INDEX OF ECONOMIC ACTIVITY FOR HUMBOLDT COUNTY
Professor
Erick Eschker, Director
Jessica Digiambattista, Assistant Editor
Garrett Perks, Assistant Analyst
Note to readers: I want to welcome two new members to the Index
team. Jessica Digiambattista is the new Assistant Editor with
primary responsibility for writing and layout. Garret Perks is
the new Assistant Analyst with primary responsibility for data
management. Ceema Feizollahi, the outgoing Managing Director, did
a great job during her time working on the Index and will now devote
her abilities and efforts to other areas. -Dr. Erick Eschker
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| Index |
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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110.1 |
1.1 |
1.6 |
-0.9 |
-1.8 |
0.2 |
4.3 |
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18.4 |
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101.5 |
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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 9/30 |
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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.
In August, the
overall composite index rose to 110.1, up 1.1 percent from July's
revised index of 109.2. Only retail
sales and electricity consumption registered positive growth, yet the
increases were strong enough to pull the composite upward. Retail sales
rebounded from last month's drop to gain 11.7 points. This is a 10.6
percent increase over July's index level. The electricity consumption
index had an estimated increase of 3.9 percent from July's level to
stand at 121.17. Traditionally the largest home sales month in Humboldt
County, August sales failed to meet expectations. The home sales index
decreased 9 percent from July's level to stand at 117.28. The county
unemployment rate dropped significantly from 6.4 to 5.6 percent, as the
labor force shrank and the total number of jobs increased. However,
when seasonally adjusted the employment index actually dropped by 7
percent to stand at 102.9. Summertime usually brings steady levels of
tourism to the northcoast. These expectations of high occupancy rates
in the hospitality sector were not met this month. Consequently the
seasonally adjusted hospitality index decreased by 1.1 percent to stand
at 101.5. The lumber-manufacturing sector has conceeded
some of the gains from the 14.4 percent leap back in June.This
index fell 1.7 percent from July's level to stand at 82.1.
Seasonally adjusted
home sales fell this
month to 117.28. This is a more
than
11.5 point decrease from July's index level. This
represents a 9 percent decrease in the home sales index compared to the
previous month. The month of August usually has the highest home
sales of the year. Expectations were not met and the total number of
home sales actually decreased from July to August.
The
median home price in Humboldt County fell slightly in August to
$212,450. This is a 1.2 percent decrease over July's record breaking
price of
$215,000. Statewide home prices continued to rise,
setting a record high median home price of $404.870. This is a 5.6
percent
increase in price
over the previous month. "Consumers' concerns about the recent up-tick
in the mortgage interest rates pushed sales into record territory last
month as buyers jumped into the housing market," said C.A.R. President
Toby Bradley. "The median price of a home broke the $400,000 mark for
the first time is history, increasing to a record of $404,870 in
August." Nationally the median existing home price fell slightly
to $177,500, a 2.5 percent decrease over the previous month. The
national median price for new homes also fell in August, decreasing 3.7
percent to $184,500.
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 affodability index fell 3 points to stand at 28.
According
to the country's largest mortgage company, Freddie Mac, the nationwide
average for a 30-year fixed rate mortgage as of October 2nd, was 5.77
percent with an average 0.6 points. Last year at this time, the average
rate was 6.01 percent. (www.freddiemac.com)
The Commerce Department reports that national August retail sales were up 0.6 percent from the previous month's level, and up 5.3 percent from August 2002. The increase was led by strong activity in retail trade, electronics and appliances, and food services and drinking places.
The
Conference Board's Consumer Confidence Index, which had rebounded
in July, dropped again in August. The measure, which now stands at
76.8, is down 4.9
points from the previous month. "The lack of improvment in labor
market conditions continues to dampen consumers' spirits," says
Lynn Franco, Director of The Conference Board's Consumer Research
Center. "Despite September's retreat, consumers remain cautiously
optimistic about the outlook for the next six months. Consumer spending
is likely to continue at or near current levels."
(www.conference-board.org)
The Federal Reserve Bank's Beige Book
notes an improvement in sales in the western region of the country.
This is due in large part to dealer incentives on automobile sales and
the demand for appliances accociated with increases in the housing
market. Stronger sales prompted a large national retailer to resume
construction plans for new stores in the Pacific Northwest.
