July Momentum West Dashboard Released

The UW- River Falls Center for Economic Research (CER) in partnership with Momentum West has released the July edition of the Momentum West Economic Dashboard. The dashboard is a snapshot of the economic condition of the labor and housing markets in the 10 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 Labor Market

The regional labor market showed a lackluster performance in May. The unemployment rate declined in May by 0.6 percentage points from one year previous to 6.8 percent. This change was driven by a 0.3 year over year percentage increase in total employment and 0.3 year over year percentage decrease in labor force. While the increase in employment, and resulting decline in the unemployment rate, are welcome, the decrease in the labor force is troubling. The region's unemployment rate is lower than the state average of 7.4 percent, but higher than the Minneapolis-St. Paul-Bloomington Metropolitan Statistical Area (MSA) unemployment rate of 6.3 percent.

Nationally, layoffs are picking up. Cisco Systems, Goldman Sachs Group and Lockheed-Martin have all announced significant layoffs, and the chain bookseller, Borders, announced it will be going out of business.  Indeed many companies, Nationwide Insurance is one example, are looking to cut costs. The data supports a similar conclusion that the short run risk of recession is growing and may, at present, outweigh long run concerns over the budget deficit. Total number of layoffs increased from April to May by 172,000 people. This is the largest monthly increase year to date.

Total Layoffs and Discharges

Moreover, the number of persons unemployed less than five weeks, which is often used as a proxy for total layoffs, has increased three of the last four months.

Number Unemployed Less then Five Weeks

Though the Wisconsin economy appears to be preforming slightly better than the national economy, the national picture certainly indicates that road to recovery may be less certain than we would like.

The Housing Market

The housing market may be showing some summer strengthening, but year over year comparisons still indicate a grim reality. The region saw another monthly increase in median home price and number of homes sold. While this is encouraging, nether median home price nor number of homes sold are seasonally adjusted, thus the recent strengthening may be merely the summer home buying market increase. However, the Case-Shiller Home Price index for Minneapolis did show its first positive year over year change in April since June '10.

Home prices in the region remain significantly lower than one year ago. The median home price for the ten-county region in June '11 was approximately $191,000, which is 23 percent bellow June '10.

For additional information on the July 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.

July 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 July 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.

Download the latest dashboard

The dashboard includes several new features this month. First, unemployment rate, total employment and labor force data has been added for both the St. Croix Valley region as a whole and the Minneapolis-St. Paul-Bloomington Metropolitan Statistical Area. The Minneapolis-St. Paul-Bloomington Metropolitan Statistical Area includes much of the three county St. Croix Valley and economic conditions in this MSA are an important indicator of current and future conditions in the St. Croix Valley. Second, the prices received by producers of the key agricultural commodities have been included. These prices are the average price received from the sale of corn, milk and soybeans to their first buyers.

The Labor Market

Conditions indicate continuing, slow recovery in the regional labor market. The unemployment rate declined in May by one percentage point from one-year-previous to 6.4 percent. This change was driven by a 0.4 year over year percentage increase in total employment and essentially unchanged labor force. The region's unemployment rate is lower than the state average of 7.4 percent and comparable to the Minneapolis-St. Paul-Bloomington Metropolitan Statistical Area (MSA) unemployment rate of 6.3 percent.

Nationally, the data indicates that the short run risk of recession is still persists and may at present outweigh long run concerns over the budget deficit. The economy added 18,000 jobs in June, which is statistically indistinguishable from zero. Moreover, job creation statistics for both April and May were both revised down. The change in total employment for April was revised from 232,000 jobs created to 217,000 jobs created, and the change for May was revised from 54,000 jobs created to 25,000 jobs created. The unemployment rate was likewise unchanged at 9.2 percent.

A significant driver of the national economy's inability to create new jobs has been the loss of public sector jobs. While the private sector created 57,000 jobs nationally in June, government employment fell by 39,000 jobs (Wisconsin has lost approximately 6,000 public sector jobs between May '11 and May '10).  This continues a trend of declining public sector employment spanning back to 2008, and the public sector remains the only major sector of the economy to continue to exhibit consistently falling employment.

Decreasing government payrolls is a serious challenge to the labor market recovery because one public sector job lost can lead to additional private sector job losses or inhibit the private sector from creating jobs. This phenomenon is known as the multiplier effect. Because public sector jobs are often higher skilled, higher paid jobs, their loss causes a significant loss in aggregate income and thus spending. This spending provides income to businesses producing a wide variety of goods and services, and the loss of that income can contributing to many businesses' reluctance to hire new workers.

The Housing Market

The housing market may be showing some summer strengthening, but year over year comparisons still indicate a grim reality. The region saw another monthly increase in median home price and number of homes sold. While this is encouraging, nether median home price nor the number of homes sold are seasonally adjusted, thus the recent strengthening may be merely the summer home buying market increase. However, the Case-Shiller Home Price index for Minneapolis did show its first positive year over year change in April since June '10.

Home prices in the St. Croix Valley remain significantly lower than one year ago. The median home price for the three county region in June '11 was approximately $132,000, which is nearly 15 percent bellow June '10.

Spending

Spending in the Valley, as measured by sales tax revenue, increased in June ’11 by 4.9% from June ’10, and new vehicle registrations in May ’11 increased by 13.4% from May ’10. Both of these metrics indicate continued economic growth despite a stubbornly slow labor market recovery and a tepid 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 July 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.