INDEX OF ECONOMIC ACTIVITY FOR HUMBOLDT COUNTY
Professor
Erick Eschker, Director
Jessica Digiambattista, Assistant Editor
Garrett Perks, Assistant Analyst
|
|
|||||||
|
|
|
||||||
| Index |
Seasonally Adjusted Index Value (1994=100) | Previous Month | Same Month 2002 | Same Month 2001 | Same Month 2000 | Same Month 1999 | Same Month 1998 |
|---|---|---|---|---|---|---|---|
|
|
107.1 |
-3.8 |
-0.4 |
3.9 |
-3.8 |
-4.0 |
-0.8 |
| Sector |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.2 |
|
|
|
91.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|---|---|---|---|
| Humboldt County | Seasonally Adjusted |
|
|
| Median Home Price* |
|
Help Wanted Advertising |
|
| 30 Yr.
Mortgage Rate as of 12/31 |
|
Building Permits |
|
| Average Hotel Occupancy Rate |
|
Unemployment Claims |
|
| Unemployment Rate** |
|
Manufacturing Orders |
|
| * Home price data are provided by the Humboldt Association of Realtors. MLS is not responsible for accuracy of information. The information published and disseminated by the Service is communicated verbatim, without change by the Service, as filed with the Service by the Participant. The Service does not verify such information provided and disclaims any responsibility for its accuracy. Each Participant agrees to hold the Service harmless against any liability arising from any inaccuracy or inadequacy of the information. | |||
| ** Preliminary EDD data (not seasonally adjusted). See the EDD Website for updates. | |||
The Index of
Economic Activity for Humboldt County measures changes in the local
economy using data from local businesses and organizations. The data
are compiled into a seasonally adjusted index that shows changes
relative to the base month (January 1994). The composite
index is a weighted combination of six individual sectors of the local
economy. The current Index is
based on the most recently available data, which is generally data from
the previous month.
The local economy tumbled
downward in November. The composite Index dropped 3.8 percent to 107.1.
Home sales which had been at record breaking levels dropped 12.0
percent to 129.76. This comes despite historically low interest rates
and positive signals from the home sales leading indicator. Holiday
shoppers didn't quite meet retailer's expectations in November. The
retail sales Index dropped 0.9 percent to 139.9. Although the retail
sales Index fell from the previous month, the Index is 3.8 percent
higher than November 2002, and 15.3 percent higher than November 2001.
An early start to the winter season attracted tourists away from the
North coast. The hospitality Index fell 7.2 percent to 91.8.
Electricity
consumption was virtually unchanged with a slight decrease of 0.1
percent to 110.73. The employment Index which had been on an upward
trend made a slight turnaround in November, dropping 0.4 percent to
103.9. Despite the huge gains in the national manufacturing sector,
local manufacturing took a nose dive. The manufacturing Index dropped
14.8 percent to 78.3.
With uncertainties about the state budget
deficit and future budget cuts, consumer's expectations have grown
dreary. Humboldt County's labor force has a high percentage of state
and local government workers. The County also has a large college
population. Both groups are facing financial cuts the upcoming fiscal
year. Fears of layoffs and tuitions increases could be prompting
consumers to spend less in anticipation of the budget cuts.
The
November seasonally adjusted
home sales index plummeted 12.0 percent from the previous month to
stand at 129.76.
The
median home price in Humboldt County dropped to $215,000 in November.
Statewide
home prices resumed an upward trend after a slight decrease last month.
In November, the median home price in California jumped 17.8 percent to
$386,760. "The Southern California and Central Valley real estate
markets were very strong last year, and 2003 has been no exception,"
said Leslie Appleton-Young, C.A.R.'s vice president and chief
economist. "This year, San Francisco Bay Area sales are up dramatically
compared to the second half of last year, which has propelled the
statewide market into record high sales territory over the past few
months." (www.car.org) Nationwide home prices leveled off. The
national median existing-home price was $170,900 in November, down
from $172,400 the previous month. David Lereah, NAR's chief economist,
said 2003 easily will be the high-water mark for the housing sector.
"The last five months have been the strongest on record for
existing-home sales. Although sales in November were off from recent
peaks, last month's pace is a very respectable number," he said. "The
market is being driven by low interest rates, a growing job market and
a rising number of households. We will continue to see strong sales
going forward, with 2004 likely to be the second-best year on record."
(www.realtor.org)
The Humboldt Association of
Realtors' Housing
Affordability Index represents the percentage of Humboldt County
households that could afford to purchase a median priced home. In the
most recent release, the affordability index remained at the record low
26
percent. This low percentage means that home ownership is less likely
for
income-earners and first time home buyers in Humboldt County.
