St. Croix Valley Dashboard for October 2015 Released
The October 2015 edition of the St. Croix Valley Economic Dashboard has been released by the Center for Economic Research (CER) at UW-River Falls Center in partnership with St. Croix Economic Development Corporation. The Dashboard is a snapshot of economic conditions in labor, consumer, agricultural and housing markets for the seven county St. Croix Valley, which includes the Wisconsin counties of Polk, St. Croix, Pierce, and Dunn and the Minnesota counties of Chisago, Ramsey, and Washington. It presents the latest available data in one convenient package (Note: most regional data is available with a one or two month delay).
The 4-page Dashboard can be viewed at CER’s website, www.uwrf.edu/CenterforEconomicResearch (select: St. Croix Valley Dashboard). Viewers are reminded to scroll down to view all four pages.
Dr. Logan Kelly, director of CER, conducts research for the Dashboard and offered his observations:
The U.S. Economy
Inflation and Interest Rates
“Overall the economic outlook remains strong. The Philadelphia Fed’s Leading Index for the United States is forecasting 1.64% growth over the next six months.” (Note: The advance estimate for Q3 Real GDP growth is due to be released October 29).
“The Federal Reserve has responded to improving economic conditions by announcing that it is preparing to raise the federal Funds rate before the end of the year. Many think that this move is premature, given (1) There is currently no upward pressure on prices. Both the Employment Cost Index and the Producer Price index are down year over year. (2) Inflation expectations appear to be firmly anchored. Market measures of expected inflation indicate expectations of 1% to 2% inflation over the next year. (3) Global economic conditions are significantly less robust than that of the United States.”
“However, the Federal Reserve’s actions this year are likely to have only psychological effects. The rate increase will probably be to 0.25%, which is a very small change. Policy makers are likely more concerned with how long it will take to return the Federal Funds rate to a “normal” level than with inflation.”
Labor Market
“Nationally, the unemployment rate held at 5.1 percent and the total unemployment rate (7.9 million) changed little. Total nonfarm employment increased by a slightly disappointing 142,000 according to the Bureau of Labor Statistics Employment Situation Report. The number of persons unemployed for less than five weeks increased by 268,000 to 2.4 million in September, partially offsetting a decline in August. The number of long-term unemployed (i.e. those jobless for 27 weeks or more) was little changed at 2.1 million in September and accounted for 26.6 percent of the unemployed. Initial claims for unemployment at the end of September were 26,000 claims lower than they were at the same time in 2014.”
Wisconsin and Minnesota
Employment
“Total nonfarm employment in Wisconsin increased by 7,100 and total nonfarm employment in Minnesota increased by 7,300. In Wisconsin, all sectors but Mining and Logging; Manufacturing; Financial Activities; and other Services saw modest job growth with the most significant job gains occurring in Trade, Transportation and Utilities, and Leisure and Hospitality. This is the second increase in total nonfarm employment seen in Wisconsin since February. In Minnesota, the picture is more mixed with significant job losses in Manufacturing and Government, and significant gains in Financial Activities; Professional and Business Services; Education and Health Services; and Leisure and Hospitality. The Minneapolis-St. Paul-Bloomington MN-WI MSA gained 5,100 jobs. The unemployment rate in both states changed little, 4.5% in Wisconsin and 4.0% in Minnesota.”
Housing Market
“The Wisconsin Association of Realtors (WRA) reported that the number of existing home sales increased three percent in August compared to the same month last year, and the median price rose 2.9 percent to $161,500 over the same period.”
Excerpt from WRA’s August Home Sales Report: “June through August is always our busiest season, and 2015 has been an exceptional summer for Wisconsin home sales. A typical summer accounts for 32 percent of annual sales, and this year we were up 14 percent over last year – making summer 2015 the strongest summer volume since 2005 before the recession,” said K.C. Maurer, 2015-16 WRA board chairman.
“The Case-Shiller Home Price Index, which is a more accurate measure of overall home prices than is median home price, continued to show improvement. The home price index has exhibited consistently positive year over year change. Moreover, the number of homes listed for sale has declined while the average listing price has increased, indicating strong demand relative to supply.”
The St. Croix Valley
Regional Indicators:
“The regional labor market continues to be strong. Across the St. Croix Valley, unemployment rates fell in all counties. However, the decline in unemployment rates can be attributable to a larger decline in labor force and a smaller decline in employment. The unemployment rate in the region remains at or below the state average for all counties. The housing market continues to strengthen in a manner similar to the state markets with the usual after-summer slowdown. The median home listing price for the region increased by 1.04% and the number of homes listed in the region has decreased by 84.4% over the last year. The Case-Shiller Home Price Index continues to indicate increasing home prices both nationally and the Minneapolis-St. Paul-Bloomington MSA.”
About the St. Croix Valley
The Wisconsin-Minnesota St. Croix Valley is comprised of Polk, St. Croix, Pierce, and Dunn counties in Wisconsin and Chisago, Ramsey, and Washington counties in Minnesota. All seven counties are located at or near the Wisconsin-Minnesota border, along the St. Croix River, a federally protected waterway. Five of the seven counties (St. Croix, Pierce, Chisago, Ramsey, and Washington) are included in the Minneapolis-St. Paul-Bloomington MN-WI MSA, a 16-county region with a population approaching 3.5 million residents.
For additional information on the St. Croix Valley Economic Dashboard, contact Dr. Logan Kelly at cer@uwrf.edu or (715) 425-4993.
