Seemingly every day we get more stories that indicate the recession may be over. Yesterday, the Kansas City Regional Association of Realtors released its July figures. Overall home sales have increased for the sixth consecutive month. In July, 2,778 homes were sold. This is a slight increase from July 2008’s figure of 2,754. Additionally, overall home prices increased for the sixth straight month. The average sales price in July was $174,691, an increase of nearly $38,000 since January.
National housing data is showing the same pattern. July saw existing home sales increase 7.2 percent from June and 5 percent from one year ago. Experts cite first-time home buyers who are taking advantage of tax refunds funded by economic stimulus money for much of the increase.
In more general economic news, Fed Chairman Ben Bernanke is optimistic about the economy, saying “Prospects for a return to growth in the near term appear good.”
Back on the local front, Harley Davidson has announced that it is considering Kansas City as the site for another manufacturing plant. This, coupled with the continued strength of the region’s two auto manufacturers, shows that Kansas City’s manufacturing base is solid.
The economic recovery is not expected to be particularly speedy or robust, as unemployment remains high, but with more and more positive news, we can at least believe we are on the right track.
Friday, August 21, 2009
Friday, July 31, 2009
A Double Dip of Good (Or At Least, Stable) News
A couple of news items released yesterday paint Kansas City’s economy in a good light. First, the Federal Reserve Bank released its July Beige Book which provides regional overviews of the US economy. The Kansas City region, which stretches from Missouri west to New Mexico, Colorado and Wyoming was said to be showing “signs of stabilization”. Kansas City was one of 4 districts (overall there are 12 Fed Districts) in this category. As a sign of these economic times, stabilization was the rosiest description handed out by the Fed. Other districts were still described as “slow”, “subdued”, or “weak”.
The other piece of good news also involves the word stable. Kansas City’s unemployment rate climbed up to 8.7 percent June from 8.6 percent in May. Stable is good when you consider some of our peer metros saw significant increases between May and June.
This news, coupled with our previous post regarding steady improvements to the local housing market point to a region that may have the worst of the recession in its rearview mirror.
The other piece of good news also involves the word stable. Kansas City’s unemployment rate climbed up to 8.7 percent June from 8.6 percent in May. Stable is good when you consider some of our peer metros saw significant increases between May and June.
This news, coupled with our previous post regarding steady improvements to the local housing market point to a region that may have the worst of the recession in its rearview mirror.
Friday, July 17, 2009
Is the Housing Market Starting to Thaw?
Much of the blame for the current recession has been attributed to problems with the housing market. The bursting of the housing bubble (which was much more extreme in other metros than it was in the Kansas City region) set off a financial chain of events that led to our current economic woes. Many economists, KCEconomy included, believe the housing market must begin to recover before we can see meaningful improvements in the overall economy.
At long last, we might actually be seeing some positive signs in our local housing market. This past June marked the sixth straight month where the average sale price of Kansas City area homes increased.
The average home sale price in Kansas City was $173,445 in June. Last January, the average price was just $136,747. We know some of this has to do with the seasonal nature of the housing market ,but the June figure of $173,445 is at least in the same neighborhood as last June’s $181,000 (off by just $7,555), while the January 2009 figure was nearly $30,000 less than January 2008.
It is a modest sign, but at least it looks like things might be heading in the right direction. We will continue to monitor housing prices and many other variables. Stay tuned.
At long last, we might actually be seeing some positive signs in our local housing market. This past June marked the sixth straight month where the average sale price of Kansas City area homes increased.
The average home sale price in Kansas City was $173,445 in June. Last January, the average price was just $136,747. We know some of this has to do with the seasonal nature of the housing market ,but the June figure of $173,445 is at least in the same neighborhood as last June’s $181,000 (off by just $7,555), while the January 2009 figure was nearly $30,000 less than January 2008.
It is a modest sign, but at least it looks like things might be heading in the right direction. We will continue to monitor housing prices and many other variables. Stay tuned.
Friday, June 5, 2009
National Employment Figures are a Mixed Bag
According to the Bureau of Labor Statistics, the US unemployment rate jumped from 8.9 percent to 9.4 percent in May. On the surface that is not good news, but if you look closer you can find some positives that indicate that the economy might be set to recover before too long.
The unemployment rate increased because the labor force (the number of people actively employed or looking for work) increased by roughly 350,000 last month. This increase, coupled with a loss of 345,000 jobs nationwide, meant more people were looking for fewer jobs, thus the increase in the unemployment rate.
So, where is the positive news? May’s job loss of 345,000 is much lower than we have experienced in recent months. Monthly job loss peaked in January at over 700,000 and has trended downward ever since. No doubt the recession persists, but the slowing pace of job loss is at least a trend in the right direction.
Comparable local numbers will be available later this month but recently, we have been doing slightly better than the nation so far this year.
