spidey
09-17-2007, 07:12 AM
[quote]
September 17, 2007
Storm clouds brewing?
By Mark Basch,
The Times-Union
The forecast for Jacksonville, economically speaking, has been pretty sunny for the past couple of years. But in the past few months, some clouds have been forming on the horizon.
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The unemployment rate for the Jacksonville area reached a two-year high in July, and a slump in the housing market has helped send local stock prices down. And after several years of relatively nonexistent inflation, rising gasoline and other prices have caused a jump in the local inflation rate.
So are we headed for a slowdown?
"The clearest thing is the economy is changing gears from a rapid pace to a slowing," said John Godfrey, chief economist at Florida Economic Associates in Jacksonville.
Not all the indicators are negative. While the unemployment rate has risen this summer, Jacksonville has kept adding jobs. In the 12 months through July, Jacksonville-area companies added 15,100 employees to their payrolls, a 2.4 percent growth rate, according to the Florida Agency for Workforce Innovation.
"That's certainly a positive thing and is certainly suggestive of continued forward momentum," Godfrey said, "just not as much as we've seen in the past."
According to employment firm Manpower Inc., Jacksonville should continue to increase jobs in the fall. Its quarterly survey of area employers showed that 13 percent plan to hire more workers between October and December; 7 percent plan cutbacks.
But University of North Florida economist Paul Mason is concerned that the economic indicators are pointing to tougher times ahead.
"I'm not real optimistic," said Mason, who runs UNF's Local Economic Indicators Project. "I'm afraid we're going to see a series of layoffs."
UNEMPLOYMENT ON RISE
3.9% -- The seasonally-adjusted unemployment rate for the Jacksonville area in July. It is the highest in two years. The rate was 3.1 percent from March through May.
Relatively speaking, the Jacksonville-area job market is in decent shape right now. The number of jobs continues to grow, as well as the number of online help-wanted ads, according to data compiled by the Conference Board, a New York research organization.
Still, the jump in the unemployment rate over the past couple of months does grab your attention.
"I don't think it's a very good feeling when indicators like unemployment start going up," said Tyra Tutor, senior vice president of corporate development for Jacksonville-based MPS Group Inc., which provides employment and consulting services for businesses.
But she said it's difficult to assess the employment outlook during the summer months, because so many people are on vacation. Activity after Labor Day will be a better gauge, as companies make more staffing plans.
"September will be a key indicator. Coming back from the holiday, everybody starts to get things done," Tutor said.
Unfortunately, the September unemployment data for Jacksonville won't be available until mid-October, so the job market outlook will continue to be cloudy for a while.
HOUSING MARKET WEAK
60% -- The decline in the value of residential building permits issued in Duval County from July 2006 ($167.2 million) to July 2007 ($66.3 million)
The weakening of the housing markets, illustrated by the decline in building permits, has ripple effects that go way beyond the buying and selling of homes.
"The current [economic] expansion was fueled to a great extent by the housing sector," said Asha Bangalore, economist at Northern Trust in Chicago.
"In this expansion, housing and housing-related employment made a very big contribution to payroll growth," she said.
Using national employment data, Bangalore found that the housing market added 788,300 jobs to U.S. payrolls from November 2001 through April 2005, or 40 percent of all jobs created in the U.S. Those jobs came not only from the construction sector but also from industries such as mortgage banking and furniture, which get more activity as more homes are sold.
But the downturn in the housing industry in the past year has caused a loss of 119,400 jobs, Bangalore said. A good example of that is Jacksonville-based title insurance company Fidelity National Financial Inc., which said in July that it has cut more than 6,000 jobs since 2003 as demand for its title services lessened.
STOCK INDEX SLIPS
-5.6% -- The decline in the Bloomberg Jacksonville stock index for the first eight months of 2007. The index has risen every year except one (2002) since its creation in 1995.
Since the Bloomberg Jacksonville stock index was created in 1995 by The Times-Union and Bloomberg News, the index of local company stocks has outperformed the overall market fairly consistently. But this year, the local index, which is laden with financial companies hurt by the mortgage fallout, has performed worse than the major national stock indexes.
Stock prices are not always the best indicator of economic activity: The rise and fall of the market is often based on perception, rather than on the reality of the individual companies' financial performance.
But the volatility of the stock market does have one direct impact on the economy - it makes consumers nervous.
