State Economic Watch

Vermont state economists are projecting general fund revenue growth to 2.4% in the current year and 3.2% next year. This is equal to the forecast made in January, but better than the revenue downgrade that was anticipated. The economists point to, among other things, the knock-on wealth effects from rising equity prices and the resultant increases in consumption and tax receipts. 

The Detroit News reports that Michigan has sustained more than $4 billion in economic damage from the Canadian and northern Minnesota wildfires - and that’s only the direct economic costs. Included in this economic damage is the cancellation of the John Mellencamp concert at Pine Knob last Thursday.

  The Federal Reserve Bank of Philadelphia’s State Coincident Indexes were solid again in June, with the three-month diffusion index remaining at 84, equal to the reading in May, and only slightly lower than the 92 posted in April. The indexes increased in 46 states with only Connecticut, Kentucky, Hawaii and Alabama posting index declines over the three-month period. The indexes of Alabama and Kentucky have declined each month since March, while Connecticut’s index fell m/m in April, but has remained steady since then. Hawaii’s index hit it’s recent peak in April before declining modestly in May and June. Eleven states posted over 1.0% increases over the last three months, led by West Virginia and Delaware. The exhibit below is reproduced from the press release.

The Federal Reserve Bank of Kansas City’s July Services Survey reflects a modest increase in activity in the Tenth Federal Reserve District. The top line composite index increased to 14 in July from 5 in June. The general revenue/sales index also rose moderately to 19  from 3. Employee count ticked up minimally to 4 from 1 but the hours worked index declined from 8 in June to -1 in July. Part time employment fell from 8 to -5, but this index has been negative to barely positive for the last year. The six-month expectations indexes were generally flat m/m, with the composite and general revenue/sales indexes remaining in solidly positive territory at 24 and 39 respectively.

The Texas Manufacturing Index Survey indicated continued growth in the state's manufacturing sector in July. The production index increased six points m/m to 10.1. New orders also increased. The six month expectations indexes were generally unchanged m/m but remained in solidly positive territory. Both the current and expectations employment indexes were somewhat lower, but the July survey’s special question indicated that 50% of employers are actively looking to hire workers, compared to 44% the last time this question was asked in January.

Manufacturing activity in the Third Federal Reserve District increased significantly in July according to the Manufacturing Business Outlook Survey from the Federal Reserve Bank of Philadelphia. The top line general business activity index increased +31.1 points m/m in July to +41.4. New orders and shipments also moved higher, with the new orders index increasing to +37 in July from +27.3 in June, and shipments index increasing to +33.7 from +14.9 in the prior month. The employee count index moved slightly higher m/m, while the average workweek moved into positive territory to +14 from -6.5 in June. In contrast, the six-month forward expectations indexes all moved lower m/m but remained in positive territory.