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The Atlanta Fed's SouthPoint offers commentary and observations on various aspects of the region's economy.

The blog's authors include staff from the Atlanta Fed's Regional Economic Information Network and Public Affairs Department.

Postings are weekly.


February 27, 2015

Through the Eyes of a Big Fan

When Janet Yellen was named chair of the Board of Governors of the Federal Reserve System in February 2014, she became the fourth chair in my 30-year career here at the Atlanta Fed's Jacksonville Branch. While I vaguely remember Chairman Paul Volcker once visiting the branch, I was so new to the Bank and pretty naïve as to what the Fed actually did that I don't think I paid much attention back then. Soon after was Chairman Alan Greenspan, a brilliant man who spoke of economic conditions in a manner admittedly a bit hard for me to understand, especially since my Fed career began in an area not focused primarily on studying the economy. Then along came Chairman Ben Bernanke! Finally, someone who spoke in terms that even I could grasp. Couple his arrival with the creation of the Regional Economic Information Network and my foray into the world of economics (and the need for me to pay closer attention), I became an instant fan! I watched with great interest as Chairman Bernanke and the Federal Open Market Committee dusted off many lesser-known tools (as well as unveiling some brand-new tools) in the Fed's toolbox to help stimulate the economy during and after the Great Recession.

So, imagine my thrill at finding out that Chairman Bernanke was going to be a keynote speaker at this year's National Retail Federation's (NRF) annual conference that I had the great fortune to attend! I was like, whoop whoop! (I know, I'm just a big fan at heart!)

The morning of his appearance, I got up at zero-dark-thirty and was the first in line to enter the massive convention hall where he was scheduled to speak. I made a bee-line to the front and scoped out the best seat in the house. And I waited with anxious anticipation. I was like a teenage girl at her first rock concert when he took the stage. I listened intently as he and the president of Saks Fifth Avenue, who is serving as this year's NRF chairman, discussed the fallout from the global economic crisis and current prospects for the U.S. economy and the retail industry. It was amazing to listen to Bernanke speak in a much more casual manner (since now his comments do not necessarily move markets) about the events of the crisis and the actions taken by the Fed. (Remember, he is a scholar of the Great Depression of the 20th century and understood how the Fed could work to avoid the mistakes of the past.)

In addition to Chairman Bernanke sharing insights about the crisis with the audience, he commented on the transparency of the Federal Reserve System by saying, "In the middle of a crisis explaining where, why, and how we do what we do is as important as taking actions." When asked about the current state of the economy, Bernanke indicated that the U.S. economy is enjoying a genuine recovery. However, he has some concern regarding the European Union, noting that the situation should be watched carefully.

He was then asked what he missed most about being Fed chairman. He said that when he was chairman, he was driven everywhere by his security detail, so little things like traffic and finding parking spaces were never a concern. What he misses most, he said, "is not having to find my own parking spaces." He paused briefly and added, "That's all I miss."

How was I lucky enough to see Chairman Bernanke in person? As I mentioned, this was the NRF's annual conference, and one of my responsibilities as an analyst is to follow the retail sector and consumer behavior. So aside from my thrilling moment as a fan, what other insights did I glean at the conference? Well, when I attended the same conference two years ago, the underlying tone among participants was, "How do we get the consumer back to spending?" This year, the participants were upbeat and the focus seemed to be "We've got the consumer back, but how do we keep them back?" One answer was to create an engaging and exciting shopping experience.

Retailers must have been successful because revolving credit is up and consumer confidence is high. Let's take a look at our consumers and their behavior during the 2014 holiday shopping season.

Consumer credit outstanding rose $14.8 billion in December from $13.5 billion in November (see the chart). Nonrevolving credit, which is made up mostly of auto and student loans, rose $9.0 billion. However, the more noteworthy movement is that revolving credit rose a significant $5.8 billion in December from November's decline of $0.9 billion. In my opinion, this increase indicated the consumer was willing to take on debt previously avoided. Revolving credit, composed primarily of credit card loans, showed its strongest growth in eight months (the chart compares month-over-month data).

