Analysis Roundup for September 21, 2012

Here’s the latest collection of topics discussed in economic reports of note from financial institutions and government agencies.

BLS/NC Employment Security
North Carolina Unemployment Rate Highest in Southeast

This morning’s release of state-based employment data was not good for the Tar Heel State. Seasonally adjusted statistics indicate only 1,100 nonfarm payroll jobs created in August, while total unemployed grew by 5,900. North Carolina’s unemployment rate rose from 9.6% to 9.7%, making it slightly higher than South Carolina (9.6%) and keeping it significantly above other states in the Southeastern US.

Overall, 26 states saw their jobless rates go up. North Carolina’s unemployment rate remains among the highest in the nation.

Special Report
Quantitative Easing Returns for the Long-Term

At least through the remainder of the year, the Federal Reserve will be engaging in the purchase of Mortgage-Backed Securities in an effort to help improve general economic growth.

This latest round of “Quantitative Easing” was announced last Thursday by Federal Reserve Chairman Ben Bernanke following the latest meeting of The Fed’s Open Market Committee.

Officially, the purpose of Quantitative Easing (QE) is for the Federal Reserve to expand the supply of available money and use it to purchase low-risk securities. As a result, according to the official explanation, holders of other capital will redirect their investments to those with higher risks in an effort to achieve some sort of positive return.

Unlike prior rounds of QE that had specific limits on how much in securities could be bought overall, QE3 sets a monthly limit of $40 billion. At the present, it is intended to last through the end of the year. The Fed will also continue to move its holdings of short-term securities into long-term securities (i.e., Operation Twist) at a rate of $45 billion a month, for a total monthly impact of $85 billion.

While Chairman Bernanke mentioned QE3 being in place through the end of year, he also indicated that the program would be open-ended based on the evaluation of economic benchmarks:

From Wells Fargo Economics Group:

Importantly, the Fed noted that if labor market conditions do not improve “substantially”, it would continue the MBS bond-buying program plus potentially undertake further easing measures. Moreover, the Fed “expects that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the economic recovery strengthens”. Bottom line, whenever rates do rise, we should expect a more gradual-than-normal tightening process to unfold.

Following the announcement late last week, general market activity was positive going into the weekend. However, with the arrival of less-than-impressive earning reports from several major corporations, along with continued reports suggesting lackluster overall economic performance, markets are trending downward.

Increasing the money supply via QE3 has the potential to facilitate greater inflation, especially with commodities. Initially, crude oil remained near $100/barrel following the QE3 announcement, though its price has dropped into the mid-to-low $90’s due to disappointing economic news. We’ll see later if this is having any impact on actual prices for gasoline.

Wells Fargo Economics Group
Second Half 2012 Outlook Undercut

Wells Fargo Chief Economist John Silvia cut the group’s projection for second half GDP growth to 1.5%, based on a host of negative reports involving most of the elements contributing to overall economic activity. Watch the video to learn more, or find a full summary of the comments here at Diminished Return.

USDA
Drought all but over for NC Farmlands

The USDA’s latest weekly report on pasture and range conditions finds that less than 10% of North Carolina’s fields are in “poor to very poor condition,” among the best ratings in the country and significantly better than the State’s modest results last year.

Overall, this is good news for the State’s agricultural economy, which should expect strong fall harvests, good prices in the commodities market, and great potential for winter crops and next year’s growing seasons.

NAHB/Wells Fargo & National Association of Realtors
Housing Growing, for a “New Normal” Environment

The latest update to the National Association of Homebuilders/Wells Fargo Housing Index shows continued improvement, as the index returned to a level unseen since mid-2006.

Housing starts over the summer improved compared to levels in recent years, though they are still significantly below levels that existed prior to the recession and bursting of the housing bubble.

Historic low-interest rates also contributed to a substantial increasing in sales of existing housing for August, with overall volume increasing 7.8% last month. For the year, sales are up 4.1%. Inventories of existing homes have also subsided from post-recession peaks, including a significant decline in distressed inventories.

However, we do not know how much distressed inventory being withheld by banks and investors still remains to be processed through the market. With the media home price increasing this year by 9.5%, there may be some reason to believe the worst is behind us, though it is not absolutely certain.

