State Economic Watch

After spiking higher in September, manufacturing activity in Texas slipped in October, according to the results of the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey . The top line production index erased its September gain in October, falling 13.7 points m/m to 15.8. Similarly, other indexes such as new orders, capacity utilisation, and shipments all declined by double-digits. The employment index fell 3.5 points m/m to 11.6, but the hours worked index inched higher to 10.1 from 5.6. The six-month forward expectations indexes were generally flat m/m in October, but the employment expectations index was the exception. It increased to 31.5 from 18.1 in September. The other outlier was the general business activity expectations index, with increased 17.3 points m/m to 38.1 in October.

Services sector activity in the Tenth Federal Reserve District posted modest improvement in October, according to results of the Federal Reserve Bank of Kansas City’s October Services Survey . The top line composite index improved for the second consecutive month to +10 from 0 in September and -3 in August. Similarly, the general revenue/sales index improved from +6 in September to +16 in October. The employment indexes were slightly better m/m, but remained relatively weak. Employee count increased to +2 from -10, and part-time employment improved to +6 from -13. Hours worked remained in negative territory at -3. Despite the firming in the current conditions indexes, the six-month expectations indexes mostly eased in October, with the composite index falling to +4 in October from +12 in September, and the general revenue/sales index declining to +13 from +17. The employment six-month expectations indexes were mixed, with employee count falling back into negative territory but hours wo...

  The Federal Reserve Bank of Philadelphia’s State Coincident Indexes posted another solid month in September, with the three-month diffusion index remaining unchanged m/m at 90. The more volatile one-month diffusion index fell for the second consecutive month however, dropping to 62 in September from 86 in August and 90 in July. The indexes increased in 47 states over the three-month period, with Hawaii and Alabama once again posting index declines. The indexes of both of these states also registered m/m declines in September. Maine’s index was flat over the three months. Ten states posted over 1.0% increases over the last three months, led by Nevada and South Carolina. The exhibit below is reproduced from the press release. Source: Federal Reserve Bank of Philadelphia

Washington Senator Maria Cantwell, together with the Washington State Hospital Association and Washington Association for Community Health, released a study that reportedly shows that the state’s hospitals will lose an estimated $6 billion through 2033 from the Medicare cuts contained in HR 1. According to press accounts , the report details “how coming Medicaid losses from uncompensated care are expected to strain hospitals’ finances, likely leading to clinic closures, longer ER wait times and other challenges for patients”. Unfortunately, we only have press accounts to rely on, because there is absolutely no reference to this study on either the Senator’s web site or the Washington State Hospital Association’s site. This isn’t the first time this blog has run into this kind of selective disclosure, but it’s frustrating nonetheless.

The monthly State Employment Reports from the US Bureau of Labor Statistics continue to provide little in the way of useful information. Rather, they simply confirm that the US labor market is stuck in the mud. There was little change in state labor statistics reported in the September release. Just two states posted m/m increases in nonfarm payrolls in the month, New Jersey and South Carolina, while Wisconsin saw a decrease. No substantive change was reported for the remaining 47 states. On a y/y basis, seven states posted what the BLS considered statistically significant employment gains, with South Carolina heading the list with a  2.3% y/y increase. All of the employment sectors in South Carolina saw y/y gains, but professional services and health and ed posted the most notable gains. Louisiana and Utah rounded out the top three, with Louisiana enjoying a boost in construction employment and Utah benefiting from growth in construction and professional services employment. The ...

The responses to Federal Reserve Bank of Philadelphia’s Nonmanufacturing Business Outlook Survey were mixed in October. The top line firm specific general business activity index rose to +12.9 in October from +0.3 in September, but the regional general business activity index slipped to -23.6 from -22 in the prior month. Similarly, the employment indexes weakened m/m, with the full time index falling from +19 to a still positive +12, and the part-time employment index dropping to +1.3 from +10.7. However, the average workweek index firmed to +11.3 in October from +8.5 in September. While the capex indexes also fell, 44% of respondents expect 2027 capital spending to be higher than in 2026, for a diffusion index reading of +18.5. Finally, the six-month general forward business activity indexes declined m/m, but the firm specific activity index remained positive at +11.3 compared to +20.3 in September, while the regional expectations index fell to a negative -9.0 from +2.0 in the p...