Change-in-consumer-credit

The Conference Board's survey on current conditions rose significantly to a seven-year high of 112.6 points in January from December's reading of 99.9. The University of Michigan's index rose to 109.3 points in January from 104.8 in December. The Conference Board's current conditions survey is based on the survey participants' view of current economic conditions as it relates to businesses and jobs, while the University of Michigan's survey is based on the individuals' sentiment as it relates to their personal households (see the chart).

Consumer-confidence-indices

The Conference Board's measure of expectations rose moderately to 96.4 points in January from 88.5 in December. The University of Michigan's index rose to 91.0 points in January from December's reading of 86.4. The expectations surveys by both entities are based on the same views of the survey participants as the current conditions surveys. However, the forward-looking expectations time frame differs. The Conference Board is looking six months out, and the University of Michigan is looking one to five years out (see the chart).

Consumer-confidence-indices-measuring-expectations

It appears, for now, that the consumer is increasingly upbeat, which is vital to the strength of the economy. Several District retail contacts recently reported double-digit growth and record-setting volume in 2014. Casual dining establishments saw an uptick in volume as consumers seem to be trading up from fast-food options.

Although total retail sales fell 0.8 percent in January from 0.9 percent in December, core retail sales—those excluding auto, gas, and building materials—rose 0.2 percent in January from December's decline to 0.1 percent, month over month. Retail sales maintained the same pace of growth for December and January rising 3.3 percent year over year (see the chart).

Retail-sale

Overall, the consumption sector looks reasonably vibrant. And as one of my industry contacts said, "Every day gets better." It appears that Chairman Bernanke isn't the only one enjoying his current situation.

Photo of Christine VietsBy Christine Viets, a Regional Economic Information Network analyst in the Jacksonville Branch of the Atlanta Fed

February 6, 2015

Florida's Economic Rebound Continues

During the last several months, business contacts in south Florida have been reporting improving economic conditions. They've discussed increased opportunities for capital expenditure projects, optimistic hiring plans, and a general upturn in business activity. This optimism made me wonder if the data on Florida's economic activity reflected what we've been hearing from our contacts in south Florida.

In November, coincident economic indicator, which measures overall economic activity, was 155.99 (see the chart). The index has been steadily improving since 2012. Although it has not yet reached its peak of 160.87 from February 2007, it seems to be within reach. While the November data for metro areas are not yet available, our South Florida business contacts recently indicated that the economy in south Florida continues to improve. Falling oil prices have not had a direct impact on businesses yet, though the general consensus is that oil's price decline is good for the consumer and consumer spending should improve if these lower prices are sustained.

chart-one

On the manufacturing front, the Southeast Purchasing Managers Index, which is produced by the Econometric Center at Kennesaw State University and measures regional manufacturing activity, declined to 54.1 in November (see the chart). However, with the exception of this past September, it has remained in expansionary territory since August 2012. (A reading above 50 indicates expansion in overall activity; a reading below 50 indicates a decline.)

chart-two

Regarding employment, payroll employment in Florida hit its trough in March 2007 and has been steadily increasing since then. In November, payroll employment in the state increased by 41,900 to 7.897 million employed, remaining slightly below the prerecession peak of 8.053 million (see the chart). South Florida business contacts, however, specifically report continued challenges in filling positions with specialized skills in technology, mathematics, engineering, management, and lending.

chart-three

While Florida's unemployment rate has a ways to go before reaching its prerecession low of 3.3 percent, it improved steadily from April 2012 through December 2013 and then plateaued at a little more than 6 percent for the first eight months of 2014 (see the chart). A downward trend in unemployment started in August of last year, reaching 5.8 percent in November. Anecdotally, we heard positive reports from contacts in the employment sector of an uptick in activity from employers using employment agencies to fill open positions.

chart-four

As you can see from the data above, overall economic activity continues to look promising in Florida, supporting the information we've been receiving from business contacts. Let's hope conditions remain accommodative and that our contacts continue to report good news.

By Marycela Diaz-Unzalu, a senior Regional Economic Information Network analyst at the Atlanta Fed's Miami Branch

December 30, 2014

New Orleans Area Optimistic Heading into 2015

During the last couple of months, the Regional Economic Information Network team from the New Orleans Branch of the Atlanta Fed was in contact with more than 30 business leaders to gauge sentiment about current and anticipated economic conditions in the region (which covers central and south Louisiana and Mississippi, south Alabama, and the Florida Panhandle to Apalachicola). The optimism and confidence that our contacts expressed over the last few quarters continued and was in fact more prevalent this time. Although contacts' expectations in previous months were for "slow and steady" growth, many business leaders now feel assured about their outlook for a pickup in growth in 2015.