According
to the country's largest mortgage company, Freddie Mac, the nationwide
average for a 30-year fixed rate mortgage as of January 1st, was 5.85
percent with an average 0.7 points. This is a decrease over last
month's rate of 6.02 percent. With inflation still at bay, it appears
as though the Fed will not raise interest rates until after the first
half of 2004. "The
economy is ending the year on a modest but upbeat tone. Interest rates
cannot rise too quickly any time soon, because the inflation indicators
have been declining. But interest rates cannot fall by too much either,
because consumer spending is still quite strong," said Amy Crews Cutts,
Freddie Mac deputy chief economist. "And for the year as a whole,
interest rates for 30-year fixed-rate mortgages were the lowest since
Freddie Mac began its survey in 1971."
(www.freddiemac.com)
The Commerce Department reports that national November retail sales were up 0.9 percent (±1.0%) from the previous month and up 6.9 percent (±1.0%) from November 2002. The increase was led by retail trade, electronics and appliances, and building material and garden equipment sales.
The
Conference Board's Consumer Confidence Index slipped after a 10 point
increase last month. The measure, which now stands at 91.3,
is down 1.2 percentage points from the previous month's revised number.
“The improvement in consumers’ expectations signals healthy economic
growth in 2004,” says Lynn Franco, Director of The Conference Board’s
Consumer Research Center. “But job worries continue. Consumers’
lackluster assessment of current conditions reflects continuing anxiety
about labor market conditions. While consumers expect the job situation
to improve in the months ahead, until a significant turnaround takes
place, consumers’ optimism about current-day conditions will continue
to lag behind their expectations.”
(www.conference-board.org)
The
Federal Reserve Bank's Beige Book reported strong economic growth in
the
western region of the country. Holiday discounting at large retailers
helped to keep inventories low
in November. Automobile sales continued to slow as
dealer incentives were cut back even further. Many dealerships in the
western region have accumulated large inventories. These dealers may
give beginning of the year incentives
until they sell off some of the accumulated inventory.
(www.federalreserve.gov)
Cold
and rainy weather helped to keep tourists away in November. Humboldt
County's hospitality sector dropped 7.2 percent to 91.8. The drop more
than erases last month's gains.
According
to the Federal Reserve Bank's Beige Book, vacationers flocked to the
snow capped Sierras as early snows helped to boost winter tourism for
California's mountain resorts. Hawaii also reported an increase in
domestic tourism as many Americans escaped the winter weather on
Hawaii's warm beaches.
|
(as of 12/16) |
(cents/gal.) |
||
|---|---|---|---|
| Eureka |
|
|
|
| Northern CA |
|
|
|
| California |
|
|
|
| Current average price per gallon
of self-serve regular un- leaded gasoline as reported by the American Automobile Association's monthly gas survey (www.csaa.com). |
|||
In
November seasonally adjusted estimates of electricity consumption fell
0.1 percent to stand at 110.73.
The index value of the employment sector
is based on seasonally adjusted total employment as reported by the
Employment Development Department.
In the preliminary report for November, the EDD reported that 58,700 people were employed in Humboldt County. This is a 0.3 percent decrease over October's revised figure, indicating a net loss of 200 jobs. This dip in employment comes after a gain of more than 1,000 jobs in the previous month. The employment data pushed the employment Index down 0.4 percent to 103.9. The total civilian labor force remained unchanged at 62,300.
Sectoral changes in Humboldt County employment:
Humboldt County's unemployment rate
increased slightly, and is higher than the national average for the
first time since July. However, local unemployment is still
significantly lower than the statewide average. November's preliminary
unemployment rate (not seasonally
adjusted) edged upward 0.3 percentage points to 5.8. This
increase in unemployment comes in spite of good national economic news
and falling state and national unemployment rates.
The
preliminary November index value for this sector plummeted 14.8 percent
from
the previous month to stand at 78.3. This huge drop comes after
positive gains in lumber manufacturing during the last two months.
National
manufacturing output, as measured by the Institute of
Supply
Management, grew significantly in November. The ISM
Index
level rose 3.4 percentage points this month and is currently at 66.2
percent (a number
higher than 50 indicates growth). "With the PMI growing at an
accelerating rate, the manufacturing sector enjoyed its best month
since December 1983," said Norbert J. Ore, C.P.M., chair of the
Institute for Supply Management. "Much of the momentum is in New
Orders, as the Index is the highest reported reading since July 1950.
The strength in December's data provides significant encouragement for
prospects in the first quarter of 2004."
(www.ism.ws.cfm)
Employment-Based Economic Indicators:
The leading indicators for Humboldt
County's economy are giving positive signals for future economic
growth. Help wanted advertising dropped 20.1percent. However when
adjusted with a four month moving average the help wanted leading
indicator rose slightly. Initial unemployment claims rose 12.7 percent.