The unemployment rate increased because the labor force (the number of people actively employed or looking for work) increased by roughly 350,000 last month. This increase, coupled with a loss of 345,000 jobs nationwide, meant more people were looking for fewer jobs, thus the increase in the unemployment rate.
So, where is the positive news? May’s job loss of 345,000 is much lower than we have experienced in recent months. Monthly job loss peaked in January at over 700,000 and has trended downward ever since. No doubt the recession persists, but the slowing pace of job loss is at least a trend in the right direction.
Comparable local numbers will be available later this month but recently, we have been doing slightly better than the nation so far this year.
Wednesday, June 3, 2009
April Unemployment Numbers Show Upward Trend
The release of April’s metro-level unemployment data showed a positive trend (if two or three months can be considered a trend) for the Kansas City area. Employment in the region increased by over 8,800, and outpaced the labor force growth of 3,600. This led to a decline of 5,218 in the number of unemployed and a good-sized drop in the unemployment rate, to 7.8 percent. It was 8.3 percent in March.
Kansas City was not alone, as the data showed a slightly improving employment picture in most metros throughout the country. But it is significant to note how Kansas City’s unemployment rate is performing relative to the national rate. In recent years, our unemployment rate has generally run even with or slightly higher than the national rate. But beginning in January the region’s unemployment rate started diverging from that pattern and it now stands nearly a full percentage point below than the national average.
Kansas City was not alone, as the data showed a slightly improving employment picture in most metros throughout the country. But it is significant to note how Kansas City’s unemployment rate is performing relative to the national rate. In recent years, our unemployment rate has generally run even with or slightly higher than the national rate. But beginning in January the region’s unemployment rate started diverging from that pattern and it now stands nearly a full percentage point below than the national average.
Friday, May 8, 2009
Signs of a Recovery?
As you know, we at kceconomy.com are always looking for any sign that the Kansas City area economy might be rebounding. Those signs have been very hard to find over the past six months or so, but we have seen a few positive figures popping up over the past few weeks.
First of all, the local unemployment rate declined for the first time since last October — from 8.4 percent to 8.2 percent. Granted, 8.2 percent is still a high unemployment rate, but the fact that it declined is somewhat encouraging. The U.S. rate went up over the same time period, as did the rate in Kansas. Missouri’s rate remained the same.
Secondly, we got some good news in the manufacturing sector. The General Motors plant in Fairfax was expected to be shut down for at least nine weeks over the summer (as were most GM plants). However, GM announced that the Fairfax plant is one of the few plants that would remain open over the summer. This is clearly a feather in the cap for Kansas City area auto workers and shot in the arm to the many other workers who support the auto industry.
These signs are small compared to the mountains of bad news in recent months, but in these tough times any good news is welcome. Hopefully these positive notes will prove to be the beginning of a recovery trend.
First of all, the local unemployment rate declined for the first time since last October — from 8.4 percent to 8.2 percent. Granted, 8.2 percent is still a high unemployment rate, but the fact that it declined is somewhat encouraging. The U.S. rate went up over the same time period, as did the rate in Kansas. Missouri’s rate remained the same.
Secondly, we got some good news in the manufacturing sector. The General Motors plant in Fairfax was expected to be shut down for at least nine weeks over the summer (as were most GM plants). However, GM announced that the Fairfax plant is one of the few plants that would remain open over the summer. This is clearly a feather in the cap for Kansas City area auto workers and shot in the arm to the many other workers who support the auto industry.
These signs are small compared to the mountains of bad news in recent months, but in these tough times any good news is welcome. Hopefully these positive notes will prove to be the beginning of a recovery trend.
Friday, April 3, 2009
Metropolitan Area Unemployment Rate Trends Show an Uneven Recession
According to the National Bureau of Economic Research, the current recession officially began in December 2007. This recession has been anything but typical. Most economic news during the recession had focused on the financial industry. Terms like credit default swaps, securitized mortgages, toxic assets and bailouts have dominated economic news. But make no mistake; this recession is becoming more and more evident in the traditional economic indicators as well, particularly…employment.
Recent releases of employment data have painted a grim picture. Nationwide, the non-seasonally adjusted* unemployment rate was 8.9 percent. This marks the highest point since 1983. Just one year ago, the unemployment rate was a relatively mild 5.2 percent. Roughly 4.5 million jobs have been lost across the nation in one year. All told, we are looking at the worst employment picture this country has seen since at least the early 1980s.
While the entire country is feeling the impacts of the recession, the economic woes are not evenly distributed. Some parts of the country may get by relatively unscathed, while others are facing a severe downturn and a long recovery. This is perhaps best illustrated by looking at February’s unemployment rate figures by metropolitan area. A quick look at the map below shows some definite patterns.
February 2009 Unemployment Rate
The blue to turquoise colors represent unemployment rates below the national rate, while the warmer colors are above the national rate. In looking at the map, five distinct regions emerge, with two of them doing better than the national average and three doing worse.
