INDEX OF ECONOMIC ACTIVITY FOR HUMBOLDT COUNTY
Professor
Erick Eschker, Director
Jessica Digiambattista, Assistant Editor
Garrett Perks, Assistant Analyst
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Seasonally Adjusted Index Value (1994=100) | Previous Month | Same Month 2002 | Same Month 2001 | Same Month 2000 | Same Month 1999 | Same Month 1998 |
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111.1 |
2.8 |
2.6 |
2.3 |
-0.5 |
0.2 |
1.7 |
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8.3 |
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95.7 |
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| Humboldt County | Seasonally Adjusted |
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| Median Home Price* |
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Help Wanted Advertising |
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| 30 Yr.
Mortgage Rate as of 11/28 |
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Building Permits |
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| Average Hotel Occupancy Rate |
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Unemployment Claims |
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| Unemployment Rate** |
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Manufacturing Orders |
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| * 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.
All sectors of the Index
experienced positive growth in October. The composite index value is
111.1; this is the highest level since January of this year. A slight
increase in interest rates couldn't slow the housing market this month.
The local home sales index increased 3.3 percent, and the housing
sector remained strong throughout the nation. Shoppers got an early
start on the holiday season, and local retail sales rebounded. The
retail index for October rose 1.3 percent. Tourists decided to enjoy
the last bit of sunshine before the winter rain hit the north coast.
Local hotels, motels and inns had a 1.1 percent seasonally adjusted
increase in business. Estimated electricity consumption rose 10.5
percent. Humboldt County's employment sector retains a positive
outlook. The employment index rose another 0.9 percent this
month. October was the third consecutive month that the
County's unemployment rate was below the state and national averages.
Local manufacturing also grew in October; this parallels a nationwide upward trend in manufacturing growth.
The
October seasonally adjusted
home sales index continued to trend upward to 147.47. This is a 3.3
percent increase from September and is the third highest index level
ever recorded. Though interest rates are slowly beginning to rise, home
sales
remain a strong sector of the local economy.
The
median home price in Humboldt County remained unchanged at $221,000 in
October. Statewide
home prices leveled off with a 1.2 percent decrease from September, to
stand at $381,200. "Price appreciation in California continues to
outpace that of the nation," said Leslie Appleton-Young, C.A.R.'s vice
president and chief economist. "The median price of a home in
California has increased by double digits for 23 consecutive months, a
reflection of robust demand and a tight housing market. In addition,
year-to-date sales are up 3.5 percent compared to the same period a
year ago." (www.car.org) Nationwide home prices have continued to
trend upward. In October the national median existing home price rose
8.2 percent to $172,400. However, recent record breaking home sales may
have
peaked according to David Lereah, National Association of Realtors'
chief economist. "We think this marks the beginning of a soft landing
for sky-high home sales," he said. "The last four months are the only
months on record when the existing-home sales pace exceeded the
6.0-million mark – we expect the pace to ease gradually but to remain
at historically high levels over the next year." (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 dropped to 26
percent. This is a record low for the Affordability Index. The
incredible drop 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 December 4th, was 6.02
percent with an average 0.6 points. This is a slight increase over last
month's rate of 5.94 percent. As the economy gains steam, some
economists are predicting that the Fed will raise interest rates in the
near
future. "Financial markets are speculating
about what the Federal Reserve Board will say when it meets next week,"
said Frank Nothaft, Freddie Mac chief economist. "And it looks like the
market is taking bets that the Fed will soften its language and raise
rates sooner rather than later. As a result, bond yields drifted higher
and with it went mortgage rates."
(www.freddiemac.com)
The Commerce Department reports that national October retail sales were down 0.3 percent from the previous month's level, yet up 6.1 percent from October 2002. While overall retail sales slipped, there were again sizable gains in building material and garden equipment which is up 12.5 percent from October 2002.
The
Conference Board's Consumer Confidence Index trended upward for the
second consecutive month. The measure, which now stands at 91.7,
is up 10.0 percentage points from the previous month. “Consumer
confidence is now at its highest level since the Fall of 2002,” says
Lynn Franco, Director of The Conference Board’s Consumer Research
Center. “The improvement in the Present Situation Index, especially in
the jobs component, suggests that consumers believe a slow but sure
labor market turnaround is underway. The rise in expectations is a
signal that consumers will end this year much more upbeat than when the
year began.”
(www.conference-board.org)
The
Federal Reserve Bank's Beige Book is reporting sluggish sales in the
western region of the country. An end to zero percent auto financing
was also the end to increasing vehicle sales. New car and truck sales
dropped 20 to 30 percent in October and early November.
(www.federalreserve.gov)
Humboldt
County's hospitality sector rebounded in October. The
seasonally adjusted index number for the sector increased 1.1 percent
to stand at 95.7.
|
(as of 11/11) |
(cents/gal.) |
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| Eureka |
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| Northern CA |
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| California |
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| 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). |
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In
October seasonally adjusted estimates of electricity consumption rose
10.5 percent to stand at 110.87.