In particular, we continue to receive upbeat reports about the tourism sector. This time, the message came from the Florida Panhandle again, where it was mentioned that tourism was growing into a year-round business, supported largely by an emergence of international travelers rather than the typical wintertime snowbirds. Retail contacts were also very positive, especially about holiday sales in November but also about a notable general sense of improving consumer sentiment. Another sign of strength in the region was commercial real estate, which was reported as robust across Louisiana, particularly for retail, multifamily, and office space leasing and development.

Employment and labor markets
Generally, contacts continued to report positive net hiring in response to increases in demand, though they didn't report acceleration from previous months. We continue to receive reports about firms' efforts to use automated solutions to reduce staffing or conduct optimization studies to enhance efficiency while reducing costs. Once again, contacts noted major challenges filling certain skilled positions, such as trades workers, engineers, truck drivers, and information technology professionals—a predicament business contacts have expressed for more than a year.

Costs, wages, and prices
For several months now, contacts have reported some cost pressures with little pricing power. In most cases, firms have been able to increase prices only after a competitor successfully does so or when contracts are up for renegotiation. Regarding the declining price of oil, energy industry representatives shared their view of the impact on their industry, which they indicated would initially affect smaller players (described in a recent SouthPoint post). In addition, a few contacts noted that declining energy prices posed a risk to their 2015 outlook. For the first time in many months, a number of contacts reported across-the-board wage pressures, which were previously isolated to certain positions. Others indicated they expect to encounter pressure in 2015. Several firms we spoke with indicated they expanded merit program budgets in 2015, with most increases being in the range of 2.5 to 3 percent, though a few in the range of 3 to 5 percent. Though a number of firms reported they were investigating strategies to control compensation costs with tools such as performance-based incentives, health care contributions, and targeted salary increases—a trend we've noted over the last couple of quarters.

Availability of credit and investment
Access to capital and availability of credit remained a nonissue for the majority of our contacts, though some small firms indicated obtaining credit from traditional banks remained difficult because of qualification requirements. Banking contacts indicated that loan demand strengthened in the third quarter. Capital investment reports were consistent with the last few cycles, reflecting some expansion activity but mostly focused on efficiency or maintenance.

Business outlook
Although some contacts noted a bit of uncertainty about the outlook—including the declining price of oil, increased government regulations, and the strengthening U.S. dollar—contacts were overall positive and confident about 2015 expectations. What's your outlook for 2015?

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Regional Economic Information Network at the New Orleans Branch of the Atlanta Fed

December 23, 2014

Florida's Job Report Shines Bright

On December 19 the U.S. Bureau of Labor Statistics published November 2014 state-level labor market data. This release followed the national report published on December 5, which revealed an impressive 321,000 jobs were added on net in November, while the unemployment rate held firm at 5.8 percent. The state-level data helps us determine how the Sixth District labor market compared with the national labor picture. On aggregate, Sixth District states appear to have fared well. The district contributed 49,500 jobs in November, 15 percent of the national figure. However, although the sum of jobs added in the Sixth District last month was the highest since April, losses in some states brought the aggregate number down a bit.

Florida becomes the region's top jobs contributor
One Sixth District state had a stellar month of job gains and an unemployment rate that declined to match the national rate. If you guessed the Sunshine State, you were correct. Florida was the top contributor of jobs in the district by far, with 41,900 jobs added on net (see the chart).

Contributions-to-change

Florida's job growth in November was the most the state has added in four and a half years, when it contributed 45,200 payrolls in May 2010. The November number reflects 85 percent of all jobs created in the district, and it follows a strong month in October as well, when 34,400 jobs were added on net in the state. At 5.8 percent, Florida's unemployment rate in November was the lowest it's been since May 2008, when it was 5.7 percent.

So where did these jobs come from? Though November's gains occurred in nearly all sectors, the largest contributions came from trade, transportation, and utilities (up 12,700), leisure and hospitality (up 8,400), and financial activities (up 5,800) (see the chart).