First, let’s look at the two “better than average” regions, the Great Plains and the Northeast. With a few exceptions, metro areas along the east coast, from Virginia to Maine, are doing fairly well when compared to the nation. Keep in mind this is in relative terms, because we are still talking about high unemployment rates — over 6 percent. The second “better than average” region is very large, ranging basically from the Mississippi River to the states bordering the Pacific. This region includes some of the country’s lowest unemployment rates in metros like Lincoln, Omaha, New Orleans and Salt Lake City.
The three “worse than average” regions are the South, the Great Lake States and the West Coast. The trouble in these regions makes sense in light of some of the economic headlines of recent months. The West Coast and the South are home to the metros that saw the largest housing bubbles burst. Housing values declined by 25 or 30 percent in places like Miami and Las Vegas, with profound impacts on their local economies. In the Great Lakes area and in parts of the South, the decline in manufacturing, particularly automobile manufacturing, has led to high unemployment rates.
The same pattern is evident when looking at the change in unemployment rate over the past year (below). Not surprisingly, those regions with the highest unemployment rates also have experienced the greatest increases in unemployment rates. Nationally, the unemployment rate has increased 3.7 percentage points since February 2008. Most metros in the South, Great Lakes region and the West Coast had increases in excess of 3.7 percentage points, while the rest of the country generally saw lower increases.
Change in Unemployment Rate Feb. 2008 to Feb. 2009
Recent releases of employment data have painted a grim picture. Nationwide, the non-seasonally adjusted* unemployment rate was 8.9 percent. This marks the highest point since 1983. Just one year ago, the unemployment rate was a relatively mild 5.2 percent. Roughly 4.5 million jobs have been lost across the nation in one year. All told, we are looking at the worst employment picture this country has seen since at least the early 1980s.
While the entire country is feeling the impacts of the recession, the economic woes are not evenly distributed. Some parts of the country may get by relatively unscathed, while others are facing a severe downturn and a long recovery. This is perhaps best illustrated by looking at February’s unemployment rate figures by metropolitan area. A quick look at the map below shows some definite patterns.
February 2009 Unemployment Rate
The blue to turquoise colors represent unemployment rates below the national rate, while the warmer colors are above the national rate. In looking at the map, five distinct regions emerge, with two of them doing better than the national average and three doing worse.First, let’s look at the two “better than average” regions, the Great Plains and the Northeast. With a few exceptions, metro areas along the east coast, from Virginia to Maine, are doing fairly well when compared to the nation. Keep in mind this is in relative terms, because we are still talking about high unemployment rates — over 6 percent. The second “better than average” region is very large, ranging basically from the Mississippi River to the states bordering the Pacific. This region includes some of the country’s lowest unemployment rates in metros like Lincoln, Omaha, New Orleans and Salt Lake City.
The three “worse than average” regions are the South, the Great Lake States and the West Coast. The trouble in these regions makes sense in light of some of the economic headlines of recent months. The West Coast and the South are home to the metros that saw the largest housing bubbles burst. Housing values declined by 25 or 30 percent in places like Miami and Las Vegas, with profound impacts on their local economies. In the Great Lakes area and in parts of the South, the decline in manufacturing, particularly automobile manufacturing, has led to high unemployment rates.
The same pattern is evident when looking at the change in unemployment rate over the past year (below). Not surprisingly, those regions with the highest unemployment rates also have experienced the greatest increases in unemployment rates. Nationally, the unemployment rate has increased 3.7 percentage points since February 2008. Most metros in the South, Great Lakes region and the West Coast had increases in excess of 3.7 percentage points, while the rest of the country generally saw lower increases.
Change in Unemployment Rate Feb. 2008 to Feb. 2009
The Kansas City area has done slightly better than the U.S. in terms of both current unemployment rate (8.4 percent compared to 8.9 percent) and increase in the unemployment rate (3.2 percentage points compared to 3.7). We are not, however, doing as well as some of the smaller surrounding metros like Des Moines and Omaha. This is likely due to Kansas City having a larger manufacturing base than these metros, although manufacturing does not play as prominent a role in Kansas City as it does some Great Lakes metros like Detroit or Cleveland.
The recession is forecast to continue for several more months, with a recovery coming at the end of 2009 or early 2010. The Kansas City area should continue to outperform the nation slightly during the recession and be well positioned to recover when the national economy begins to rebound.
*Until very recently, seasonally adjusted data was not available from the Bureau of Labor Statistics so the unseasonally adjusted data is used to compare national and local data. KCeconomy.com is currently working with the newly available seasonally adjusted data and will have that available soon.
The recession is forecast to continue for several more months, with a recovery coming at the end of 2009 or early 2010. The Kansas City area should continue to outperform the nation slightly during the recession and be well positioned to recover when the national economy begins to rebound.
*Until very recently, seasonally adjusted data was not available from the Bureau of Labor Statistics so the unseasonally adjusted data is used to compare national and local data. KCeconomy.com is currently working with the newly available seasonally adjusted data and will have that available soon.
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