The latest Data Digest release paints a mixed picture of the Southeast economy in July. Compiled monthly by the Atlanta Fed's Regional Economic Information Network (REIN), the report includes state-level data on the region's key economic sectors.
Economic activity in the Southeast continues to lag that of the nation, as measured by the Philadelphia Fed's coincident indicator. The index reading increased for Florida and Georgia in July, but the remaining states had flat or slightly lower readings.
The region's labor markets are also lagging. Total employment, while stable, is recovering slowly. Meanwhile, the unemployment rate for much of the Southeast, with the exception of Alabama and Louisiana, is higher than the national rate of 8.3 percent. However, another indicator of labor market performance—initial claims for unemployment insurance—is showing signs of improvement. Initial claims have declined throughout much of the Southeast in the past month and have even settled near prerecession levels in Tennessee. This figure remains elevated compared to prerecession levels for the remaining southeastern states, however.
The Digest also pointed to the recent decline in manufacturing activity. Indeed, according to the Southeastern Purchasing Managers Index (PMI), it decreased 2.8 points in July. With an index reading of 48.5, the region's manufacturing activity is in contracting territory (defined by an index reading below 50).
On a brighter note, Atlanta Fed contacts in the residential real estate and construction sectors continued to report improving conditions. Southeastern homebuilders and residential brokers reported that July sales were ahead of year-earlier levels. Most also indicated that inventories had declined from year-ago levels and that home prices had risen during the same period. Both groups reported a positive outlook for sales in the next several months.
For more state-by-state data and analysis on the southeastern economy, check out the full Data Digest.