However when adjusted with a four month moving average the unemployment
leading indicator continued downward. The unemployment leading
indicator has been trending downward since July of 2003. Building
permits rose another 4.8
percent. The
manufacturing industry leading indicator remained unchanged. When
adjusted with a four month moving average, the manufacturing leading
indicator rose slightly.
A count of help-wanted ads indicates the number of new job openings.
Claims for unemployment insurance indicate the number of newly unemployed people in Humboldt County. Thus the number of new unemployment claims is a negative indicator of economic activity.
Manufacturing Economic Indicator:
Manufacturing orders are a leading indicator of activity and employment in the County.
Home Sales Economic Indicator:
Single
and multiple unit residential and commercial building
permits
from municipalities and unincorporated county areas are
a leading indicator of future home sales.
National Economic News
The
latest news release from the U.S. Bureau of Economic Analysis states
that
the revised third quarter gross domestic product (GDP), which measures
the total value of the
nation's output of goods and services,
grew at a seasonally adjusted annual
rate
of 8.2 percent during the third quarter. This number was unchanged from
last month's preliminary third quarter estimate of 8.2 percent. The GDP
growth was led by
strong
increases in personal consumption expenditures, residential fixed
investment, equipment and software, and exports. Personal consumption
expenditures were revised to a real (seasonally adjusted annualized)
growth rate of 6.9 percent
in the third quarter. This was lead by tremendous growth in durable
goods consumption. Equipment and software was revised to a real
(seasonally adjusted annualized) rate of 17.6 percent.
Residential fixed investment was revised to a real
(seasonally adjusted annualized) growth rate of 21.9 percent. Exports
were revised to a real (seasonally adjusted annualized) rate of 9.9
percent.
(bea.doc.gov)
State and Local Spotlight
Governor Schwarzenegger signed legislation on
December 12, 2003, that will put two budget proposals on the March
ballot. The first proposal is the sale of $15 billion in bonds to ease
the current deficit strain. The second proposal would require a
balanced budget each fiscal year. The proposal would also create a
reserve to fund spending during economic downturns. The Governor is
still making cuts to the budget for the upcoming fiscal year which
begins on July 1. Some predictions for the 2004/2005 fiscal year show a
budget deficit of up to $14 billion. (cnn.com)
Entrepreneur
Marcus Brown is raising funds to open a tourist train excursion around
Humboldt Bay. Brown hopes to have the Humboldt Bay Excursion Train up
and running within four years. He also has plans for a Timber Heritage
Museum and gift shop. Brown is optimistic about receiving the necessary
donations for his non profit endeavor. The North coast's other tourist
train, the Mendocino County Skunk Train, went bankrupt earlier this
year. The Skunk Train was recently purchased by Sierra Railroad
Company. The company plans to revitalize the Skunk Train which runs
from Willits to Fort Bragg. Brown believes that the Humboldt Bay
Excursion Train will attract tourists who want a shorter ride than the
four hour Skunk Train ride. A study conducted for this project
indicates that there is a market of 35,000 to 50,000 people each year
who would ride a tourist train around Humboldt Bay. (Eureka Times
Standard)
| Explanatory Note: For those of you who are new or less familiar with the Index, we have been tracking economic activity since January 1994. The composite indices plotted as blue and green lines in the diagram at the top of this page are weighted averages of each of the six sectors described in the table above. Each sectoral index, and the composite index, started at a value of 100 in 1994. Thus if the retail sectoral index value is currently 150, that means that (inflation-adjusted) retail sales among the firms that report data to us are 50 percent higher than in January 1994. We also seasonally adjust each sector, and the composite index, to correct for "normal" seasonal variation in the data, such as wet season vs. dry season, and so trends in the seasonally-adjusted composite index (the blue line in the diagram above) provide a better indication of underlying growth and fundamental change in the economy. Each month's report reflects data gathered from the previous month. For example, the "August 2003" report reflects data from July 2003. As is common, our initial report is preliminary, and as we receive final data we revise our reports accordingly. |
Cited References
The Eureka Times-Standard web site
The San Francisco Chronicle web site
California Association of Realtors web site
National Association of Realtors web site
American Automobile Association web site
Institute of Supply Management web page
U.S. Bureau of the Census's home page
U.S. Bureau of Economic Analysis' web page
U.S. Bureau of the Census's Economic Briefing Room web page
U.S. Bureau of Labor Statistic's web page
The
Federal Reserve Bank's Beige Book web page
The Milwaukee Journal Sentinel
Send us
your comments
Comments will be posted on our Reader
Comments page unless otherwise requested.
