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Mississippi Economic Outlook

Mississippi Economic Outlook. Presented to the Mississippi Association of Community and Junior Colleges June 2013 Mississippi University Research Center Mississippi Institutions of Higher Learning Bob Neal, Senior Economist bneal@mississippi.edu (601)432-6143. Highlights.

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Mississippi Economic Outlook

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  1. Mississippi Economic Outlook Presented to the Mississippi Association of Community and Junior Colleges June 2013 Mississippi University Research Center Mississippi Institutions of Higher Learning Bob Neal, Senior Economist bneal@mississippi.edu (601)432-6143

  2. Highlights • US economy is growing • Remain in a slow growth mode • Housing and vehicle sales are bright spots • Recent economic news has been more mixed, entering another summer lull • MS Economy growing • Late 2012 employment growth strongest since recovery began • But slower than Nation, and like Nation, growth has softened recently • Uncertainty/ low confidence • Lack of clarity on fiscal policy • New regulation • High debt levels • Payroll tax hike/Sequester • Slow Global economy • IHS-Global Insight gives a 20% risk of recession MS University Research Center, IHL

  3. National trends MS University Research Center, IHL

  4. Annualized Quarterly Growth in Real GDP The up-down-up pattern is largely due to technical reasons (Inventory correction, defense spending, Hurricane Sandy) MS University Research Center, IHL

  5. US Jobs Added (Subtracted) By Month While average monthly gain in 2013 is 195,750, in three of the first four months, gain was less than 166,000 per month. MS University Research Center, IHL

  6. US Nonfarm Employment Peak-to-trough loss 8.8 million jobs or 6.4%. Gains since trough 5.7 million jobs. We remain 2.2% below peak. MS University Research Center, IHL

  7. Institute For Supply Management Indices An ISM Index above 50 says the industry is expanding. Below 50 indicates a contraction. Manufacturing is contracting, Nonmanufacturing has declined in 2013, but improved modestly in May. MS University Research Center, IHL

  8. Real US Retail SalesAdjusted for Inflation Retail sales remain relatively modest. Consumers spending has been relatively slow in 2013. MS University Research Center, IHL

  9. US Light Vehicle Sales Light vehicle sales have been a bright spot in the economy with average sales of 14.4 million units in 2012. For the first 5 months of 2013, the average has been 15.2 million units per month. MS University Research Center, IHL

  10. Weekly U.S. Regular Retail Gasoline PricesDollars Per Gallon Because of limited incomes, high gasoline prices hit Mississippians especially hard and have a dampening effect on discretionary spending. MS University Research Center, IHL

  11. US Consumer Sentiment Improved But Historically Low MS University Research Center, IHL

  12. National Federation of Independent Businesses Optimism Index The Index plummeted in November and while it has improved in 2013, it remains relatively weak historically. MS University Research Center, IHL

  13. Year-Over-Year Growth in Real Personal Income Less Transfer Payments by Quarter Declines are characteristic of recessions. Growth trended downward in 2011 and early 2012, but did not go negative. Growth improved in late 2012, but has fallen in 2013. Gray Areas Represent National Recessions. MS University Research Center, IHL

  14. Mississippi trends MS University Research Center, IHL

  15. MS Index of Coincident Indicators The MSCI has risen for 9 consecutive months. But the momentum has softened in 2013 as evidenced by the growth over the prior year. The Mississippi Index of Coincident Indicators reflects economic conditions existing in a given month. The index is constructed by the Federal Reserve Bank of Philadelphia and re-indexed to 2004. The Index is based on changes in nonfarm employment, the unemployment rate, average manufacturing workweek length and wage and salary disbursements. MS University Research Center, IHL

  16. Regional ComparisonApril Coincident Index as Percentage of Pre-recession Peak MS University Research Center, IHL

  17. MS Index of Leading Indicators The Index suggest another summer lull. The six-month growth rate turned negative April. The Mississippi Index of Leading Indicators reflects economic conditions expected for the coming months. The index is constructed by the University Research Center and indexed to 2004. There are 8 components of the Index: MS Initial Unemployment Claims; MS Income Tax Withholdings; MS Value of Residential Building Permits; MS MFG Employment Intensity Index, MS Diesel Fuel Consumption Index; ISM Index of US MFG Activity; US Consumer Expectations Index and US Retail Sales. MS University Research Center, IHL

  18. MS Nonfarm Employment 1,161.9 Feb 08 1,162.1 May 00 1,110.9 Jun 03 1,119.3 Apr 13 Jobs have been slow to return to Mississippi following the “Great Recession”. Growth began to improve in late 2012. MS University Research Center, IHL

  19. Employment IndexDecember 2007 = 100 MS University Research Center, IHL

  20. MS Employment Trends By Major Industry MS University Research Center, IHL

  21. MS Real Income Tax WithholdingsSix Month Moving Monthly Average Growth Over Prior Year CY 2011 -0.7% CY 2012 3.2% CY 2013 To Date -0.5%. MS University Research Center, IHL

  22. MS Diesel Fuel Consumption IndexSix Month Moving Monthly Average Growth Over Prior Year The negative growth of this measure is disturbing suggesting a declining trend in goods transported. MS University Research Center, IHL

  23. MS Residential Building PermitsThree Month Moving Average Number of Units Permits remain relatively weak. MS University Research Center, IHL

  24. MS Construction Employment MS construction employment remains relatively weak MS University Research Center, IHL

  25. MS Gaming RevenueThree Month Moving Average, NSA MS University Research Center, IHL

  26. MS Unemployment ClaimsThree Month Moving Average MS University Research Center, IHL

  27. MS Manufacturing Workweek LengthThree Month Moving Average MS University Research Center, IHL

  28. OUTLOOK MS University Research Center, IHL

  29. Growth In Real US GDPHistorical and IHS Global Insight Baseline Projections MS University Research Center, IHL

  30. Growth In Real MS GDPHistorical and University Research Center Projections MS University Research Center, IHL

  31. Highlights • The US economy is growing but lacks momentum • Housing and vehicle sales remain the brightest spots • We expect a slow upward climb in growth • The MS economy is growing as well, but slower • We expect 2013 to be an improvement over 2012, but historically slow • Factors limiting growth in 2013 and beyond • Expiration of the payroll tax cut • Sequester • Low level of confidence • Increased regulatory environment • Slow global economy • IHS-Global Insight gives a 20% risk of recession MS University Research Center, IHL

  32. If you would like to receive our publications, send your request to dwebb@misssissippi.edu Mississippi Business - Monthly Mississippi Outlook - Quarterly

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