Minnesota Economic Indicators
by Dave Senf - firstname.lastname@example.org
Minnesota Labor Market Index
The Minnesota Labor Market Index stumbled for the second consecutive month, but June’s 0.7 percent drop was a huge improvement from May’s 4.7 percent plunge. Adjusted initial claims for unemployment decreased in June but tumbling seasonally adjusted wage and salary employment and waning adjusted weekly manufacturing hours pushed the index downward. The national index fell for the 19th straight month, corresponding to the 19th month of this recession, sliding 0.4 percent. Minnesota’s index is off 19.5 percent from the beginning of this recession in December 2007. The national index is down 22.3 percent over the same period.
United States Labor Market Index
Wage and Salary Employment
May's encouragingly small seasonally adjusted Wage and Salary Employment decline was swept away by the 19,100 jobs lost in June. June’s job cuts were the second highest monthly total in absolute terms on record, worse than all other months except for last November’s 21,400 job decline. June’s 0.7 percent payroll plunge ranks fourth worst with only November 2008, April 1975, and January 1982 recording deeper monthly job drops when measured in percentage terms.
June’s payroll crash was split evenly between goods-producing and service-providing sectors as all supersectors except trade, transportation, and utilities reported falling payrolls. Layoffs were heavy in manufacturing, construction, educational and health services, and professional and business services. June’s over-the-year job loss on an unadjusted basis spiked to 4.1 percent, the highest on record going back to 1970. The previous biggest percent drop was 3.9 percent in September 1982, two months before the end of the 1981-82 recession. The national over-the-year job loss, 4.2 percent, is also the biggest decline dating back to 1970.
Adjusted Help-Wanted Ads reverted to their long-term downward trend in June slipping 17.1 percent to another record low level. Unadjusted help-wanted ads are down 76.3 percent from a year ago as employee recruitment efforts have migrated to the Internet. Seasonally adjusted online help-wanted listings slipped 3.8 percent in Minnesota and 2 percent across the nation in June after having increased in May according to the Conference Board, Inc. No job rebound is expected before online help-wanted ad levels show a strong sustained upswing.
Purchasing Managers' Index
Minnesota’s Purchasing Managers’ Index (PMI) advanced for the third time in four months rising to 43.9 in June. Business conditions are still dreadful but appear to be gradually turning around. Minnesota’s PMI will likely continue to climb slowly through the rest of the year, but little job growth is expected before the PMI jumps above the 50 mark.
Average Weekly Manufacturing Hours
Adjusted weekly Manufacturing Hours remained near record low levels in June hovering at 38.4 hours. Minnesota’s prolonged and deep manufacturing descent during this recession appears to have leveled off, but as of June there are few signs of any near-term rebound. Longer factory workweeks will be an early indicator that the economy has hit bottom and is entering the early stages of a recovery.
Adjusted weekly Manufacturing Earnings inched up in June to $711.57, a 0.1 percent gain from May. June’s unadjusted weekly manufacturing earnings were down 0.7 percent in real terms from a year ago.
Adjusted Business Incorporations tailed off for the fifth straight month sliding to 642. This is the lowest monthly total since February 1983. Limited liability registrations, however, continue to run way ahead of last year’s pace, but the over-the-year jump has been shrinking since the start of the year. Limited liability registrations were up 127 percent from a year ago in January but only 42 percent higher than a year ago in June.
Residential Building Permits
The search for the light at the end of the tunnel for home-building activity in Minnesota has been going on for at least two years. The search continues as of June based on the 38 percent decline in seasonally adjusted Residential Building Permits reported in June. June’s dismal 354 building permits easily beat out the previous record low of 404 set in July 2008. Home sales may be showing some early signs of a slow recovery but until the inventory of unsold homes drops drastically no rebound in home-building activity should be expected.
Initial UB Claimants
About the only ray of hope in June’s economic indicators was a small drop in adjusted Initial Claims for Unemployment Benefits (UB). Initial claims crept down 1.3 percent in June to 9,410. Despite June’s initial claims decline the level of initial claims remains high suggesting that the labor market is still being hit from both sides. Layoffs are still a problem as is the weak level of hiring.