NCLGBA will post a collection of topics discussed in economic reports of note from financial institutions and government agencies on a regular (not necessarily weekly) basis. Here is what we’ve found recently:
Bureau of Economic Analysis
US GDP Growth Slows Down in 2nd Quarter to 1.7%
Today’s report on GDP performance for the 2nd Quarter of 2012, a benchmark for general direction of the overall national economy, reflected concerns expressed by economists of the past several months of a slowing condition. US Real GDP (indexed for inflation) grew at an annual rate of 1.7% for the last quarter. This is less than the 1.9% growth achieved in the 1st Quarter.
Economists predicted GDP growth would reside between 1.5% and 2%. This snipped from today’s BEA Press Release provides an explanation of the factors contributing to recent performance:
The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, and residential fixed investment that were partly offset by negative contributions from private inventory investment and from state and local government spending. Imports, which are a subtraction in the calculation of GDP,
AAA Carolinas/Gas Buddy
Late Summer Gas Price Spike Exacerbated by Hurricane Issac
Late spring and early summer saw a significant drop in crude oil, gasoline and diesel prices from winter and early spring highs, with prices falling about 30% between March and early July.
Unfortunately, fuel-oriented energy prices rebounded from mid-July through August, with gasoline prices increasing at a rate faster than crude and diesel because of the impact of high corn prices due to the use of Ethanol.
Now, anticipated supply disruptions created by the arrival of Hurricane Issac along the gulf coast of Louisiana and Texas is forcing additional price spikes. Today’s daily price report from AAA indicates that the national average increased 1.3% for regular unleaded compared to yesterday, with North Carolina metropolitan areas now at or close to the national average of $3.80/Gallon.
According to this comparative chart from Gas Buddy, North Carolina retail prices for regular unleaded have steadily returned upward to the national average in the second half of the summer.
While the neighboring state of South Carolina has seen price increases as well, they remain significantly below the national average. Over the long run, supply problems can force more localities to see prices move toward the national average, even with their traditional location “discount” and/or lower tax rates.
Bureau of Labor Statistics
NC Metro Nonfarm Employment Falls, Overall Employment Rises for July
Toward the end of each month (or a week or so into the start of the next month), the Bureau of Labor Statistics (along with the North Carolina Department of Commerce Division of Employment Security, a.k.a. ESC) publish employment statistics for metropolitan areas (MSAs). For July, each of North Carolina’s 14 Metropolitan Areas saw an expected decline in nonfarm payroll, and indication of softening conditions this summer with some impact resulting from public sector contraction.
Overall, the State lost 75,200 nonfarm payroll positions in July, though overall employment for the month did increase by 12,900 compared to June as a result of seasonal hires in the agriculture sector. Nine MSAs in North Carolina also saw net job growth in July, with the biggest spike witnessed in the Raleigh-Cary MSA (+8,300).
All but 2 metropolitan areas in North Carolina (Wilmington and Winston-Salem) have seen positive growth in nonfarm payrolls compared to a year ago.
MSA unemployment rates for July range from a low of 7.7% (Asheville) and 7.9% (Raleigh) to a high of 13.1% (Rocky Mount). Eight MSAs had rates higher than the statewide rate of 9.8%.
Richmond Federal Reserve Bank
Nearly 17K Private Sector Jobs Gained in NC in June
The Richmond Fed produces a narrative “Regional Update” of employment conditions of each within their District on a monthly basis, providing additional perspective on monthly employment statistics distributed the third Friday of each month by the Bureau of Labor Statistics. Here is the text of their latest update from today on North Carolina’s job picture:
Labor market indicators for North Carolina were generally mixed in July, but the underlying employment data were encouraging. Private sector payrolls swelled even as the state’s unemployment rate rose. However, the results from our Carolinas Survey of Business Activity for July were disappointing, as more respondents reported that business activity had slowed and labor demand had softened.
North Carolina’s total payroll employment (seasonally adjusted) increased by 1,800 in July — its second monthly increase in a row. However, the relatively small gain in total payrolls belies a much bigger improvement in the private sector. Private sector firms added 16,600 net new jobs to payrolls and the gains were very widespread. Leisure and hospitality employment jumped by 5,900 in July, which reversed all of the losses that the industry had experienced in the first half of the year. In fact, employment in leisure and hospitality stood at its highest level since March 2008. Manufacturing also showed an impressive increase in July, rising by 3,400 jobs. Private education and health services jobs bounced back last month from a rare decline in June. The professional and business services and the other services categories also increased notably during July. The remaining major private sector industries saw more modest gains.
The big drag on North Carolina’s payroll employment during July was the public sector, especially local governments. After trending up between July 2011 and June 2012, local government employment dropped by 14,500 last month, accounting for all of the public sector job losses. State and federal government employment was largely unchanged. Over the year, private sector payrolls were up 42,500 in North Carolina, while government employment was off by 6,600 jobs.
Looking across North Carolina, the data varied widely. Eight of the state’s 14 metropolitan statistical areas (MSAs) showed month-to-month increases in employment, with the largest occurring in the Triangle area (the combination of the Raleigh and Durham MSAs). The Greensboro-High Point MSA was not far behind, with an increase in employment of 2,700 in July. Asheville, Burlington, Greenville, Jacksonville, and Rocky Mount experienced more modest increases. By contrast, the Charlotte MSA lost about 3,000 jobs during July and total employment in the area is off by 5,400 since April. The Winston-Salem MSA also experienced substantial jobs losses in July.
North Carolina’s unemployment rate, which is based on a different survey than the payroll employment estimates, increased for the first time in a year. After coming in at 9.4 percent for three straight months, the state’s seasonally adjusted unemployment rate increased 0.2 percentage point in July to 9.6 percent. The ranks of unemployed workers swelled by a little more than 5,300 workers, even as labor force participation in the Tar Heel state continued to move lower — a trend which started in March. Our Carolinas business activity index dropped into negative territory in July for the first time since last fall. Moreover, the deterioration in current general business conditions was accompanied by continued softness in current labor demand indicators.
Economic Reports Available for Charlotte & Raleigh Metro Areas
PNC, like other national banks, has an economics division that evaluates and provides research and analysis on national and global economic conditions. PNC also prepares quarterly economic updates on a regional basis for the markets they serve across the United States. A consolidated regional report includes link to metro area reports, including new ones they’ve added to cover their expanded markets in Charlotte and Raleigh as a result of their recent acquisition of RBC Bank.
Replay information on their economic outlook conference call held August 23rd will be made available as soon as it is posted.