Florida-payroll-contributions

Within the trade, transportation, and utilities sector, retail added 8,400 jobs on net, followed by transportation, warehousing, and utilities, which added 3,500 jobs, and wholesale trade, which gained 800 jobs. Looking at Florida's payroll contributions over the year so far, you can glean that the trade, transportation, and utilities sector has often performed well. In fact, the sector has contributed 47,600 jobs in Florida so far this year, 30,200 from retail alone. The other big contributors over the last 11 months have been the leisure and hospitality (up 42,700), professional and business services (up 40,500), and goods-producing (up 39,000, with 33,500 from construction) sectors (see the chart).

Florida-payroll-contributions-by-sector

Looking at the losses
A few Sixth District states saw payroll declines in November, losses the district had not seen on aggregate since June. Tennessee's loss of 1,900 jobs in November was the first time the state encountered net losses since June. The largest decreases occurred in the trade, transportation, and utilities (down 2,000 payrolls) and leisure and hospitality (down 1,900) sectors. In addition, for the first time since January, Louisiana experienced job losses in November, with 2,600 jobs subtracted on net. The goods-producing sector drove the losses, shedding 3,400 jobs. Within the sector, 3,000 construction jobs were lost. Additionally, Louisiana's unemployment rate rose in November for the seventh month in a row to 6.5 percent, increasing 2.0 percentage points since April. In fact, the movements in unemployment rates of Sixth District states, particularly during the last few months, indicate that all states rates are trending down except Louisiana (see the chart).

Unemployment-rates

Furthermore, Mississippi experienced net job losses in November, shedding 4,500 payrolls. The bulk of the losses were in the leisure and hospitality (down 2,200) and professional and business services (down 1,700) sectors. Mississippi also had the highest unemployment rate in the United States in November with 7.3 percent (previously, another Sixth District state—Georgia—held that distinction for three months in a row).

Overall, the Sixth District's aggregate payroll contributions in November and a declining unemployment rate seen over a three-month trend are positive signs of continued strengthening in the labor market. However, a distinction must be made between the aggregate and state-by-state figures, considering the Sunshine State's occasional tendency to outshine its cohorts, as seen in November's data.

The state-level labor market report for December will be released on January 27, 2015, and we'll parse its numbers for you.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Regional Economic Information Network at the New Orleans Branch of the Atlanta Fed

February 27, 2015

Through the Eyes of a Big Fan

When Janet Yellen was named chair of the Board of Governors of the Federal Reserve System in February 2014, she became the fourth chair in my 30-year career here at the Atlanta Fed's Jacksonville Branch. While I vaguely remember Chairman Paul Volcker once visiting the branch, I was so new to the Bank and pretty naïve as to what the Fed actually did that I don't think I paid much attention back then. Soon after was Chairman Alan Greenspan, a brilliant man who spoke of economic conditions in a manner admittedly a bit hard for me to understand, especially since my Fed career began in an area not focused primarily on studying the economy. Then along came Chairman Ben Bernanke! Finally, someone who spoke in terms that even I could grasp. Couple his arrival with the creation of the Regional Economic Information Network and my foray into the world of economics (and the need for me to pay closer attention), I became an instant fan! I watched with great interest as Chairman Bernanke and the Federal Open Market Committee dusted off many lesser-known tools (as well as unveiling some brand-new tools) in the Fed's toolbox to help stimulate the economy during and after the Great Recession.

So, imagine my thrill at finding out that Chairman Bernanke was going to be a keynote speaker at this year's National Retail Federation's (NRF) annual conference that I had the great fortune to attend! I was like, whoop whoop! (I know, I'm just a big fan at heart!)

The morning of his appearance, I got up at zero-dark-thirty and was the first in line to enter the massive convention hall where he was scheduled to speak. I made a bee-line to the front and scoped out the best seat in the house. And I waited with anxious anticipation. I was like a teenage girl at her first rock concert when he took the stage. I listened intently as he and the president of Saks Fifth Avenue, who is serving as this year's NRF chairman, discussed the fallout from the global economic crisis and current prospects for the U.S. economy and the retail industry. It was amazing to listen to Bernanke speak in a much more casual manner (since now his comments do not necessarily move markets) about the events of the crisis and the actions taken by the Fed. (Remember, he is a scholar of the Great Depression of the 20th century and understood how the Fed could work to avoid the mistakes of the past.)

