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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.


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 4, 2014

WHAT WAS I THINKING?!?!

BLACK FRIDAY! Black Friday has historically been the day that retailers wait for all year long. It's the day when merchants hope to move from the red to the black column (hence the name). However, I as a consumer have often avoided going to the stores on this infamous day for two reasons: one, big crowds give me the heebie-jeebies, and two, I am usually working the day after Thanksgiving—doing regional economic analysis but also preparing the Jacksonville Branch for the upcoming holiday season.

As I sit here penning this post, I am steeling myself for what lies ahead: I have to brave the crowds today, Black Friday 2014, to purchase a few last-minute items to complete the holiday transformation of the branch. When I decided to go on this shopping trip with my colleague, Barb, neither of us realized what kind of day it would be...goodness, what were we thinking?!

So, we put on our armor and headed out into the madness. Here are a few pictures I took of what we encountered just trying to get to the store and find a parking space.

Picture one
Taking the back way into the shopping center. Apparently, everyone thought no one else would try it.

Picture two
Parking lot gridlock

Well, I'm happy to report that Barb and I survived our shopping excursion! But I'm also delighted to discuss the survival of retailers, since a successful Black Friday is vital to the retail industry. According to the National Retail Federation's (NRF) Thanksgiving Weekend Expectations survey, approximately 140 million shoppers were likely to take advantage of deals during the Thanksgiving weekend. Of this number, 67.6 million shoppers said they would actually shop, and 72.5 million would take a wait-and-see attitude to judge whether the deals offered were worth the trip to the stores. The NRF also noted that merchants would have to come up with amazing deals to induce consumers to spend, given that retail has been so heavily discounted since the start of the recession.

So what was the condition of the consumer going into this past holiday weekend? According to third quarter results from the New York Fed's Report on Household Debt and Credit, household debt and mortgage balances were up and credit for auto loans and credit cards increased, all pointing to more freely spending households.

Personal savings rate data from October represent further evidence that the consumer is willing to spend. According to the U.S. Bureau of Economic Analysis, the personal savings rate is personal saving (disposable personal income less personal outlays) as a percentage of disposable personal income. Prior to the release of October data, the savings rate appeared to show people saving more. However, revised data indicate that the savings rate has remained about the same since the beginning of the year, September's rate was revised down from 5.6 percent to 5.0 percent (see the chart). It would appear that people are not saving as much as previously thought, which bodes well for retailers.

Saving-rate

We have heard from some District contacts that the lower gasoline prices have freed up some discretionary dollars, with consumers taking advantage of the extra cash in their pockets, which benefits retailers. Although the consumer seems to be well positioned to spend, how they feel matters as well. We can gauge this by looking at consumer confidence measures such as the Conference Board's present situation survey and the University of Michigan's current economic conditions survey. However, these surveys represent different points of view. The Conference Board is interested in the consumer's opinion of overall economic conditions as they relate to businesses and jobs, and the University of Michigan focuses its attention on the individual's current condition as it relates to his or her household. For the purpose of this post, let's examine the individual consumer's stance on current conditions. The University of Michigan's current economic conditions index rose from 98.3 points in October to 102.7 in November, the highest it's been since July 2007 (see the chart). It appears that the consumer is feeling pretty good these days.

University-of-michigan

So how does all this suggest consumers' greater willingness to spend? Let's look at it this way: Personal debt is rising; people are saving less; people are spending; and retail sales are (hopefully) up.

Now that Black Friday has come and gone, the NRF has released its preliminary results, which show the number of shoppers dropped this year. Given that Black Friday still draws the biggest crowds of the Thanksgiving weekend—and the weekend also includes Small Business Saturday and Cyber Monday—it should be interesting to see what the retail sales data (released on January 14, 2015) say about the success of the holiday weekend.

Until then, Season's Greetings, everyone—and happy shopping!

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

November 25, 2014

Employment Momentum Grows in Florida and the Retail Sector

The U.S. Bureau of Labor Statistics published October 2014 state-level labor market data on November 21. For Sixth District states, a couple of factors stood out. First, after several months of anemic job growth, Florida employers added lots of jobs. In fact, Florida contributed 61 percent of October's net payrolls to the region. Second, although job gains were solid in a number of sectors, retail shined with 13,300 jobs added on net across the District, a figure that represents nearly half of the 27,100 jobs added to the sector in the entire United States in October. These regional retail job growth data confirm what the folks in our Regional Economic Information Network described earlier this month in their recap of economic intelligence gathered from business contacts across the Southeast: retailers anticipate strong holiday sales, and this anticipation translated into robust seasonal hiring in the retail sector in October.

