St. Louis Fed: Moderate Optimism For Region's Economy
A new report from the Federal Reserve Bank of St. Louis shows two-thirds of businesses surveyed are moderately optimistic about the St. Louis region's economic outlook in 2015.
The increased confidence comes in part from what the St. Louis Fed's Burgundy Book calls a "noticeable acceleration" in the number of new jobs from the second to the third quarters of this year, a growth in nonfarm jobs of 1.5 percent. About 35 percent of businesses expect employment will continue to rise as compared with last year, and about 60 percent say it will stay the same.
The unemployment rate for eastern Missouri and southern Illinois also dropped by .5 percent to 6.3 percent, the lowest level since mid-2008.
In general, the report found businesses in Missouri were "more optimistic about manufacturing conditions in the fourth quarter than the same time last year." Statewide, manufacturing jobs grew by 1.8 percent, while it only grew slightly in eastern Missouri and southern Illinois. However, both saw manufacturing exports grow, led by petroleum and coal in Missouri and printing and primary metals in Illinois.
But not all of the economic news from the third-quarter was bright. The St. Louis Fed reports that personal income growth rates are essentially unchanged from last quarter and hourly earnings growth remains slow. Household debt from mortgages and credit cards also increased for the first time since mid-2009, though the delinquency rate here remains below the national average.
The report also noted the destruction of property at local businesses and a decline in sales due to riots and looting after the grand jury decision in the Michael Brown case. It also said businesses expect holiday sales to continue to slump as a result.
The housing market also slowed. Home prices are up compared with last year but are growing at a slower rate, and home sales overall have declined. However, asking rents in the apartment market have reached new highs, and commercial construction is "active."
Additionally, due to a bumper crop this year, the report said agricultural prices have dropped and net farm income is expected to decline in the near term.