(www.federalreserve.gov)
August
is traditionally the peak of the tourist season when occupancy levels
are the highest. Although average
occupancy at participating hotels, motels and inns increased to 85.1
percent, expectations were not met. The
seasonally adjusted index number for the sector decreased 1.1
percent
to
stand at 101.5.
|
(as of 9/16) |
(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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Estimated August
consumption of electricity rose a seasonally adjusted 3.9 percent from
the previous month.
In the news, the second annual Humboldt
County Solar Homes Tour took place on Saturday October 4th. Seven homes
and buildings throughout the community that use solar power to offset
fossil fuel generated power were on display. The self-guided tour seeks
to bring increased awareness about viable alternative energy sources.
(Times-Standard)
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 August, the EDD reported that 56,800 people were employed in Humboldt County. This is a 0.4 percent increase over July's revised figure, indicating a net gain of 200 jobs. However, this increase did not meet expecations and the seasonally adjusted index actually fell by 0.7 percent to stand at 102.9.
Sectoral changes in Humboldt County employment:
Humboldt County's
unemployment rate has dropped below the state and national rates.
August's unemployment
rate for Humboldt County (not seasonally adjusted) decreased
eight-tenths of a point from July's figure of 6.4 percent to a
preliminary 5.6 percent.
Meanwhile,
the state and national rates (not seasonally adjusted) also dropped to
6.5 percent and 6.0 percent respectively.
The
preliminary August index value for this sector fell slightly by 1.7
percent from the
previous month to stand at 82.1. Although the index fell, an increase in
the four month moving average signals a possible turnaround.
National
manufacturing output in August, as measured by the Institute of Supply
Management, grew for the second consecutive month. The current ISM
Index
level of 54.7 is an increase of 2.9 percentage points when compared to
51.8 in July (a number higher than 50 indicates growth). Norbert
J. Ore, C.P.M.,
chair of the Institute for Supply Management says "The manufacturing
sector showed improvement for the second month as the PMI is at its
highest level since December of last year. Though two months of growth
do not establish a trend, there is strength in the various segments of
this report that we have not seen for some time. New Orders and
Production have both been above 50 percent for four consecutive months;
the continuation of a second half recovery appears on track."
(www.ism.ws.cfm)
The wholesale price of lumber has risen
sharply in the past month driven by tremendous demand. New home
starts are up this month and builders are demanding more lumber
products. The need to rebuild in areas hit by hurricane Isabel has also
increased demand. Possibly the largest force to affect lumber prices in
August was the U.S. military. The Defense
Logistics Agency purchased $50 million of lumber to send to Iraq for
force protection purposes. (San Francisco Chronicle, September 6) This
huge spike in demand helped drive prices even higher.
Employment-Based Economic Indicators:
The leading indicators for Humboldt County's economy are showing mostly positive signals for future economic growth. Seasonally adjusted help wanted advertising increased by 21.5 percent in August, signaling a possible increase producer confidence. The improved job market conditions are also reflected in a seasonally adjusted 27.3 percent decrease in unemployment insurance claims. Positive signals also came from the manufacturing industry as seasonally adjusted advanced orders jumped 6.2 percent from July's level. The only leading indicator to send negative signals is building permits, which had a seasonally adjusted decline of 12.8 percent from July's level.
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.
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 3.3 percent during the second quarter. This is a revision from the preliminary estimate of 3.1 percent. The GDP growth was led by strong increases in personal consumption expenditures, defense spending, and nonresidential fixed investment. Personal consumption expenditures experienced real (seasonally adjusted annualized) growth of 3.8 percent in the second quarter. Federal government spending increased significantly in the second quarter with real (seasonally adjusted annualized) growth of 45.8 percent in national defense expenditures. Non-residential fixed investment experienced real (seasonally adjusted annualized) growth of 7.3 percent. (bea.doc.gov)
In Cancun,
World Trade Organization talks collapsed over disagreements on
agricultural subsidies. This meeting of the Doha round of trade
negotiations was supposed to promote freer trade among developing
nations and reduce agricultural subsidies in the developed nations. The
World Bank estimates that successful negotiations would increase global
income by $500 billion each year by 2015. Alliances of developing
nations demanded significant reductions in subsidies to U.S. and
European Union farmers. Prodded by agricultural interests on their home
turf, the U.S. and E.U. were reluctant to conceed on the issue of
subsidies. The talks ended abruptly when it was apparent that no
resolution could be reached.
| 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. This month's report reflects data gathered from the previous month, and so 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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