A summary of the payroll and unemployment data for Sixth District states sheds more light on recent activity.

Payrolls flex some muscle
Employers in all Sixth District states except Mississippi added to payrolls: 56,600 jobs were added on net (see the chart). Florida dominated aggregate net gains in October, adding 34,400 jobs on net. Most of these gains came from the leisure and hospitality sector (up 9,300). Big contributors to Florida gains also included the educational and health services (up 9,000), professional and business services (up 6,100), and goods-producing sectors (up 5,100). (The good-producing sector was up 6,200 payrolls from construction alone but was reduced by losses in manufacturing.)

The sectors with payroll additions varied by state, though gains in the trade, transportation, and utilities sector were prevalent, with 16,800 net jobs added. Gains in this sector were dominated by retail trade (see the chart), which was the only sector tracked by all states that added jobs in every Sixth District state in October. This increase is typical for October, as retailers gear up for the holidays.

Employment momentum in the retail sector has been building for most of the region's states for a few months now (see the chart).

District gains in the professional and business services sector were also sizeable, with 13,100 jobs added. Momentum in this sector has been building in district states (see the chart). However, two states subtracted jobs from this sector in October: Louisiana (down 1,200) and Mississippi (down 1,500).

A few other facts about the Sixth District's October payrolls and sectors are noteworthy:

  • Alabama added 2,200 jobs on net. The leisure and hospitality (up 3,200) and professional and business services (up 1,400) sectors were the top contributors. The biggest losses occurred in the government (down 1,500); trade, transportation, and utilities (down 600); and financial activities (down 500) sectors.
  • In Florida, aside from job gains mentioned above, payrolls fell in the information (down 2,100) and financial activities (down 100) sectors.
  • Employers in Georgia added 11,600 jobs on net. The largest gains occurred in trade, transportation, and utilities (up7,900, with 4,700 of those payrolls from wholesale trade) and professional and business services (up 5,400). The biggest losses came from government (down 3,200) and financial activities (down 1,200).
  • Louisiana added 1,200 payrolls on net, most of which came from the trade, transportation, and utilities (up 1,500) sector. That sector was up 2,900 from retail trade, reduced by losses in wholesale trade) and educational and health services (up 1,200) sectors. The biggest losses occurred in leisure and hospitality (down 2,600) and professional and business services (down 1,200).
  • Mississippi was the only district state to subtract payrolls from the aggregate district figure. The largest losses came from the professional and business services (down 1,500) and government (down 700) sectors. The only gains occurred in the educational and health services (up 1,300), leisure and hospitality (up 500), and trade, transportation, and utilities (up 400) sectors.
  • Tennessee employers increased payrolls by 7,900 on net. The largest increases occurred in the trade, transportation, and utilities (up 3,500) and professional and business services (up 2,900) sectors. The biggest losses occurred in educational and health services (down 700) and leisure and hospitality (down 400) sectors.

Regional unemployment declines, if only slightly
The aggregate district unemployment rate was 6.6 percent in October, a decline of 0.2 percentage point from September (see the chart).

The rate fell in all states except for Louisiana, where it increased to 6.2 percent from 6.0 percent the previous month and was the sixth straight month of an increasing unemployment rate in that state. As I reported last month, this isn't necessarily a bad thing in the short run, since the state added jobs yet appears to have increased its labor force participation rate.

The unemployment rate fell in all remaining District states. Alabama's rate fell 0.3 percentage point in October to 6.3, its lowest rate in nine months. Florida's rate fell 0.1 percentage point to 6.0 percent, the lowest it's been in more than six years. The unemployment rate in Georgia fell for the second month in a row, to 7.7 percent in October from 7.9 percent in September. Though Georgia's unemployment rate declined, it had the highest rate in the United States in October for the third month in a row, at 7.7 percent. Mississippi's rate declined 0.1 percentage point to 7.6 percent, the lowest it's been in six months. In Tennessee the unemployment rate was 7.1 percent, a 0.2 percentage point decline from September.

So once again, collectively, the Sixth District states' labor market showed continued strengthening in October, particularly the state of Florida and the retail sector.

Hopefully, this progress continues for the month of November. We'll see when the data are released on December 19.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the New Orleans Branch of the Atlanta Fed

July 25, 2014

Auto Sales Accelerating

"My pappy said 'Son, you're gonna drive me to drinkin' if you don't stop drivin' that hot rod Lincoln.'"
—Charley Ryan, 1958

Automobiles have loomed large in the American experience since Henry Ford's Tin Lizzie—the fabled Model T—first rolled off the assembly line in 1908. Back in the 1940s and 1950s, a favorite pastime of American youth was hot-rodding (or so I've been told by my much, much older siblings). Cars have inspired countless songs, including Charley Ryan's "Hot Rod Lincoln" and "Beep, Beep," a tempo-changing ditty from 1958 about a Nash Rambler and a Cadillac. And in the 1973 movie American Graffiti, who can forget the iconic 1932 Deuce Coupe driven by John Milner or Toad's 1958 Impala? It was all about the cars!