In addition to Chairman Bernanke sharing insights about the crisis with the audience, he commented on the transparency of the Federal Reserve System by saying, "In the middle of a crisis explaining where, why, and how we do what we do is as important as taking actions." When asked about the current state of the economy, Bernanke indicated that the U.S. economy is enjoying a genuine recovery. However, he has some concern regarding the European Union, noting that the situation should be watched carefully.

He was then asked what he missed most about being Fed chairman. He said that when he was chairman, he was driven everywhere by his security detail, so little things like traffic and finding parking spaces were never a concern. What he misses most, he said, "is not having to find my own parking spaces." He paused briefly and added, "That's all I miss."

How was I lucky enough to see Chairman Bernanke in person? As I mentioned, this was the NRF's annual conference, and one of my responsibilities as an analyst is to follow the retail sector and consumer behavior. So aside from my thrilling moment as a fan, what other insights did I glean at the conference? Well, when I attended the same conference two years ago, the underlying tone among participants was, "How do we get the consumer back to spending?" This year, the participants were upbeat and the focus seemed to be "We've got the consumer back, but how do we keep them back?" One answer was to create an engaging and exciting shopping experience.

Retailers must have been successful because revolving credit is up and consumer confidence is high. Let's take a look at our consumers and their behavior during the 2014 holiday shopping season.

Consumer credit outstanding rose $14.8 billion in December from $13.5 billion in November (see the chart). Nonrevolving credit, which is made up mostly of auto and student loans, rose $9.0 billion. However, the more noteworthy movement is that revolving credit rose a significant $5.8 billion in December from November's decline of $0.9 billion. In my opinion, this increase indicated the consumer was willing to take on debt previously avoided. Revolving credit, composed primarily of credit card loans, showed its strongest growth in eight months (the chart compares month-over-month data).

Change-in-consumer-credit

The Conference Board's survey on current conditions rose significantly to a seven-year high of 112.6 points in January from December's reading of 99.9. The University of Michigan's index rose to 109.3 points in January from 104.8 in December. The Conference Board's current conditions survey is based on the survey participants' view of current economic conditions as it relates to businesses and jobs, while the University of Michigan's survey is based on the individuals' sentiment as it relates to their personal households (see the chart).

Consumer-confidence-indices

The Conference Board's measure of expectations rose moderately to 96.4 points in January from 88.5 in December. The University of Michigan's index rose to 91.0 points in January from December's reading of 86.4. The expectations surveys by both entities are based on the same views of the survey participants as the current conditions surveys. However, the forward-looking expectations time frame differs. The Conference Board is looking six months out, and the University of Michigan is looking one to five years out (see the chart).

Consumer-confidence-indices-measuring-expectations

It appears, for now, that the consumer is increasingly upbeat, which is vital to the strength of the economy. Several District retail contacts recently reported double-digit growth and record-setting volume in 2014. Casual dining establishments saw an uptick in volume as consumers seem to be trading up from fast-food options.

Although total retail sales fell 0.8 percent in January from 0.9 percent in December, core retail sales—those excluding auto, gas, and building materials—rose 0.2 percent in January from December's decline to 0.1 percent, month over month. Retail sales maintained the same pace of growth for December and January rising 3.3 percent year over year (see the chart).

Retail-sale

Overall, the consumption sector looks reasonably vibrant. And as one of my industry contacts said, "Every day gets better." It appears that Chairman Bernanke isn't the only one enjoying his current situation.

Photo of Christine VietsBy Christine Viets, a Regional Economic Information Network analyst in the Jacksonville Branch of the Atlanta Fed

February 6, 2015

Florida's Economic Rebound Continues

During the last several months, business contacts in south Florida have been reporting improving economic conditions. They've discussed increased opportunities for capital expenditure projects, optimistic hiring plans, and a general upturn in business activity. This optimism made me wonder if the data on Florida's economic activity reflected what we've been hearing from our contacts in south Florida.

