November 2011

December 1st, 2011 by Daniel Lee

Manufacturing a drag on recovery

 

In October, the Coos Index fell for the fifth month in a row on a monthly year-over-year basis. Three out of four available component indicators were down from prior year (October report for Saturday traffic counts has not been released yet). Estimated rooms and meals revenues series was the only indicator that was up from a year ago, indicative of a strong hospitality industry. However, stagnant Saturday traffic counts suggests otherwise. The mixed picture demonstrates that fewer tourists brought in more revenues and that there has been a shift to high end market in the region’s hospitality industry. It may also suggest struggling smaller players, which cater to low to middle income tourists. The County’s other indicators continued on the downward trend. In particular, industrial electricity sales saw a steep decline, indicative of the struggling manufacturing sector. The labor market showed no signs of improvement; both number of employed residents and estimated wages and salaries kept on falling on a year-over-year basis. The Index was computed assuming no change in Saturday vehicle traffic counts from September.

The State economy fared better. Its monthly year-over-year growth rate increased for the first time since March. Three of four available indicators were up from prior year. The labor market showed signs of improvement; the monthly year-over-year growth rate of number of employed residents rose two months in a row after falling four straight months. The hospitality industry seemed to have done better as well; estimated rooms and meals revenues remained up from a year earlier. However, the manufacturing sector contracted; the monthly year-over-year growth of industrial electricity sales fell for the first time since the end of the latest recession. The weakening manufacturing sector became a drag on the economy.

The real estate market analysis can be found at the end of this report.

November 2010

December 1st, 2010 by Daniel Lee

Contents

  1. Reviving hope for recovery?
  2. Coincident Index
  3. How strong are the forces of change?
  4. Household Employment
  5. Home Sales
  6. Rooms and Meals Revenues
  7. Traffic Counts
  8. Wages and Salaries
  9. Industrial Electricity Sales
    1. Month-to-Month Comparison vs. Year-over-Year ComparisonInterpreting economic indicators may not be as easy as it might seem. This is particularly true when dealing with regional indicators that tend to be highly volatile. The month-to-month changes can be very volatile and may not represent true changes in economic conditions. To reduce the volatility and better detect the underlying trend in the economy, economists often use the year-over-year percent changes. However, this year-over-year percent comparison has a problem of its own. It doesn’t tell us anything about what happened between a year ago and the current period. It misses out the most recent changes in the economy. The recent changes should be reflected in the month-to-month percent changes. The bottom line is that one should be careful in interpreting economic indicators and should examine both the month-to-month changes and the year-over-year changes to get a good sense of what is happening in the economy. In addition, one should also apply the 3 Ds principle in interpreting economic indicators. The 3 Ds are duration (how persistent the change has been), diffusion (how widespread the change is) and depth (how large the change is). Refer to “How should economic index be interpreted?” on the About page.Leading IndicatorsThis section is under construction. The future reports will include building permits, initial unemployment claims, new business formation, real estate indicators and possibly freight volumes.Technical Notes

Reviving hope for recovery?

 

The November report reflects the traffic counts series, which was revised to improve its conformity to the business cycle. In October, the Coos economy showed encouraging signs for recovery. The Coos Index was up from where it stood a year ago for the first time since April. The labor market seemed to have gained some strength; the number of employed residents expanded two months in a row on a year-over-year basis. The hospitality industry did better than a year ago, although it wasn’t nearly enough to boost the business owners’ confidence in the industry. Both the estimated rooms and meals revenues and the average Saturday vehicle traffic counts marked higher than where they were a year ago. The only blemish in the news was the housing sector. Home sales remained nearly half the October 2009 level.

Likewise, the revised data revealed that the State economy remained strong. The State Index advanced for the seventh month in a row on a year-over-year basis. For the second consecutive month, it posted a 1.7% gain, the largest since the beginning of the recession. The steadily improving labor market was most impressive. The number of employed residents expanded six months in a row on a year-over-year basis at an increasing pace. However, the stumbling housing market remained as a threat to recovery. Home sales took a step backward after having recovered from hiccups after the expiration of the federal home buyer tax credit.