GasBuddy/FinViz
Oil slips a little, Gasoline does not 

Crude oil futures slipped a little this past week following news of continued economic uncertainty. Given the breakout of additional violence in the Middle East, including the murder of the US Ambassador to Libya, the fact that prices did not spike upward in light of growing hostilities on the ground suggests that the market for crude is stable, and thus demand is not growing on a global scale.

If global demand is not increasing, or is in fact declining, it is also an indication that China’s economic woes are greater than identified.

With respect to gasoline prices, there is typically a delay between fluctuations in crude to their appearance with respect to end product. At the same time, while corn prices have declined 7% in the past 2 weeks, they are still close to the historic high for the grain.

Consequently, we have yet to see a noticeable drop in prices for motor fuel compared to where they were at peak around the Labor Day holiday.

At the same time, North Carolina prices remain closer to the national average, indicating a peak price situation within the state itself.

QE3 may also play a role in keeping gasoline prices high, especially if greater inflation kicks in. Overall, gasoline prices not only significantly impact local government budgets, but they also have a large influence on disposable personal income. Higher fuel prices in August contributed to an increase in the level of total US retail sales, a situation where greater spending does not necessarily reflect improved economic activity.

Worth Checking Out

Here are some articles worth taking a look at involving NC local governments, or possible strategies for local budgeting and finance:

Wilmington Star News: Brunswick board moves to take control of health, DSS agencies

Daily Southerner: Edgecombe County Manager discusses human services consolidation

Triad Business Journal: Can Greensboro learn from Raleigh about how to build a performing arts center?

GoUpstate.com: Shutterfly moving facility, 600 jobs from NC to SC

Charlotte Observer: Bank of America declines to confirm job cuts

Daily Southerner: LGC rules Princeville rehiring illegal

PA Times: Social Media, Government Engagement, and Generation Y

Triangle Business Journal: UNC to offer MPA Program Online

Training Opportunities

Here’s information on upcoming online training events

October 10th – 2pm ET – FREE – Governing Magazine presents “Streamline Budgeting: Break Free from Outdated Processes”

October 18th – 1pm ET – FREE – ASPA presents “Mentoring Essentials: What Every Mentor and Protege Should Know”

SOG Workshops Focus on Evaluation

SOG Workshops Focus on Evaluation

Two upcoming workshops offered by the UNC School of Government focus on developing the skills necessary to be effective and versed in evaluation and performance measurement.

Click here for workshop announcement for UNC

On August 26th, David Ammons and Dale Roenigk will lead “Practical Analytic Techniques for Local Government.” This one-day course focuses on techniques for planning, monitoring, and evaluating programs and activities. Participants will learn about a variety of easy-to-apply analytic techniques and will discuss examples of successful analysis in local governments.

Click here to register for “Practical Analytic Techniques for Local Government”

On September 9th, David Ammons will also offer “Performance Measurement 101: Designing Measures in Local Government for Accountability and Results.” This one-day workshop focuses on the fundamentals of performance measurement and the design of measures having good managerial value for strengthening local government performance.

Click here to register for “Performance Measurement 101”

Both workshops will be presented at the Knapp-Sanders Building on the UNC-Chapel Hill campus and cost $125 each per person. Use the links above to register online for each, or click here to learn more about these and other UNC School of Government training opportunities.

 

 

Summer Conference in New Bern, July 13th-15th!

Summer Conference in New Bern, July 13th-15th!

Information is now available and registration is now open for the NCLGBA Summer 2011 Conference, July 13th-15th at the Hilton Riverfront Hotel in New Bern.

Several great workshops have been planned for the conference, providing an opportunity for attendees to get valuable information and gain professional certification credits. Workshop topics include:

