Data Digest: Louisiana October 2011

Broad indicators of economic activity in Louisiana and the United States show slow but steady gains. About the Coincident Economic Indicator

Coincident Economic Indicator

Jan 2001 = 100

August 2011

120

115

110

105

100

95 United States Louisiana 90

85 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Source: Federal Reserve Bank of Philadelphia

2

Total employment in Louisiana is up slightly from postrecession lows, as education and health services and information continue to add jobs. The current level of employment is at mid2004 levels.

Louisiana Payroll Employment

Thousands, seasonally adjusted 2,000

August 2011

1,900

1,800

1,700

1,600

1,500 1990

1995

2000

2005

2010

Source: U.S. Bureau of Labor Statistics, Haver Analytics

3

All industries except education and health services saw significant job losses during the downturn. Some industries continue to show no gains in employment. The information sector lost the greatest percentage of jobs and has seen the highest growth since its trough.

Employment Loss and Gain by Industry: Louisiana August 2011

Local government Federal & state government

Educational & health services

0.0

-1.1

Percent change trough to present Percent change peak to trough

0.0

-7.9

Finance, insurance & real estate

26.5 1.3 4.2

-7.2

17.8

-21.9

Retail trade

0.8

-5.4

Wholesale trade

3.6

-10.4

Transportation/Utilities

7.4

-9.3

Manufacturing

5.2

-14.0

Construction

2.1

-11.8

Mining & logging

9.5

-12.2

Total -30.0

1.9

-7.5

Professional & business services

Information

1.1

-10.0

Other services Leisure & hospitality

0.0

-4.0

2.0

-3.6 -20.0

-10.0

0.0

10.0

20.0

30.0

Note: A reading of 0.0 in the “trough to present” measure indicates that employment continues to decline in these industries. Likewise, a reading of 0.0 in the “peak to trough” measure indicates that employment continues to increase in these industries. Much of the decline in federal government employment is related to the exit of census workers. Source: U.S. Bureau of Labor Statistics, Haver Analytics, Federal Reserve Bank of Atlanta

4

Wholesale trade, finance, insurance and real estate, and construction showed positive employment momentum, while local government, professional and business services, and federal and state government employment contracted further. About Employment Momentum

Employment Momentum by Industry: Louisiana 18

August 2011

Improving

14 3-month average annualized percent change

Expanding

Mining and logging

16

Wholesale trade

12

Finance, insurance, and real estate

10 8

Information

Manufacturing Education and health services

6

Construction Transportation/Utilities

Other services

4 Leisure and hospitality

2 0

Professional and business services

-2

Retail trade

-4 Local government

-6 -8 -10

Federal and state government

-12

Contracting

-14 -6

-4

Slipping -2

0

2 4 6 Year-over-year percent change

8

10

12

14

Source: U.S. Bureau of Labor Statistics, Haver Analytics, Federal Reserve Bank of Atlanta

5

Houma, Alexandria, Shreveport, and Lafayette have had employment increases of more than 3 percent since their troughs. New Orleans has regained most of the jobs it lost; Baton Rouge continues to shed jobs.

Employment Loss and Gain by Metro Area: Louisiana August 2011

3.8

Shreveport

-4.0 2.4

New Orleans

-2.5 0.8

Monroe

-6.0 Percent change trough to present Percent change peak to trough

Lafayette

3.4 -4.8 5.4

Houma

-7.6 0.0

Baton Rouge

-4.9 4.1

Alexandria

-6.8 2.0

Louisiana

-3.6 -20

-15

-10

-5

0

5

10

Note: A reading of 0.0 in the “trough to present” measure indicates that employment continues to decline in these metro areas. Likewise, a reading of 0.0 in the “peak to trough” measure indicates that employment continues to increase in these metro areas. Source: U.S. Bureau of Labor Statistics, Haver Analytics, Federal Reserve Bank of Atlanta

6

New Orleans, Shreveport, Lafayette, Houma, and Alexandria are showing positive employment momentum. Baton Rouge and Monroe remain weak. About Employment Momentum

Employment Momentum by Metro Area: Louisiana August 2011

8

Expanding

3-month average annualized percent change

Improving Alexandria

6 Lafayette

Houma

4 New Orleans

2 Shreveport

0 Monroe

-2 Baton Rouge

Slipping

Contracting

-4 -2

-1

0

1 2 Year-over-year percent change

3

4

5

Source: U.S. Bureau of Labor Statistics, Haver Analytics, Federal Reserve Bank of Atlanta

7

November 2010 marked the first month since December 2008 that Louisiana’s employment momentum was in the “expanding” quadrant. After slipping in March 2011, Louisiana’s employment momentum moved back into the “expanding” quadrant in April. About Employment Momentum Track

Employment Momentum Track: Louisiana January 2007–August 2011

3-month average percent change, annualized

6

Improving

Expanding

4

2

0

-2

-4

Slipping

Contracting

-6 -4

-3

-2

-1

0

1

2

3

4

5

6

Year-over-year percent change Source: U.S. Bureau of Labor Statistics, Haver Analytics, Federal Reserve Bank of Atlanta

8

Since recovering from the effects of Hurricane Katrina in late 2005, Louisiana’s unemployment rate has been below the U.S. rate.