"When there is a big drop in the stock market, it registers immediately," said Chris McCarty, director of the University of Florida's Survey Research Center, which compiles a monthly index on Floridians' consumer confidence.
But McCarty said the movement of the stock market has a bigger impact on the confidence of middle- and upper-income households, which are more likely to be invested in stocks. Lower-income households are more likely to get uneasy about rising gasoline prices.
INFLATION INCREASING
2.8% -- The annualized inflation rate for the Jacksonville area for the first seven months of the year.
Skyrocketing gasoline prices earlier this year grabbed headlines and pushed inflation rates sharply higher. But it's not just gasoline that's hitting consumers in the wallet.
"A lot of things have increased in the last few months that we're not used to seeing," said Paul Mason, whose Local Economic Indicators (LEIP) project has been compiling a consumer price index for the Jacksonville area since 2002.
Mason said the other price increases haven't been "horrendous" but have affected a broad range of consumer items, including bread and milk, food away from home, women's apparel and automobiles.
LEIP's index has shown the annual inflation rate for the Jacksonville area has been below 1 percent every year except 2005, when it rose 1.9 percent. So the 2.8 percent inflation rate so far this year is quite a jump.
INDICATORS POINT DOWN
-.22 -- The July decline in the Index of Leading Economic Indicators for the Jacksonville area. It was the third straight drop for the index, which is designed to forecast economic activity in the months ahead.
The University of North Florida's Local Economic Indicators project compiles an index of leading economic indicators for the Jacksonville area, designed to forecast economic activity several months ahead.
With the index of leading economic indicators declining for three straight months and four of the last five, you can understand why UNF economist Paul Mason is expecting a slowdown in the Jacksonville economy.
"I'm becoming a bit pessimistic about what's going to happen," he said.
But John Godfrey, chief economist at Florida Economic Associates in Jacksonville, said he believes that even if the local economy does slow down, it will still be in good shape.
"Is the glass half-full or half-empty?" Godfrey asks. "I would say it's at least three-quarters of the way full and it might be as much as 90 percent full," he said. [quote]
http://www.jacksonville.com/tu-online/stories/091707/bus_199680505.shtml
September 17, 2007
Storm clouds brewing?
By Mark Basch,
The Times-Union
The forecast for Jacksonville, economically speaking, has been pretty sunny for the past couple of years. But in the past few months, some clouds have been forming on the horizon.
--------------------------------------------------
--------------------------------------------------
The unemployment rate for the Jacksonville area reached a two-year high in July, and a slump in the housing market has helped send local stock prices down. And after several years of relatively nonexistent inflation, rising gasoline and other prices have caused a jump in the local inflation rate.
So are we headed for a slowdown?
"The clearest thing is the economy is changing gears from a rapid pace to a slowing," said John Godfrey, chief economist at Florida Economic Associates in Jacksonville.
Not all the indicators are negative. While the unemployment rate has risen this summer, Jacksonville has kept adding jobs. In the 12 months through July, Jacksonville-area companies added 15,100 employees to their payrolls, a 2.4 percent growth rate, according to the Florida Agency for Workforce Innovation.
"That's certainly a positive thing and is certainly suggestive of continued forward momentum," Godfrey said, "just not as much as we've seen in the past."
According to employment firm Manpower Inc., Jacksonville should continue to increase jobs in the fall. Its quarterly survey of area employers showed that 13 percent plan to hire more workers between October and December; 7 percent plan cutbacks.
But University of North Florida economist Paul Mason is concerned that the economic indicators are pointing to tougher times ahead.
"I'm not real optimistic," said Mason, who runs UNF's Local Economic Indicators Project. "I'm afraid we're going to see a series of layoffs."
UNEMPLOYMENT ON RISE
3.9% -- The seasonally-adjusted unemployment rate for the Jacksonville area in July. It is the highest in two years. The rate was 3.1 percent from March through May.
Relatively speaking, the Jacksonville-area job market is in decent shape right now. The number of jobs continues to grow, as well as the number of online help-wanted ads, according to data compiled by the Conference Board, a New York research organization.
Still, the jump in the unemployment rate over the past couple of months does grab your attention.
"I don't think it's a very good feeling when indicators like unemployment start going up," said Tyra Tutor, senior vice president of corporate development for Jacksonville-based MPS Group Inc., which provides employment and consulting services for businesses.
