State Economic Watch

  In the July 2026 State Employment and Unemployment report, the US Bureau of Labor Statistics (BLS) cited New Jersey as the only state to see a “statistically significant” m/m reduction in nonfarm payrolls in July. The state posted a loss of 25,600 jobs (0.6%) in the month. According to the seasonally adjusted numbers tabulated by the BLS, these losses were concentrated in the Professional and Business Services (-13,400) and Leisure and Hospitality (-7,300) categories. This citation by the BLS has generated the typical press coverage , complete with political spin.  A look at the non-seasonally adjusted (NSA) numbers provides some interesting color, though. The Professional and Business category did in fact post a loss of 14,200 jobs m/m on an NSA basis, providing some support to the argument that the state’s high cost of living is driving out businesses. However, the Leisure and Hospitality sector actually added 1,100 jobs on an NSA basis, thereby supporting the claim that ...

In the August 2026 edition of its AgLetter , the Federal Reserve Bank of Chicago reports that farm values in the Seventh Federal Reserve District held steady y/y in the second quarter. As the below exhibit illustrates, the results were split, with farm values in Illinois and Iowa seeing gains, while those in Wisconsin and Indiana posted y/y losses. However, the Chicago Fed’s economists note that in real terms, farm values in the district declined 3.7% y/y in the quarter. Some lenders commented that “investment activity for data centers and solar and wind farms helped hold up agricultural land values”. The below exhibit is reproduced from the Chicago Fed’s August AgLetter . Source: Federal Reserve Bank of Chicago  

The results of Federal Reserve Bank of Kansas City’s August Services Survey indicate a weakening services sector in the Tenth Federal Reserve District. The top line composite index moved into negative territory for the first time since November 2025, falling to -3 in August from 14 in July. Similarly, the general revenue/sales index fell to 0.0 in August from 19 in the prior month. The employment indexes, employee count, part-time employment and hours worked, were all in the negative single digit range, but it should be noted that these indexes have been bouncing between single digit positive and single digit negative all year. The declines in the six-month expectations indexes were particularly grim, with the composite index falling to 5 in August from 24 in July, and the general revenue/sales index falling to 12 from 39. Finally, the employment six-month expectations indexes all moved from modestly positive to modestly negative territory. One survey respondent noted that “business ...

The Texas manufacturing sector posted solid growth in August according to the results of the Federal Reserve Bank of Dallas Texas Manufacturing Outlook Survey . The top line production index increased six points m/m to 16.1, while the new orders index jumped to 22 in August from 5.4 in July. Capacity utilization and shipments also increased m/m. Additionally, the general business conditions index and the company specific outlook index both gained in the month. The only relatively weak area was employment, with the employment measure falling, while the hours worked index ticked up only slightly. However, all of the six-month forward expectations indexes, including the employment measures, were higher m/m. The results from the Texas Service Sector Outlook Survey were a bit more muted. The top line revenue index fell in August to 6.6 from 9.5 in the prior month. Similar to the Manufacturing Survey, the employment and part-time employment indexes were lower m/m, but the hours worked index...

The Federal Reserve Bank of Philadelphia’s State Coincident Indexes continue to sit in firmly positive territory. In July, the three-month diffusion index improved to 86 from the 84 registered in June. This is the fourth consecutive month in which the three-month diffusion index was 80 or greater. The indexes increased in 46 states with only Kentucky, Hawaii and Alabama posting index declines over the three-month period. Oklahoma’s index was flat. However, unlike the Alabama and Hawaii indexes, Kentucky’s index improved m/m in July. Fifteen states posted over 1.0% increases over the last three months, led by West Virginia and Rhode Island. The exhibit below is reproduced from the press release.  

The Ag sector continued to be under financial pressure in the second quarter but, according to the economists at the Federal Reserve Bank of Kansas City , “the pace of decline in farm loan repayment rates and farm income slowed slightly in recent months”. Based on the results from the second quarter Federal Reserve Surveys of Agricultural Credit Conditions, the economists conclude that while loan repayment rates continued to decline in the quarter, the pace of the decline has moderated, as has the rate of decline in farm income. Nevertheless, the survey results indicate that lenders continue to tighten credit standards. Despite all of this, farm values continue to remain strong, as the economists report that “the value of nonirrigated cropland across all regions increased by an average of about 2.5% from the previous year during the second quarter”.