 7, % -2.9% (226) Unclassified (industry not assigned) % 67.0% 377 Total Private Employment 259, , , % 1.1% 2,899 Federal 2,891 3,012 2, % -5.3% (152) State 2,561 2,561 2, % 6.1% 157 Local 28,863 29,815 28, % -0.6% (168) Total Government Employment 34,315 35,388 34, % -0.5% (163) TOTAL GWINNETT EMPLOYMENT (JOBS) 293, , , % 0.9% 2,735 * Denotes confidential data relating individual employers which cannot be released. Totals may not add due rounding. Source: Georgia Department of Labor. Data represent jobs in Gwinnett covered by unemployment insurance legislation.

5 index data 5 Gwinnett County, Georgia Business Cycle Indicars April, 2011 Gwinnett County Economic Indices: Mar 11 Feb 11 Jan 11 Dec 10 Nov 10 Leading Economic Index (1997 = 100) Current Economic Index ( 1997 = 100) Lagging Economic Index (1997 = 100) Feb 11 Mar 10 Gwinnett County Leading Economic Index Mar 11 Feb 11 Mar 10 Mar 11 Mar 11 Leading Economic Index (1997=100) % 4.1% Components: Initial Unemployment Claims (Seasonally Adjusted) 2,991 3,467 4, % 25.3% Initial Unemployment Claims (Unadjusted) 3,194 3,552 4, % 25.7% Bloomberg Gwinnett Sck Index (12/31/97 = 100) % 9.4% South Atlantic Consumer Expectations (Seasonally Adjusted) % 4.8% New Single Family Building Permits (Seasonally Adjusted) % 27.4% New Single Family Building Permits (Unadjusted) % 29.9% Jan 11 Feb 10 Gwinnett County Current Economic Index * Feb 11 Jan 11 Feb 10 Feb 11 Feb 11 Current Economic Index (1997=100) % 3.1% Components: Sales Tax Receipts (Constant $'s; Ths., Seasonally Adj.) $10,912.6 $9,591.1 $10, % 0.6% Sales Tax Receipts (Current $'s, Ths., Unadjusted) $10,270.7 $9,873.4 $10, % 2.6% Household Employment (Seasonally Adjusted) 372, , , % 0.8% Household Employment (Unadjusted) 367, , , % 1.1% South Atlantic Consumer Confidence (Present Situation; Seasonally Adj.) % 5.6% Hotel/Motel Occupancy Room Nights (Ths., Seasonally Adj.) % 20.8% Hotel/Motel Occupancy Room Nights (Ths., Unadjusted) % 20.8% * (Data for the Current Index is one month behind due the lag in sales tax receipts) Jan 11 Feb 10 Gwinnett County Lagging Economic Index ** Feb 11 Jan 11 Feb 10 Feb 11 Feb 11 Lagging Economic Index (1997=100) % 0.1% Components: Average Duration of Unemployment Benefits (Weeks, Seasonally Adjusted) % 8.1% Average Duration of Unemployment Benefits (Weeks, Unadjusted) % 8.1% Prime Rate Charged by Banks % 0.0% Unemployment Rate (Seasonally Adjusted) 8.9% 9.3% 9.3% 0.4% 0.4% Unemployment Rate (Unadjusted) 9.2% 9.0% 9.6% 0.2% 0.4% Evictions (Seasonally Adjusted) 2,306 2,127 1, % 21.3% Evictions (Unadjusted) 1,917 2,331 1, % 21.1% ** (Advertised foreclosures have been replaced with the number of evictions as an indicar in the Lagging Index)

6 indicars 6 Top Employers in Gwinnett County Public Schools 20,421 2 Gwinnett County Government 4,817 3 Gwinnett Health Care System 4,120 4 Publix * 2,908 5 Wal-Mart 2,700 6 State of Georgia 2,215 7 Kroger * 2,084 8 United States Postal Service 2,068 9 Scientific-Atlanta, a Cisco Company 1, Fiserv (previously Check Free) 1, Primerica 1, NCR Corporation 1, Home Depot ** 1, Waffle House** 1, Emory Eastside Medical Center * 800 Source: Calls individual companies in March '11. NET TAXABLE DIGEST: $26.6 B 7% Residential Commercial 38% Mor Vehicle * Full-time equivalents (FTEs) Source: Gwinnett County Tax Assessor. ** Based on business license data Final Tax Digest 55% Indicars Total Employment (Jobs) 292, , , , , , ,291 - % change (2.6) (6.3) Unemployment Rate Total Personal Income ($Bil) % change Sales Tax Revenue ($Mil) Population 666, , , , , , , ,869 Single-Family Permits 7,915 8,199 8,337 6,616 3,526 1, Median Existing Home Price ($Ths) Mortgage Originations ($Mil) 12,894 8,015 8,660 8,477 7,037 5,249 6,129 4,295 Net Migration (000) Personal Bankruptcies 4,553 4,513 5,655 2,533 3,293 4,382 6,333 - Advertised Foreclosures 4,810 5,255 5,242 6,274 8,394 13,758 24,338 27,697 Source: Gwinnett County; GA Dept. of Labor; U.S. District Courts; Bureau of Economic Analysis; U.S. Census Bureau July 1 Preliminary Population Estimates; and Economy.com. Source for foreclosure data is Equity Depot.net ( and Gwinnett Daily Post HOUSING DISTRIBUTION (Number of Single Family including Townhomes and Condos) Above $750,000 $500,001 - $750, PER CAPITA INCOME $39,635 $37,101 $32,381 $34,129 $350,001 - $500,000 $200,001 - $350, <$200, GWN ATL GA US Source: Gwinnett County Tax Assessor; Data for Source: Bureau of Economic Analysis, Gwinnett County Department of Planning and Development, Economic Analysis Division, 446 W Crogan Street, Suite 150, Lawrenceville, GA Although the information in this report has been obtained from sources that we believe be reliable, we do not guarantee its accuracy, and such information may be incomplete or condensed.