Percent of labor force 12

Unemployment Rate August 2011

Hurricane Katrina 11 10 9 8

Louisiana United States

7 6 5

The table shows unemployment rates for metro areas. Current = August 2011. Year ago and Jan 2007 are included for comparison.

4 3 2005

2006

2007

2008

2009

2010

2011

Source: Bureau of Labor Statistics, Haver Analytics

9

Alternative measures of labor underutilization for Louisiana—namely, the U6 figure—show that nearly 14 percent of the state’s labor force is unemployed or underemployed. The U6 for Louisiana is increasing but remains below comparable U.S. measures. About Unemployment Rates

Percent, seasonally adjusted 20

Measures of Labor Utilization: Unemployment Rate and U6 Q2 2011 (Louisiana U6: Q1 2011)

United States: U6 United States: Unemployment rate Louisiana: U6 Louisiana: Unemployment rate

15

10

5

0 2007

2008

2009

2010

2011

Note: U6=Unemployed + Marginally attached + Part-time economic reasons/Civilian labor force + Marginally attached. Louisiana U6 data are through first-quarter 2011. Source: U.S. Bureau of Labor Statistics, Haver Analytics

10

Initial claims for unemployment insurance in Louisiana have remained relatively flat since the state began its recovery from the effects of Hurricane Gustav in late 2008.

4-week moving average 12,500

Initial Unemployment Insurance Claims: Louisiana September 10, 2011

Effects of Hurricane Gustav

10,000

7,500

Initial claims averaged just 2,600 per week during 2006-2007. The current number of initial claims remains elevated at more than 4,000.

5,000

2,500

0 2008

2009

2010

2011

Source: U.S Department of Labor–Employment and Training Administration, Haver Analytics

11

Sales tax revenue has recovered from recession lows and is posting year-over-year increases, but the pace has slowed in recent months.

Year-to-year change, 3-month moving average 40

Louisiana Sales Tax Revenue August 2011

30

20

10

0

-10

-20

-30 2005

2006

2007

2008

2009

2010

2011

Source: Louisiana Department of Revenue, Federal Reserve Bank of Atlanta

12

Regional manufacturing activity accelerated in August, according to the Southeast Purchasing Managers Index produced by Kennesaw State University. Louisiana’s component fell slightly below the Southeast reading.

Southeast Purchasing Managers Index August 2011

70 65 60 55 50 45

The Louisiana component of the SE PMI was 56.9 in August 2011.

40 35 30 25 20 2007

2008

2009

2010

2011

Note: 50+ = Expansion Source: Kennesaw State University, Coles College of Business Econometric Center

13

Existing home sales have declined after showing improvement in late 2009 and early 2010.

Existing Home Sales

Year-over-year percent change 40

Q2 2011

30

20

10

0

-10

-20 United States Louisiana

-30

-40 2005

2006

2007

2008

Source: National Association of Realtors, Haver Analytics, Federal Reserve Bank of Atlanta

2009

2010

2011

14

New home construction remains near record lows in Louisiana and the United States as a whole.

New Residential Home Construction Permits

250,000

5,000

August 2011

225,000 200,000

4,000

175,000 150,000

3,000

125,000 100,000

2,000

75,000 United States (left scale) Lousiana (right scale)

50,000

1,000

25,000 0

0 2005

2006

2007

2008

2009

2010

2011

Source: U.S. Bureau of the Census, Haver Analytics

15

Home prices in Louisiana have increased over the past five years, while those in the United States have declined.

Federal Housing Finance Agency Home Price Index

Q1 1980 = 100 400

through Q2 2011

375 350 FHFA House Price Index: Q2 2011

325 300 275 250 225

1-yr % change

5-yr % change

10-yr % change

USA

-3.1

-11.8

31.1

Louisiana

-1.1

7.7

44.2

Baton Rouge

-2.0

11.4

42.1

New Orleans

-1.4

-1.2

41.2

Shreveport

-0.1

10.8

45.6

Alexandria

-1.2

12.4

38.3

Houma

0.6

20.4

60.4

Lafayette

-1.5

9.2

47.0

Monroe

0.0

9.5

33.6

200 United States Louisiana

175 150 2005

2006

2007

2008

Source: Federal Housing Finance Agency, Haver Analytics

2009

2010

2011

Source: Federal Housing Finance Agency, Haver Analytics, Federal Reserve Bank of Atlanta

16

Import activity through the New Orleans District ports has rebounded from the downturn in early 2009. Exports through New Orleans District ports slowed a bit during the second quarter.

Port Activity

$ thousands

Q2 2011

45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 New Orleans District, imports New Orleans District, exports

5,000,000 0 2005

2006

2007

2008

2009

2010

2011

Source: U.S. Bureau of the Census, Haver Analytics

17

For additional sources of information, see our Local Economic Analysis Research Network membership at www.frbatlanta.org/rein/learn/map/learn_members.cfm. 18