In November, coincident economic indicator, which measures overall economic activity, was 155.99 (see the chart). The index has been steadily improving since 2012. Although it has not yet reached its peak of 160.87 from February 2007, it seems to be within reach. While the November data for metro areas are not yet available, our South Florida business contacts recently indicated that the economy in south Florida continues to improve. Falling oil prices have not had a direct impact on businesses yet, though the general consensus is that oil's price decline is good for the consumer and consumer spending should improve if these lower prices are sustained.

chart-one

On the manufacturing front, the Southeast Purchasing Managers Index, which is produced by the Econometric Center at Kennesaw State University and measures regional manufacturing activity, declined to 54.1 in November (see the chart). However, with the exception of this past September, it has remained in expansionary territory since August 2012. (A reading above 50 indicates expansion in overall activity; a reading below 50 indicates a decline.)

chart-two

Regarding employment, payroll employment in Florida hit its trough in March 2007 and has been steadily increasing since then. In November, payroll employment in the state increased by 41,900 to 7.897 million employed, remaining slightly below the prerecession peak of 8.053 million (see the chart). South Florida business contacts, however, specifically report continued challenges in filling positions with specialized skills in technology, mathematics, engineering, management, and lending.

chart-three

While Florida's unemployment rate has a ways to go before reaching its prerecession low of 3.3 percent, it improved steadily from April 2012 through December 2013 and then plateaued at a little more than 6 percent for the first eight months of 2014 (see the chart). A downward trend in unemployment started in August of last year, reaching 5.8 percent in November. Anecdotally, we heard positive reports from contacts in the employment sector of an uptick in activity from employers using employment agencies to fill open positions.

chart-four

As you can see from the data above, overall economic activity continues to look promising in Florida, supporting the information we've been receiving from business contacts. Let's hope conditions remain accommodative and that our contacts continue to report good news.

By Marycela Diaz-Unzalu, a senior Regional Economic Information Network analyst at the Atlanta Fed's Miami Branch

December 30, 2014

New Orleans Area Optimistic Heading into 2015

During the last couple of months, the Regional Economic Information Network team from the New Orleans Branch of the Atlanta Fed was in contact with more than 30 business leaders to gauge sentiment about current and anticipated economic conditions in the region (which covers central and south Louisiana and Mississippi, south Alabama, and the Florida Panhandle to Apalachicola). The optimism and confidence that our contacts expressed over the last few quarters continued and was in fact more prevalent this time. Although contacts' expectations in previous months were for "slow and steady" growth, many business leaders now feel assured about their outlook for a pickup in growth in 2015.

In particular, we continue to receive upbeat reports about the tourism sector. This time, the message came from the Florida Panhandle again, where it was mentioned that tourism was growing into a year-round business, supported largely by an emergence of international travelers rather than the typical wintertime snowbirds. Retail contacts were also very positive, especially about holiday sales in November but also about a notable general sense of improving consumer sentiment. Another sign of strength in the region was commercial real estate, which was reported as robust across Louisiana, particularly for retail, multifamily, and office space leasing and development.

Employment and labor markets
Generally, contacts continued to report positive net hiring in response to increases in demand, though they didn't report acceleration from previous months. We continue to receive reports about firms' efforts to use automated solutions to reduce staffing or conduct optimization studies to enhance efficiency while reducing costs. Once again, contacts noted major challenges filling certain skilled positions, such as trades workers, engineers, truck drivers, and information technology professionals—a predicament business contacts have expressed for more than a year.

Costs, wages, and prices
For several months now, contacts have reported some cost pressures with little pricing power. In most cases, firms have been able to increase prices only after a competitor successfully does so or when contracts are up for renegotiation. Regarding the declining price of oil, energy industry representatives shared their view of the impact on their industry, which they indicated would initially affect smaller players (described in a recent SouthPoint post). In addition, a few contacts noted that declining energy prices posed a risk to their 2015 outlook. For the first time in many months, a number of contacts reported across-the-board wage pressures, which were previously isolated to certain positions. Others indicated they expect to encounter pressure in 2015. Several firms we spoke with indicated they expanded merit program budgets in 2015, with most increases being in the range of 2.5 to 3 percent, though a few in the range of 3 to 5 percent. Though a number of firms reported they were investigating strategies to control compensation costs with tools such as performance-based incentives, health care contributions, and targeted salary increases—a trend we've noted over the last couple of quarters.

Availability of credit and investment
Access to capital and availability of credit remained a nonissue for the majority of our contacts, though some small firms indicated obtaining credit from traditional banks remained difficult because of qualification requirements. Banking contacts indicated that loan demand strengthened in the third quarter. Capital investment reports were consistent with the last few cycles, reflecting some expansion activity but mostly focused on efficiency or maintenance.