And it appears consumers feel pretty much the same way. The one shining star throughout this recovery in the wake of the Great Recession has been the growth in unit sales of motor vehicles. I think it's safe to say that folks are buying new rides; it's just that simple. Although retail sales have been growing modestly, motor vehicle sales have been one of the driving forces (OK, yes—pun intended) behind the upward movement seen overall.

Light vehicle sales continued rising in June, reaching a postrecession high of 16.9 million units (the seasonally adjusted annual rate; see the chart).

This growth can also been seen when looking at consumer credit outstanding. Consumer credit is debt that a consumer enters into with the intent of making an immediate purchase. There are two types of consumer credit: revolving and nonrevolving. Let's look for a moment at nonrevolving credit, which is defined as an installment loan in which the amount borrowed (plus interest) is repaid at set intervals for the life of the loan. As the chart below shows, nonrevolving credit has been growing over roughly the same period as vehicle sales, which is not surprising when you consider that vehicle loans account for roughly 40 percent of this type of credit.

According to the U.S. Census Bureau, automobile sales declined 0.2 percent in June. However, a year-over-year comparison shows that vehicle sales increased 7.0 percent (see the chart). The consensus among our regional auto dealer contacts have indicated they've seen a steady increase in year-to-date sales and are expecting "sales for the remainder of the year to be fairly robust."

Historically, auto sales fluctuate quite a bit. But as you can see, the chart above supports the claim that vehicle sales have shown strong growth compared with total retail sales since the end of the recession. These data provide insight into consumer spending trends. Although this is just one data series in a long list of economic indicators we follow, I think it's fair to say this one gives a better understanding of consumer behavior.

So we'll keep our eye on this indicator. And remember, "Beep-beep, beep-beep. His horn went beep-beep-beep."

Photo of Chris Viets By Chris Viets, a REIN analyst in the Atlanta Fed's Jacksonville 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 4, 2014

WHAT WAS I THINKING?!?!

BLACK FRIDAY! Black Friday has historically been the day that retailers wait for all year long. It's the day when merchants hope to move from the red to the black column (hence the name). However, I as a consumer have often avoided going to the stores on this infamous day for two reasons: one, big crowds give me the heebie-jeebies, and two, I am usually working the day after Thanksgiving—doing regional economic analysis but also preparing the Jacksonville Branch for the upcoming holiday season.

As I sit here penning this post, I am steeling myself for what lies ahead: I have to brave the crowds today, Black Friday 2014, to purchase a few last-minute items to complete the holiday transformation of the branch. When I decided to go on this shopping trip with my colleague, Barb, neither of us realized what kind of day it would be...goodness, what were we thinking?!

So, we put on our armor and headed out into the madness. Here are a few pictures I took of what we encountered just trying to get to the store and find a parking space.

Picture one
Taking the back way into the shopping center. Apparently, everyone thought no one else would try it.

Picture two
Parking lot gridlock

Well, I'm happy to report that Barb and I survived our shopping excursion! But I'm also delighted to discuss the survival of retailers, since a successful Black Friday is vital to the retail industry. According to the National Retail Federation's (NRF) Thanksgiving Weekend Expectations survey, approximately 140 million shoppers were likely to take advantage of deals during the Thanksgiving weekend. Of this number, 67.6 million shoppers said they would actually shop, and 72.5 million would take a wait-and-see attitude to judge whether the deals offered were worth the trip to the stores. The NRF also noted that merchants would have to come up with amazing deals to induce consumers to spend, given that retail has been so heavily discounted since the start of the recession.

So what was the condition of the consumer going into this past holiday weekend? According to third quarter results from the New York Fed's Report on Household Debt and Credit, household debt and mortgage balances were up and credit for auto loans and credit cards increased, all pointing to more freely spending households.

Personal savings rate data from October represent further evidence that the consumer is willing to spend. According to the U.S. Bureau of Economic Analysis, the personal savings rate is personal saving (disposable personal income less personal outlays) as a percentage of disposable personal income. Prior to the release of October data, the savings rate appeared to show people saving more. However, revised data indicate that the savings rate has remained about the same since the beginning of the year, September's rate was revised down from 5.6 percent to 5.0 percent (see the chart). It would appear that people are not saving as much as previously thought, which bodes well for retailers.

