December Employment Numbers Released

The Bureau of Labor Statistics released the December 2008 local area employment figures yesterday. The Kansas City area’s unemployment rate surged to 6.5 percent, the highest point it has been since June 2004. The rate would have been even higher were it not for a 6,276 member drop in the area’s overall labor force. For more information on how the unemployment rate is calculated visit our glossary.
Despite the jump, the area unemployment rate is still lower than the nation’s (7.2 percent) and is right in the middle of the pack compared to other large metros. Of the 50 largest metros, Kansas City’s unemployment rate was the 28th highest. Detroit led the way at 10.6 percent and Riverside-San Bernardino was second-highest at 10.1 percent.
The lowest unemployment rates were in Salt Lake City (3.8 percent) and Oklahoma City (4.6 percent).

Major Job Cut Announcements Hit Kansas City Area

Last month we said good-bye to an economically dismal 2008 and held out hope for a better 2009.
Well, so far the economic news in 2009 has been far from hopeful. Perhaps the worst news, at least locally, came yesterday as Sprint-Nextel announced plans to eliminate 8,000 jobs by the end of March. Sprint was not alone in delivering gloomy news yesterday, as Caterpillar, Pfizer, Home Depot and ING also announced significant layoffs. So far this year more than 200,000 job cuts have been announced nationwide.
According to The Kansas City Star, about 2,000 of the jobs Sprint eliminates will be in the Kansas City area.
Speaking of Kansas City employment, the Bureau of Labor Statistics recently released data showing a loss of 8,900 jobs in the Kansas City area between November 2007 and November 2008. The Missouri side of the region accounted for 4,900 of those lost jobs, while 4,000 were on the Kansas side. Most of the job loss occurred in the Construction, Manufacturing and Trade, Transportation and Utilities sectors. Education and Health Service saw modest gains. For details, see the BLS news release.

Conference of Mayors Predicts Gloomy Employment Picture for 2009

The United States Conference of Mayors and the Council for the New American City recently released employment forecasts for all metropolitan areas across the country. Out of 363 metros, only two are projected to see employment rise in 2009 — St. George, Utah and McAllen-Edinburgh-Mission, Texas.
The Kansas City metro area is forecast to lose 20,100 jobs in 2009, or 2 percent of the regional total. This predicted decline is right on par with the national metro average, which would indicate that the impact of this recession will be approximately the same here as the nation overall. The decline also matches the projected employment loss from MARC’s 2009 economic forecast, which predicted just under 20,000 jobs lost in calendar year 2009.
The impact of this recession appears to be more focused on some Sunbelt metros. The Florida metros of Miami, Jacksonville and Tampa-St. Petersburg, along with Las Vegas, Nev. and San Jose, Calif., are among the large metros expected to see employment drop by 3 percent or more. Not coincidentally, these metros were also among the leaders in housing value growth. As a result, the popping of the housing bubble has had its greatest impact there.

Regional Foreclosures up 35 Percent in 2008

In 2008, 13,609 properties in the Kansas City entered into some stage of foreclosure. All told, this amounts to 1.56 percent of all properties in the metro and is a 35 percent increase from 2007. Kansas City ranked 49th out of the largest 100 metros.
Most of the high-foreclosure-rate metros were in the Western United States or the Sunbelt. Stockton, Calif., was the metro with the highest percentage of properties in foreclosure, at 9.46 percent, followed by Las Vegas (8.89 percent) and Riverside/San Bernardino (8.02 percent).
Many economists agree that a stable (or at least stabilizing) housing market is crucial to recovering from the recession. These foreclosure figures would indicate that recovery might still be a long way off.

More bad economic news to close out 2008

Economically speaking, 2009 cannot get here soon enough. We are about to close out one of the worst economic years in recent memory, but the release of two pieces of economic data today tells us that we need more than just a new calendar to make things better.
According to the Case-Shiller index, national home prices dropped 18 percent between October 2007 and October 2008. This marks the 27th consecutive month the index has declined. The continued decline is harmful in two ways. First, it keeps potential buyers from entering the housing market as they are waiting for prices to hit rock bottom before they purchase. Second, it undermines consumer confidence. Homeowners who are watching the value of their homes drop are less likely to go out and purchase new goods than they once were.
Which brings us to the second piece of bad news, the Conference Board's consumer confidence index hit an all-time low in December. Historically, about 70 percent of economic output is devoted to satisfying the demand for consumption, so this lack of consumer confidence means we will likely carry 2008's economic woes with us well into 2009.

Kansas City Employees: Are We Still More Productive?

Last month we released our newest report “Economic Growth: Comparing Metros, 2001-2006”. In that report we compared metro level Gross Domestic Product (GDP) among the top metros in the country. Today, we take one further step and look at GDP per employee. This should give us a reasonable proxy for employee productivity.

Historically we have claimed the average Kansas City worker is more productive than the national average. According to the 2006 data, this claim still holds. The average Kansas City area employee contributes $65,052.40 to the regions GDP. Nationally that figure is $63,335.48. However, when we compare Kansas City’s productivity to some of our peer metros, we are in the middle of the pack.

By comparison, each Denver area employee contributes nearly $10,000 more a year to its economy than do Kansas City area employees, on average.
Even more concerning is the change in productivity between 2001 and 2006. Kansas City slips behind the nation in terms of productivity growth over this period. If this trend continues, it puts our claim to being more productive than average in jeopardy.

So does this mean that Kansas City employees are getting lax? Are other metros employees working harder than us? No. It appears more likely that our recent productivity performance is tied to the type of industries we have here than our work habits, given that the the leaders in productivity are metros like San Jose, San Francisco, Seattle and Washington DC.

But this means that some of our peers have attracted or grown industries with greater numbers of “good jobs” than we have. What are those industries? Stay tuned for part 2.

October Employment Numbers Released

The Bureau of Labor Statistics (BLS) released October employment figures today. Nationwide, the unemployment rate increased from 6 percent in September to 6.1 percent in October, but unemployment rates actually decreased in our region:
· Down from 6.2 percent to 5.9 percent in the Kansas City Metro
· Down from 6.2 percent to 6.1 percent in Missouri
· Down from 4.8 percent to 4.5 percent in Kansas
Keep in mind these figures are subject to revision. Also, figures for one month do not constitute a trend.
In these times where we are all looking for a bit of good news, however, maybe this will be the start of a positive trend for the area. We will continue to monitor employment data and other indicators in the coming months.