Contact: Bill Rubin/Jacki Bradham, St. Croix EDC, 715-381-4383
The July edition of the St. Croix Valley Economic Dashboard has been released by the UW-River Falls Center for Economic Research (CER) and St. Croix Economic Development Corporation (EDC). The dashboard is a snapshot of the economic condition of the labor, consumer and housing markets in the three county St. Croix Valley (Polk, St. Croix, and Pierce counties). It presents the latest available data in one convenient package and can be viewed on the CER’s website at http://www.uwrf.edu/CenterForEconomicResearch.
New Features: The Dashboard includes several new features this month. First, unemployment rate, total employment and labor force data has been added for both the St. Croix Valley region as a whole and the 13-county Minneapolis-St. Paul-Bloomington MN-WI Metropolitan Statistical Area (MSA). This MSA includes St. Croix and Pierce in Wisconsin and economic conditions in the MSA are an important indicator of current and future conditions in the St. Croix Valley. Second, prices received by producers of the key agricultural commodities have been included. These prices are the average price received from the sale of corn, milk and soybeans to their first buyers.
Dr. Logan Kelly, director of CER, conducts research for the Dashboard and offered his observations.
The Labor Market: “Conditions indicate continuing, slow recovery in the regional labor market. The unemployment rate declined in May by one percentage point from May 2010 to 6.4 percent. This change was driven by a 0.4 year-over-year percentage increase in total employment and essentially unchanged labor force. The region’s unemployment rate is lower than the state average of 7.4 percent and comparable to the Minneapolis-St. Paul-Bloomington MN-WI MSA unemployment rate of 6.3 percent.”
“Nationally, the data indicates that the short run risk of the recession still persists and may, at present, outweigh long run concerns over the budget deficit. The U.S. economy added 18,000 jobs in June, which is statistically indistinguishable from zero. Moreover, job creation statistics for both April and May were both revised downward. The change in total employment for April was revised from 232,000 jobs created to 217,000 jobs created, and the change for May was revised from 54,000 jobs created to 25,000 jobs created. The unemployment rate was likewise unchanged at 9.2 percent.”
“A significant driver of the national economy’s inability to create new jobs has been the loss of public sector jobs. While the private sector created 57,000 jobs nationally in June, government employment fell by 39,000 jobs (Wisconsin has lost approximately 6,000 public sector jobs between May 2011 and May 2010). This continues a trend of declining public sector employment spanning back to 2008, and the public sector remains as the only major sector of the economy to continue to exhibit consistently falling employment.”
“Decreasing government payrolls is a serious challenge to the labor market recovery because one public sector job lost can lead to additional private sector job losses or inhibit the private sector from creating jobs. This phenomenon is known as the multiplier effect. Because public sector jobs are often higher skilled, higher paid jobs, their loss causes a significant loss in aggregate income and thus spending. This spending provides income to businesses producing a wide variety of goods and services, and the loss of that income can contributing to many businesses’ reluctance to hire new workers.”
The Housing Market: “The housing market may be showing some summer strengthening, but year-over-year comparisons still indicate a grim reality. The St. Croix Valley region saw another monthly increase in median home prices and number of homes sold. While this is encouraging, neither median home price nor the number of homes sold are seasonally adjusted, thus the recent strengthening may be merely the summer home buying market increase. However, the Case-Shiller Home Price index for Minneapolis did show its first positive year-over-year change in April since June 2010.”
“Home prices in the St. Croix Valley remain significantly lower than one year ago. The median home price for the three county region in June 2011 was approximately $132,000, which is nearly 15 percent below June 2010.”
Spending: “Spending in the Valley, as measured by sales tax revenue, increased in June 2011 by 4.9% from June 2010, and new vehicle registrations in May 2011 increased by 13.4% from May 2010. Both of these metrics indicate continued economic growth despite a stubbornly slow labor market recovery and a tepid housing market.”
“Interest rates on borrowing remain low,” said William Rubin, executive director of St. Croix EDC. “Whether you’re a business looking to finance new capital equipment or a prospective home buyer, the interest rates tied to loans are low and have not changed significantly. The sixty-four thousand dollar question is the confidence to take on debt in light of the lengthy recession.”
Wisconsin’s St. Croix Valley is comprised of St. Croix, Polk, and Pierce counties. All three counties are located along the Wisconsin-Minnesota border. Two of the three counties, St. Croix and Pierce, are included in the Minneapolis-St. Paul-Bloomington MN-WI metropolitan area, a 13-county region with of population of 3.25 million residents. For additional information on the July edition of the St. Croix Valley Economic Dashboard, contact Dr. Logan Kelly at cer@uwrf.edu or (715) 425-4993 or William Rubin at bill@stcroixedc.com or (715) 381-4383.