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 October, the EDD reported that 59,100 people were employed in Humboldt County. This is a 2.4 percent increase over August's revised figure, indicating a net gain of 1,400 jobs. This jump in employment pushed the seasonally adjusted employment index up 0.9 percent to 104.7.
Sectoral changes in Humboldt County employment:
Humboldt County's unemployment rate
increased slightly, but remains well below the state and national
rates. October's preliminary unemployment rate (not seasonally
adjusted) edged upward 0.2 percentage points to 5.3. This slight
increase mirrors a 0.2 percentage point increase in the state
unemployment rate which now stands at 6.4 percent. Nationally
unemployment continued a downward trend to stand at 5.6 percent.
The
preliminary October index value for this sector rose 7.2 percent from
the previous month to stand at 91.9. This is the second
consecutive monthly increase in the lumber-manufacturing sector of the
local
economy.
National
manufacturing output, as measured by the Institute of
Supply
Management, grew significantly in November. The ISM
Index
level jumped 5.8 percentage points this month and is currently at 62.8
percent. (a number
higher than 50 indicates growth). "The manufacturing sector enjoyed its
best month since December 1983," said Norbert J. Ore, C.P.M., chair of
the Institute for Supply Management. "Based on this data, it appears
that the recovery is gaining momentum. Indications are that the
manufacturing sector is ending 2003 on a very positive note, and all of
the indexes support continued strength into 2004. While there are still
companies lagging the recovery, they should be encouraged by the
current indicators in the sector."
(www.ism.ws.cfm)
Employment-Based Economic Indicators:
The leading indicators for Humboldt
County's economy are giving mostly positive signals for future economic
growth. Initial unemployment claims fell 12.4 percent, continuing the
recent
downward trend. Building permits rose another 9.5
percent indicating a
continuation of the upward trend in the housing market. The
manufacturing industry leading indicator remained unchanged. However, seasonally adjusted help wanted
advertising decreased by 2.1
percent in October.
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.
Third
quarter U.S. GDP grew at a rate not seen since 1984. The
latest news release from the Bureau of Economic Analysis states that
the most recent GDP figures have been revised upward. The
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 revised up
from the preliminary estimate of 7.2 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 6.4 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 18.4 percent.
Residential fixed investment was revised to a real
(seasonally adjusted annualized) growth rate of 22.7 percent. Exports
were revised to a real (seasonally adjusted annualized) rate of 11.0
percent.
(bea.doc.gov)
Threatened
with a global trade war, President Bush ended the illegal steel tariffs
that he had signed into effect in March of 2002. The World Trade
Organization ruled last month that the Bush administration's tariffs
were in violation of global trade laws. After the W.T.O's ruling the
European Union had threaten $2.2 billion in sanctions against the U.S.
if the tariffs were not removed. (cnn.com)
Governor
Arnold Schwarzenegger was sworn into office on November 17th. With the
new governor come new policies and political appointees.
The new governor has proposed a $2 billion spending cut in the state's
budget. Locally, Humboldt County officials are trying to figure out the
impact the budget cuts will have on the county. The hardest hit will
probably be Humboldt County's Department of Health and Human Services,
which provides public and mental healthcare along with other social
services. (Eureka Times Standard) Pacific Lumber
Company executive Jim Branham has been appointed by Governor
Schwarzenegger as the second
in command at the California Environmental Protection Agency.
Environmentalists are disappointed to see a lumber industry lobbyist
chosen to help run the agency that implements environmental and water
quality regulations. (Eureka Times Standard)
Local Spotlight
The Humboldt County Economic Development Department is working on a
long term redevelopment plan that will focus on blighted areas in the
County. Eight communities (Samoa, Alton, Glendale, Redway, Manilla,
Orick, Willow Creek and Fields Landing) are candidates for the program
that seeks to revitalize economically depressed or stagnant areas.
According to Paula Mushrush at the Humboldt County Economic Development
Department, most of these communities have suffered from downturns in
natural resource based industries such as timber and fishing. The
County is seeking Brownfield grants to clean up polluted industrial
areas, such as old mill sites. Through community based workgroups
the County will help local citizens and entrepreneurs to provide a
sound economic environment to attract new businesses. Paula Mushrush
acknowledged that people are suffering economic hardships because of
past unsustainable business practices by the industries that used to
operate in their communities. When questioned about what types of
businesses may be attracted to the redevelopment areas, Paula Mushrush
seemed certain that environmentally and socially unsustainable
industries are a thing of the past for Humboldt County. The
redevelopment project has two components: 45 year plans outlining
general overarching goals, and 5 year implementation plans, designed by
the communities, that specifically direct the redevelopment process.
| 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
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