  • Opening panel discussion focused on leadership development through the ranks of an organization from the budget analyst level to the executive management level.  Special guests for this session include Hickory City Manager, Mick Berry and High Point Assistant City Manager Pat Pate.
  • Review of the 2011 General Assembly session and the impact of the new State budget and other legislation, provided by the NC League of Municipalities’ Karl Knapp and the NC Association of County Commissioners’ Rebecca Troutman.
  • Economic Update from Michael Walden, PhD, North Carolina State University
  • Transforming Utilities – Tips and practical examples for dramatically changing  approaches to customer service.
  • Balancing Your Budget – The Critical Role of Community Values: Presentation of a new, interactive game that focuses on the importance of selecting and using community values to determine revenue increases and budget reductions during tough times.
  • Making Grants Happen –  Presenters experienced with the arts of seeking, writing and managing grants will share what they have learned and explain how municipalities and counties can best obtain and coordinate these efforts.
  • Promoting Tourism with the Past and Present – Highlights strategic initiatives used to create a productive tourism industry, integrating recent development with the city’s historic past (off-site session).
  • Presentation on North Carolina History by Dr. Freddie Parker, North Carolina Central University.
  • Revaluation and Revenue Neutral Tax Rates – What the current economic situation means for the future of property valuations and tax collections.

To learn more about the upcoming Summer Conference, visit the information page on our website or download the (revised) information packet and registration form.

NCLGBA Winter Conference at Grove Park Inn, Asheville, December 8th-10th

NCLGBA Winter Conference at Grove Park Inn, Asheville, December 8th-10th

Click Here to view the Winter Conference Program/Agenda (Updated December 7, 2010)

NCLGBA will hold its Winter 2010 Conference on December 8th-10th at the Grove Park Inn in Asheville. This will be a great end-of-year professional development, networking and idea brainstorming opportunity.

NCLGBA Winter 2010 Conference

Grove Park Inn, Asheville , December 8th-10th

Click Here to Visit the Conference Information Page

Click Here to Download the Conference Information Packet (Includes Registration Form)

Accomodations

Grove Park Inn, Special Conference Rate of $129/night (plus tax)

Registration Fees

$135 for NCLGBA Members

$175 for Non-Members

$75 for Full-Time Students

Full registration includes Wednesday reception, Thursday & Friday breakfast, and Thursday lunch

$25/person for Wednesday Reception Guests

$25/each for NC Budget & Evaluation Certification Tests (Wednesday Morning)

Workshop Topics (subject to change)

Economic Forecast, Legislative Updates for Municipalities and Counties, Budgeting for Outcomes, North Carolina Politics, Effective Communications for Local Government Professionals, Employee Compensation Trends, Excel Workshop (focus on payroll analysis), and Mobile Workshop (featuring a tour of prominent Asheville sites)

Training Available for New Online Fiscal Analysis Tool

Last week, we posted about the launch of an online local fiscal analysis tool, available at the website of the North Carolina State Treasurer. This site utilizes the financial analysis tools developed a few years ago by the UNC School of Government and is designed to help any local jurisdiction in the state analyze and compare its fiscal condition over time and with benchmarks based on other jurisdictions. The UNC School of Government has now scheduled a series of workshops for local government staff and officials to attend to learn how they can effectively use this new resource.

The workshop introduces the financial condition model being used by North Carolina local officials to analyze the fiscal strength of their organizations. Participants will learn how to interpret and communicate their data and how the model can be used to make more informed policy decisions in local government.

Workshops will last a full day and be held on the following dates and locations across North Carolina:

September 30, 2010 – Hilton Garden Inn, Kitty Hawk

October 20, 2010 – Sheraton Imperial, Research Triangle Park

October 28, 2010 – Embassy Suites, Winston-Salem

November 4, 2010 – Biltmore Doubletree, Asheville

November 18, 2010 – Embassy Suites, Concord

December 9, 2010 – Hilton Riverside, Wilmington

Registration for each workshop is $225 per person.  Registration is available online. If you have any questions, please contact Deidre Lewis, Program Manager (Click to call, or call 919-966-4171).

Performance Measurement, Analytics Workshops from David Ammons & UNC School of Government

This August thru October, the UNC School of Government will be offering workshops for public administration professionals designed to help improve performance measurement and analytic presentation skills.  These workshops are developed and coordinated by Dr. David Ammons, the Albert Coates Professor of Public Administration and Government at UNC and a recognized leader in the field of local government performance measurement and benchmarking.

The following courses are available for registration online through the UNC School of Government (click on one to register):

(August 27th) Performance Measurement 101: Designing measure in local government for accountability & results ($125 per person)

(October 1st) Performance Measurement 201: Using performance data to improve local government operations ($125 per person)

(September 17th) Practical Analytic Techniques for Local Government ($125 per person)