Saving-rate

We have heard from some District contacts that the lower gasoline prices have freed up some discretionary dollars, with consumers taking advantage of the extra cash in their pockets, which benefits retailers. Although the consumer seems to be well positioned to spend, how they feel matters as well. We can gauge this by looking at consumer confidence measures such as the Conference Board's present situation survey and the University of Michigan's current economic conditions survey. However, these surveys represent different points of view. The Conference Board is interested in the consumer's opinion of overall economic conditions as they relate to businesses and jobs, and the University of Michigan focuses its attention on the individual's current condition as it relates to his or her household. For the purpose of this post, let's examine the individual consumer's stance on current conditions. The University of Michigan's current economic conditions index rose from 98.3 points in October to 102.7 in November, the highest it's been since July 2007 (see the chart). It appears that the consumer is feeling pretty good these days.

University-of-michigan

So how does all this suggest consumers' greater willingness to spend? Let's look at it this way: Personal debt is rising; people are saving less; people are spending; and retail sales are (hopefully) up.

Now that Black Friday has come and gone, the NRF has released its preliminary results, which show the number of shoppers dropped this year. Given that Black Friday still draws the biggest crowds of the Thanksgiving weekend—and the weekend also includes Small Business Saturday and Cyber Monday—it should be interesting to see what the retail sales data (released on January 14, 2015) say about the success of the holiday weekend.

Until then, Season's Greetings, everyone—and happy shopping!

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

November 25, 2014

Employment Momentum Grows in Florida and the Retail Sector

The U.S. Bureau of Labor Statistics published October 2014 state-level labor market data on November 21. For Sixth District states, a couple of factors stood out. First, after several months of anemic job growth, Florida employers added lots of jobs. In fact, Florida contributed 61 percent of October's net payrolls to the region. Second, although job gains were solid in a number of sectors, retail shined with 13,300 jobs added on net across the District, a figure that represents nearly half of the 27,100 jobs added to the sector in the entire United States in October. These regional retail job growth data confirm what the folks in our Regional Economic Information Network described earlier this month in their recap of economic intelligence gathered from business contacts across the Southeast: retailers anticipate strong holiday sales, and this anticipation translated into robust seasonal hiring in the retail sector in October.

A summary of the payroll and unemployment data for Sixth District states sheds more light on recent activity.

Payrolls flex some muscle
Employers in all Sixth District states except Mississippi added to payrolls: 56,600 jobs were added on net (see the chart). Florida dominated aggregate net gains in October, adding 34,400 jobs on net. Most of these gains came from the leisure and hospitality sector (up 9,300). Big contributors to Florida gains also included the educational and health services (up 9,000), professional and business services (up 6,100), and goods-producing sectors (up 5,100). (The good-producing sector was up 6,200 payrolls from construction alone but was reduced by losses in manufacturing.)

The sectors with payroll additions varied by state, though gains in the trade, transportation, and utilities sector were prevalent, with 16,800 net jobs added. Gains in this sector were dominated by retail trade (see the chart), which was the only sector tracked by all states that added jobs in every Sixth District state in October. This increase is typical for October, as retailers gear up for the holidays.

Employment momentum in the retail sector has been building for most of the region's states for a few months now (see the chart).

District gains in the professional and business services sector were also sizeable, with 13,100 jobs added. Momentum in this sector has been building in district states (see the chart). However, two states subtracted jobs from this sector in October: Louisiana (down 1,200) and Mississippi (down 1,500).

A few other facts about the Sixth District's October payrolls and sectors are noteworthy:

  • Alabama added 2,200 jobs on net. The leisure and hospitality (up 3,200) and professional and business services (up 1,400) sectors were the top contributors. The biggest losses occurred in the government (down 1,500); trade, transportation, and utilities (down 600); and financial activities (down 500) sectors.
  • In Florida, aside from job gains mentioned above, payrolls fell in the information (down 2,100) and financial activities (down 100) sectors.
  • Employers in Georgia added 11,600 jobs on net. The largest gains occurred in trade, transportation, and utilities (up7,900, with 4,700 of those payrolls from wholesale trade) and professional and business services (up 5,400). The biggest losses came from government (down 3,200) and financial activities (down 1,200).
  • Louisiana added 1,200 payrolls on net, most of which came from the trade, transportation, and utilities (up 1,500) sector. That sector was up 2,900 from retail trade, reduced by losses in wholesale trade) and educational and health services (up 1,200) sectors. The biggest losses occurred in leisure and hospitality (down 2,600) and professional and business services (down 1,200).
  • Mississippi was the only district state to subtract payrolls from the aggregate district figure. The largest losses came from the professional and business services (down 1,500) and government (down 700) sectors. The only gains occurred in the educational and health services (up 1,300), leisure and hospitality (up 500), and trade, transportation, and utilities (up 400) sectors.
  • Tennessee employers increased payrolls by 7,900 on net. The largest increases occurred in the trade, transportation, and utilities (up 3,500) and professional and business services (up 2,900) sectors. The biggest losses occurred in educational and health services (down 700) and leisure and hospitality (down 400) sectors.