Business outlook
Although some contacts noted a bit of uncertainty about the outlook—including the declining price of oil, increased government regulations, and the strengthening U.S. dollar—contacts were overall positive and confident about 2015 expectations. What's your outlook for 2015?

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Regional Economic Information Network at the New Orleans Branch of the Atlanta Fed

December 23, 2014

Florida's Job Report Shines Bright

On December 19 the U.S. Bureau of Labor Statistics published November 2014 state-level labor market data. This release followed the national report published on December 5, which revealed an impressive 321,000 jobs were added on net in November, while the unemployment rate held firm at 5.8 percent. The state-level data helps us determine how the Sixth District labor market compared with the national labor picture. On aggregate, Sixth District states appear to have fared well. The district contributed 49,500 jobs in November, 15 percent of the national figure. However, although the sum of jobs added in the Sixth District last month was the highest since April, losses in some states brought the aggregate number down a bit.

Florida becomes the region's top jobs contributor
One Sixth District state had a stellar month of job gains and an unemployment rate that declined to match the national rate. If you guessed the Sunshine State, you were correct. Florida was the top contributor of jobs in the district by far, with 41,900 jobs added on net (see the chart).

Contributions-to-change

Florida's job growth in November was the most the state has added in four and a half years, when it contributed 45,200 payrolls in May 2010. The November number reflects 85 percent of all jobs created in the district, and it follows a strong month in October as well, when 34,400 jobs were added on net in the state. At 5.8 percent, Florida's unemployment rate in November was the lowest it's been since May 2008, when it was 5.7 percent.

So where did these jobs come from? Though November's gains occurred in nearly all sectors, the largest contributions came from trade, transportation, and utilities (up 12,700), leisure and hospitality (up 8,400), and financial activities (up 5,800) (see the chart).

Florida-payroll-contributions

Within the trade, transportation, and utilities sector, retail added 8,400 jobs on net, followed by transportation, warehousing, and utilities, which added 3,500 jobs, and wholesale trade, which gained 800 jobs. Looking at Florida's payroll contributions over the year so far, you can glean that the trade, transportation, and utilities sector has often performed well. In fact, the sector has contributed 47,600 jobs in Florida so far this year, 30,200 from retail alone. The other big contributors over the last 11 months have been the leisure and hospitality (up 42,700), professional and business services (up 40,500), and goods-producing (up 39,000, with 33,500 from construction) sectors (see the chart).

Florida-payroll-contributions-by-sector

Looking at the losses
A few Sixth District states saw payroll declines in November, losses the district had not seen on aggregate since June. Tennessee's loss of 1,900 jobs in November was the first time the state encountered net losses since June. The largest decreases occurred in the trade, transportation, and utilities (down 2,000 payrolls) and leisure and hospitality (down 1,900) sectors. In addition, for the first time since January, Louisiana experienced job losses in November, with 2,600 jobs subtracted on net. The goods-producing sector drove the losses, shedding 3,400 jobs. Within the sector, 3,000 construction jobs were lost. Additionally, Louisiana's unemployment rate rose in November for the seventh month in a row to 6.5 percent, increasing 2.0 percentage points since April. In fact, the movements in unemployment rates of Sixth District states, particularly during the last few months, indicate that all states rates are trending down except Louisiana (see the chart).

Unemployment-rates

Furthermore, Mississippi experienced net job losses in November, shedding 4,500 payrolls. The bulk of the losses were in the leisure and hospitality (down 2,200) and professional and business services (down 1,700) sectors. Mississippi also had the highest unemployment rate in the United States in November with 7.3 percent (previously, another Sixth District state—Georgia—held that distinction for three months in a row).

Overall, the Sixth District's aggregate payroll contributions in November and a declining unemployment rate seen over a three-month trend are positive signs of continued strengthening in the labor market. However, a distinction must be made between the aggregate and state-by-state figures, considering the Sunshine State's occasional tendency to outshine its cohorts, as seen in November's data.

The state-level labor market report for December will be released on January 27, 2015, and we'll parse its numbers for you.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the Regional Economic Information Network at the New Orleans Branch of the Atlanta Fed