The State economy struggled to sustain a recovery. Although the State Index continued to expand on a monthly year-over-year basis, its growth rate had declined two month in a row. Four of the five component indicators fell down from prior month, while all five component indicators still remained up compared to where they stood a year earlier. It may reflect recent developments in the data that economic recovery in the State may be losing steam. The struggling labor market is particularly worrisome. The number of employed residents contracted two months in a row on a month-to-month basis. Its year-over-year growth rate has steadily declined for the second month in a row as well. The increasing number of the unemployed in the State, coupled with falling home prices, would dampen consumer confidence.
The real estate market analysis can be found at the end of this report.
In June, there was little good news for the Coos economy. It retreated on all fronts, except the estimated wage and salary. The housing sector continued to struggle without the home-buyer tax credit. The hospitality industry could not dodge the fall either. Both of its indicators – the estimated rooms and meals revenues and the average Saturday vehicle traffic – fell. Waning forces of recovery was more evident in the labor market. The number of employed residents declined three months in a row after steadily improving in the first quarter of the year. Industrial electricity sales also fell, suggesting that rejuvenated production activity in the region may be slowing too.
The State economy was sluggish. Although the State Index bounced back after slipping in May, half of the component indicators turned down. The stagnant labor market is most worrisome. The pace of increase in the number of employed residents has slowed steadily in the past four months, indicating that a turn to losing employed residents may be imminent. This contradicts the falling unemployment rate widely reported within the State as evidence supporting improving economic conditions. This decline in the unemployment rate is in essence a statistical coincidence, which has more to do with the shrinking labor force than the improving labor market. That is, many are no longer counted as “unemployed” not because they found a job, but because they stopped looking for work due to gloomy job prospects.