Regional unemployment declines, if only slightly
The aggregate district unemployment rate was 6.6 percent in October, a decline of 0.2 percentage point from September (see the chart).

The rate fell in all states except for Louisiana, where it increased to 6.2 percent from 6.0 percent the previous month and was the sixth straight month of an increasing unemployment rate in that state. As I reported last month, this isn't necessarily a bad thing in the short run, since the state added jobs yet appears to have increased its labor force participation rate.

The unemployment rate fell in all remaining District states. Alabama's rate fell 0.3 percentage point in October to 6.3, its lowest rate in nine months. Florida's rate fell 0.1 percentage point to 6.0 percent, the lowest it's been in more than six years. The unemployment rate in Georgia fell for the second month in a row, to 7.7 percent in October from 7.9 percent in September. Though Georgia's unemployment rate declined, it had the highest rate in the United States in October for the third month in a row, at 7.7 percent. Mississippi's rate declined 0.1 percentage point to 7.6 percent, the lowest it's been in six months. In Tennessee the unemployment rate was 7.1 percent, a 0.2 percentage point decline from September.

So once again, collectively, the Sixth District states' labor market showed continued strengthening in October, particularly the state of Florida and the retail sector.

Hopefully, this progress continues for the month of November. We'll see when the data are released on December 19.

Photo of Rebekah DurhamBy Rebekah Durham, economic policy analysis specialist in the New Orleans Branch of the Atlanta Fed

July 25, 2014

Auto Sales Accelerating

"My pappy said 'Son, you're gonna drive me to drinkin' if you don't stop drivin' that hot rod Lincoln.'"
—Charley Ryan, 1958

Automobiles have loomed large in the American experience since Henry Ford's Tin Lizzie—the fabled Model T—first rolled off the assembly line in 1908. Back in the 1940s and 1950s, a favorite pastime of American youth was hot-rodding (or so I've been told by my much, much older siblings). Cars have inspired countless songs, including Charley Ryan's "Hot Rod Lincoln" and "Beep, Beep," a tempo-changing ditty from 1958 about a Nash Rambler and a Cadillac. And in the 1973 movie American Graffiti, who can forget the iconic 1932 Deuce Coupe driven by John Milner or Toad's 1958 Impala? It was all about the cars!

And it appears consumers feel pretty much the same way. The one shining star throughout this recovery in the wake of the Great Recession has been the growth in unit sales of motor vehicles. I think it's safe to say that folks are buying new rides; it's just that simple. Although retail sales have been growing modestly, motor vehicle sales have been one of the driving forces (OK, yes—pun intended) behind the upward movement seen overall.

Light vehicle sales continued rising in June, reaching a postrecession high of 16.9 million units (the seasonally adjusted annual rate; see the chart).

This growth can also been seen when looking at consumer credit outstanding. Consumer credit is debt that a consumer enters into with the intent of making an immediate purchase. There are two types of consumer credit: revolving and nonrevolving. Let's look for a moment at nonrevolving credit, which is defined as an installment loan in which the amount borrowed (plus interest) is repaid at set intervals for the life of the loan. As the chart below shows, nonrevolving credit has been growing over roughly the same period as vehicle sales, which is not surprising when you consider that vehicle loans account for roughly 40 percent of this type of credit.

According to the U.S. Census Bureau, automobile sales declined 0.2 percent in June. However, a year-over-year comparison shows that vehicle sales increased 7.0 percent (see the chart). The consensus among our regional auto dealer contacts have indicated they've seen a steady increase in year-to-date sales and are expecting "sales for the remainder of the year to be fairly robust."

Historically, auto sales fluctuate quite a bit. But as you can see, the chart above supports the claim that vehicle sales have shown strong growth compared with total retail sales since the end of the recession. These data provide insight into consumer spending trends. Although this is just one data series in a long list of economic indicators we follow, I think it's fair to say this one gives a better understanding of consumer behavior.

So we'll keep our eye on this indicator. And remember, "Beep-beep, beep-beep. His horn went beep-beep-beep."

Photo of Chris Viets By Chris Viets, a REIN analyst in the Atlanta Fed's Jacksonville Branch