Number of Employed Residents Plunged[innerindex]In June, the Coos economy set a new low. The Index declined for the first time since the end of the past recession on a monthly year-over-year basis. Four out of the five component indicators were down from prior year. The manufacturing sector contracted; industrial electricity sales fell down from prior year for the first time since March 2010. The rebounding hospitality sector struggled as well; average Saturday traffic counts had fallen at a faster clip for the last four months, while the year-over-year growth rate of estimated rooms and meals revenue edged down three months in a row. But, it was the struggling labor market that was the biggest drag on the economy. The number of employed residents, after seasonal adjustment, plunged to 13,897 from 14,879 in May. The estimated loss of nearly a thousand employed residents in the County comprised nearly half of the total estimated loss in New Hampshire, which lost 2,090 employed residents during the same period. It remains to be seen whether this is only a temporary statistical fluke. The number of recalled workers in the reopened Gorahm mill was not included in the data since the U.S. Bureau of Labor Statistics employment survey was conducted in the calendar week that contains the 12th of the month, which was before the reopening of the paper mill. However, even if it did, it would not have made up for this large loss.
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.
The Coos Coincident Index, which tracks the current state of the Coos economy, plunged to 91.1 from May’s revised value of 92.6. The Index declined for the first time since April 2010 on a monthly year-over-year basis.
The New Hampshire Coincident Index slid to 95.8 in June two months in a row. On a monthly year-over-year basis, the Index expanded for the tenth month in a row. However, its growth rate slowed two months in a row.
How strong are the forces of change?
In June, the Coos Coincident Index fell for the first time since the end of recession on a monthly year-over-year basis. Four out of the five component indicators were down from their June 2010 levels. The State Index increased ten months in a row on a monthly year-over-year basis. All five component indicators remained up from prior year. However, its growth rate decreased two months in a row.
Household employment measures the number of employed residents. In contrast to non-farm payroll employment that is more commonly used in the national and state indexes, household employment includes self-employed, unpaid domestic help and both farm and non-farm workers, all of which may be more significant in rural than urban economy. Employment tends to rise as economy grows.
Employment index, adjusted for seasonal variation, plunged in June. And, it remained down from prior year.
Employment at the state level, adjusted for seasonal variation, contracted for the second straight month. Still, it remained up from the level seen a year earlier.
Rooms and Meals Revenues
It is estimated from total tax yielded from rooms and meals sales. It tends to increase with tourism activities.
The estimated rooms and meals revenue, adjusted for inflation and smoothed by 12 month moving average, declined in June for the second consecutive month. Still, it remained up from its June 2010 level.
The estimated rooms and meals revenue, adjusted for inflation and smoothed by 12 month moving average, contracted in June two months in a row. Still, it remained up from prior year.
It tracks the average vehicle traffic counts on Saturdays each month, which is automatically collected from traffic recorders located throughout the State. Two recorders are placed in the Coos county – Jefferson and Northumberland.
Average Saturday traffic counts, smoothed by 12 month moving average, fell for the fifth consecutive month. On a monthly year-over-year basis, it dropped four straight months.
Average Saturday traffic counts, smoothed by 12 month moving average, fell seven months in a row. Still, it was higher than its June 2010 level.
Wages and Salaries
The estimated wage and salaries disbursements represent total compensation including pay for vacation, bonuses, stock options, and tips. This data is obtained from all workers covered under state and federal unemployment insurance laws; in other words, it is full population counts, not sample-based estimates. Unlike the household employment report, however, it excludes self-employed, domestic workers, and most agricultural workers. For this difference, wages and salaries series complements the number of employed residents in monitoring the labor market conditions as well as the economy. A change in wages and salaries, adjusted for inflation, may reflect changes in the number of jobs, the ratio between part-time and full-time jobs, and wage rates.
The estimated wages and salary disbursement, adjusted for inflation and smoothed by 12 month moving average, edged up from prior month. Still, it remained down from a year earlier.
The estimated wages and salary disbursement, adjusted for inflation and smoothed by 12 month moving average, inched down from May. Still, it was up from where it stood a year ago.
Industrial Electricity Sales
It measures sales of electricity (kWh) to industrial customers. Utilities categorize consumers based on the North American Industry Classification System, demand, or usages. The industrial sector includes manufacturing, construction, mining, agriculture, fishing, and forestry establishments. Among these industries, manufacturing is a primary industry in Coos County making up 69% (73% for New Hampshire in 2008) of the total number of jobs in the industrial sector mentioned above according to the 2006 QCEW data. Therefore, a rise in industrial electricity sales may largely indicate invigorating manufacturing activities in the economy.
Industrial electricity sales, smoothed by 12 month moving average, fell for the third consecutive month. As a result, it fell down from prior year for the first time since March 2010.
Industrial electricity sales, smoothed by 12 month moving average, bounced back in June. And, it remained up from where it was a year ago.
NCEI reports two real estate market indicators – home sales and median home prices. The data tracks residential homes sold, including condos and manufactured homes. The health of the real estate sector is important to the broad economy due to its multiplier effect. Home transactions not only generate income for real estate brokers and mortgage bankers but also bring more businesses in other sectors including moving services, home furnishings and appliances. In order to minimize volatility in Coos real estate market, indicators are averaged over a 12 month period.
In June, there were no signs of improvement in the Coos real estate market. Home sales, smoothed by 12-month moving average, registered another double-digit decline on a year-over-year basis. It’s the tenth consecutive decline. Falling volumes of home sales kept downward pressures on home prices. Median home prices, smoothed by 12-month moving average, fell by nearly 19% from prior year. This is the fourth consecutive decline on a monthly year-over-year basis.
A downward spiral continued in the New Hampshire real estate market. Home sales, smoothed by 12-month moving average, had fallen at an increasing pace since October on a year-over-year basis. Its effect was felt on home prices. Median home prices, smoothed by 12-month moving average, dropped five months in a row at a faster clip on a year-over-year basis.
This section is under construction. The future reports will include building permits, initial unemployment claims, new business formation, real estate indicators and possibly freight volumes.
- Employment is the number of people employed from the household survey.
- The current values of rooms and meals revenues are estimated using the data obtained from participating local hoteliers.
- The quarterly wages and salary disbursements are smoothed into the monthly series after the current values are estimated.
- These models to estimate the current values of rooms and meals revenues and wages and salary disbursements are re estimated once a year in February using updated data.
- The data series reported in the dollar values are adjusted for inflation.
- Seasonal factors for the number of employed residents are recalculated once a year in February using updated data. Thus, the seasonally adjusted data series are to be revised accordingly.
- Real Estate data is obtained from the Northern New England Real Estate Network (NNEREN). All analysis and commentary related to the statistics is that of the authors, and not that of NNEREN.
© Copyright 2010: Daniel Lee and Vedran Lelas, College of Business Administration, Plymouth State University.