The inaugural edition of the Momentum West Economic Dashboard releasec

The UW- River Falls Center for Economic Research (CER) in partnership with Momentum West has released the inaugural edition of the Momentum West Economic Dashboard. The dashboard is a snapshot of the economic condition of the labor, consumer and housing markets in the ten county Momentum West Economic Development Region. It presents the latest available data* in one convenient package and can be viewed on the CER's website at www.uwrf.edu/cer. The dashboard will be released on a monthly on about the third Friday of every month.

Download the latest dashboard

Overall indicators suggest continued, albeit slow, economic recovery in ten county Momentum West region. The unemployment rate decreased at both the state and regional and the state levels.  The regional unemployment rate dipped to 7.2% in April ‘11, which is 0.1 percentage points below the state unemployment rate. The decrease in the unemployment rate has been driven by a general upward trend over the last 3 months in both total employment and the labor force. Increases in both total employment and labor force are significant sings of improvement in the labor market.

The housing market is also sowing some signs of improvement. While the median home price for the region is significantly lower in May ’11 than one year previous (the median home price is down 27%), the median price has increased in both April and May. It still looks to be some time before home prices reach the 2010 level.

For additional information on the June edition of the Momentum West Economic Dashboard, contact Dr. Logan Kelly at cer@uwrf.edu or (715) 425-4993 or Noel Eggebraaten at neggebraaten@cvtc.edu  or (715) 874-4683.

*Please note that most regional data is available with between a one and two month delay, thus the current month's dashboard will have data from previous months.

May sees largest increase in core inflation since July 2008

by Paul Dalbec and Logan Kelly

The seasonally adjusted annually rate of inflation for all consumer goods and services, as measured by the Consumer Price Index, increased by 0.3 percentage points in May ’11 to 3.4%.  This increase in the inflation can is attributed to increases in all items besides energy.

Large decreases in the prices of energy can be seen as the total energy prices decreased by one percentage point for May.  Gasoline prices especially contributed to this decrease, they decreased by 2.0 percentage points in May. The decrease in gasoline prices comes as a surprise after overall consumer prices for gasoline have risen by 23.7 percentage points in the six months prior to May.  Other energy prices that decreased were the price of energy commodities by 1.9 percentage points, fuel oil by 0.8 percentage points, and utility gas service by 0.3 percentage points, all for the month of May  The only energy prices that increased in May were electricity by 0.8 percentage points and energy services by 0.6 percentage points.

Core inflation, measured as the overall consumer price index minus food and energy, is another important price index, because it is what the Federal Reserve looks at when deciding monetary policy.  Core inflation tends to be a better judge of what economist call persistent inflation.  The Federal Reserve’s interest in persistent inflation is that monetary policy can be used to affect it, as opposed to the more volatile energy and food prices.  Energy and food prices are more volatile and less affected by monetary policy, because they may greatly vary due to weather, overseas wars, etc.  

Core inflation increase by 0.3 percentage points in May to 1.5 percent, which is the largest increase since July 2008.  The Increase in core inflation can be seen across nearly all categories.  In particular, the cost of medical care, shelter and new vehicles all increased. The only decreases were in airline fares, tobacco, and personal care goods. 

Core inflation for the overall year is still lower than the Federal Reserves unofficial target of 2 percent, so the increase maybe a sign continuing economic recovery. On the other hand, both core and headline inflation has been increasing steadily since December. The upward trend in inflation suggests that the Federal Reserve may soon need to begin to tighten monetary policy. Inflation, however, is not yet a serious concern, so it is doubtful the Federal Reserve will react to the May numbers.

June St. Croix Valley Dashboard Released

The UW- River Falls Center for Economic Research (CER) in partnership with St. Croix Economic Development Corporation (SCEDC) has released the June 2011 edition of the St. Croix Valley Economic Dashboard. The dashboard is a snapshot of the economic condition of the labor, consumer and housing markets in the three county St. Croix Valley. It presents the latest available data* in one convenient package and can be viewed on the CER's website at www.uwrf.edu/cer.

The economic recovery seems to be an example of two steps forward, one step back. National labor market recovery had a set back in May ‘11. The national economy created only 54,000 net new jobs in May ’11,  and as a result, unemployment edged up by 0.5 percentage point to 9.1%.  While the private sector created 83,000 new jobs, 29,000 public sector jobs were lost. This highlights the economic challenges presented at national, state and regional levels by the current fiscal situation.

At the state level in Wisconsin, April ’11 unemployment rate was 7.3% down 0.1 percentage points from March ’11 and 1.5 percentage points from April ’10. It will be interesting to see if May data reflects a continuation of the recovery we have seen over the last three month, or if slowdown in job creation seen on the national level will also be observed in Wisconsin.  

The unemployment rate in the St. Croix Valley continues to be below the average unemployment rate in the state. April ’11 unemployment rate is 7.1 percent, which is down 1.52 percentage points from April ’10. The decrease resulted from an increase in employment (encouraging) and a decrease in the labor force (not so encouraging).

Spending in the Valley, as measured by sales tax revenue, increased in May ’11 by 22.3% from May ’10, and new vehicle registrations in April ’11 increased by 42.9% from April ’10. Both of these metrics indicate continued economic growth despite a stubbornly slow labor market recovery and a declining housing market.

Wisconsin's St. Croix Valley is comprised of St. Croix, Polk, and Pierce counties. All three counties are located along the Wisconsin-Minnesota border. Two of the three counties, St. Croix and Pierce, are included in the Minneapolis-St. Paul-Bloomington MN-WI metropolitan area, a 13-county region with of population of 3.25 million residents. For additional information on the June edition of the St. Croix Valley Economic Dashboard, contact Dr. Logan Kelly at cer@uwrf.edu or (715) 425-4993 or William Rubin at bill@stcroixedc.com or (715) 381-4383.

*Please note that most regional data is available with between a one and two month delay, thus the current month's dashboard will have data from previous months.