State Economic Watch

New Jersey’s acting commissioner of the Department of Labor and Workforce Development told a state legislative committee this week that the state’s economy was “strong and stable”. The state’s residents however, have a different view. The latest Rutgers-Eagleton Poll indicates that “three-quarters of residents rate the state’s economy negatively, with 29% rating it as “poor” and 46% as “only fair”. According to Rutgers, this negativity rating is six points higher than it was when the last poll was taken in October.

It’s hard to believe that this is still a thing, but the Arthur Laffer-affiliated think tank, American Legislative Exchange Council, is out with another edition of its Rich States, Poor States publication. The report ranks the states in terms of economic competitiveness using an index of 15 variables, most of which are related to tax policy. For the 19th year in a row, Utah came out on top, with Tennessee, Idaho, North Carolina, and Arizona rounding out the top five. Connecticut, California, Vermont, New Jersey, and New York make up the bottom five. Presumably, a high ranking gives the “top tier” states some bragging rights and marketing material to leverage, but once one realizes that this is essentially a Reaganomics/supply side exercise, it starts to look more like a tax policy race to the bottom than an informative analytical study.

  The April Business Leaders Survey from the Federal Reserve Bank of New York reflects continued weakness in the New York-Northern New Jersey service sector. While some indices improved slightly m/m, most remained in contraction territory. Additionally, optimism about future business conditions continued to weaken. The headline current business activity index firmed slightly m/m but remained in negative at -14.0, while the business climate index fell 3.1 points to a resoundingly negative -49.3. Employee count improved slightly from -8.5 to -2.4, and capex moved to a barely positive +2.9 from-2.5. However, prices paid moved higher to +73.8 while supply availability sank to -20.0. The six-month forward expectations indices all declined, with the headline business activity index declining to +2.9 from +12.7.

  The April Beige Book , released this afternoon by the Federal Reserve, reported stable to modest growth across the Fed Districts. Boston and New York reported some softness, and St. Louis and San Francisco noted flat economic activity, but all of the other Districts cited modest growth. A consistent theme across all of the Districts was the uncertainty brought about by the conflict in the Middle East, with both businesses and consumers taking a “wait-and-see” approach to spending. Almost all Districts continued to reference K-shaped consumer spending, but most noted that almost all consumers are being generally cautious. Labor markets in almost all of the Districts were flat with recent hiring concentrated in temporary or part-time workers rather than permanent full-time staff. Ports and other transportation entities expressed concern over rising fuel prices, while agricultural respondents were worried about the cost and availability of fertilizer due to the Middle East conflict....

  The April Empire State Manufacturing Survey from the Federal Reserve Bank of New York reflected a moderate improvement in manufacturing activity in New York State, with the headline general business conditions index moving into positive territory at 11.0 compared to the -0.2 reported for March. Similarly, the shipments index increased soundly from -6.9 to 20.2, and new orders increased 12.9 points to 19.3. Additionally, the two employment indexes, number of employees and average work week, increased modestly. Finally, the prices paid index increased from 36.6 to 51.0. However, the six-month forward looking indexes were generally weaker m/m, with the general business conditions expectations index falling from 31.0 to 19.6. Likewise, the new orders, shipments, employment and capex expectations indexes all moved modestly lower.

The saga of the unfinished VC Summer nuclear units in South Carolina remains endlessly fascinating. While a sister project in Georgia was completed and has been producing power for about two years, the state-owned utility Stanee Cooper and what was then South Carolina Electric and Gas, pulled the plug on the South Carolina project after significant delays and cost overruns. Now, with the nuclear power renaissance in the US beginning to materialize, it’s starting to look like the South Carolina units may actually be completed at some point, thanks to an MOU agreed to in December between Santee Cooper and Brookfield Asset Management. Really, an incredible turn of events.