But she said it's difficult to assess the employment outlook during the summer months, because so many people are on vacation. Activity after Labor Day will be a better gauge, as companies make more staffing plans.
"September will be a key indicator. Coming back from the holiday, everybody starts to get things done," Tutor said.
Unfortunately, the September unemployment data for Jacksonville won't be available until mid-October, so the job market outlook will continue to be cloudy for a while.
HOUSING MARKET WEAK
60% -- The decline in the value of residential building permits issued in Duval County from July 2006 ($167.2 million) to July 2007 ($66.3 million)
The weakening of the housing markets, illustrated by the decline in building permits, has ripple effects that go way beyond the buying and selling of homes.
"The current [economic] expansion was fueled to a great extent by the housing sector," said Asha Bangalore, economist at Northern Trust in Chicago.
"In this expansion, housing and housing-related employment made a very big contribution to payroll growth," she said.
Using national employment data, Bangalore found that the housing market added 788,300 jobs to U.S. payrolls from November 2001 through April 2005, or 40 percent of all jobs created in the U.S. Those jobs came not only from the construction sector but also from industries such as mortgage banking and furniture, which get more activity as more homes are sold.
But the downturn in the housing industry in the past year has caused a loss of 119,400 jobs, Bangalore said. A good example of that is Jacksonville-based title insurance company Fidelity National Financial Inc., which said in July that it has cut more than 6,000 jobs since 2003 as demand for its title services lessened.
STOCK INDEX SLIPS
-5.6% -- The decline in the Bloomberg Jacksonville stock index for the first eight months of 2007. The index has risen every year except one (2002) since its creation in 1995.
Since the Bloomberg Jacksonville stock index was created in 1995 by The Times-Union and Bloomberg News, the index of local company stocks has outperformed the overall market fairly consistently. But this year, the local index, which is laden with financial companies hurt by the mortgage fallout, has performed worse than the major national stock indexes.
Stock prices are not always the best indicator of economic activity: The rise and fall of the market is often based on perception, rather than on the reality of the individual companies' financial performance.
But the volatility of the stock market does have one direct impact on the economy - it makes consumers nervous.
"When there is a big drop in the stock market, it registers immediately," said Chris McCarty, director of the University of Florida's Survey Research Center, which compiles a monthly index on Floridians' consumer confidence.
But McCarty said the movement of the stock market has a bigger impact on the confidence of middle- and upper-income households, which are more likely to be invested in stocks. Lower-income households are more likely to get uneasy about rising gasoline prices.
INFLATION INCREASING
2.8% -- The annualized inflation rate for the Jacksonville area for the first seven months of the year.
Skyrocketing gasoline prices earlier this year grabbed headlines and pushed inflation rates sharply higher. But it's not just gasoline that's hitting consumers in the wallet.
"A lot of things have increased in the last few months that we're not used to seeing," said Paul Mason, whose Local Economic Indicators (LEIP) project has been compiling a consumer price index for the Jacksonville area since 2002.
Mason said the other price increases haven't been "horrendous" but have affected a broad range of consumer items, including bread and milk, food away from home, women's apparel and automobiles.
LEIP's index has shown the annual inflation rate for the Jacksonville area has been below 1 percent every year except 2005, when it rose 1.9 percent. So the 2.8 percent inflation rate so far this year is quite a jump.
INDICATORS POINT DOWN
-.22 -- The July decline in the Index of Leading Economic Indicators for the Jacksonville area. It was the third straight drop for the index, which is designed to forecast economic activity in the months ahead.
The University of North Florida's Local Economic Indicators project compiles an index of leading economic indicators for the Jacksonville area, designed to forecast economic activity several months ahead.
With the index of leading economic indicators declining for three straight months and four of the last five, you can understand why UNF economist Paul Mason is expecting a slowdown in the Jacksonville economy.
"I'm becoming a bit pessimistic about what's going to happen," he said.
But John Godfrey, chief economist at Florida Economic Associates in Jacksonville, said he believes that even if the local economy does slow down, it will still be in good shape.
"Is the glass half-full or half-empty?" Godfrey asks. "I would say it's at least three-quarters of the way full and it might be as much as 90 percent full," he said. [quote]
http://www.jacksonville.com/tu-online/stories/091707/bus_199680505.shtml