Showing posts with label Economist--Lecia Langston. Show all posts
Showing posts with label Economist--Lecia Langston. Show all posts

Wednesday, June 3, 2020

Unemployment Insurance Claims Data Shed Light on the Local Economic Impacts of the COVID-19 Pandemic


By Lecia Parks Langston, Senior Economist; Michael Jeanfreau, Regional Economist


“You have power over your mind — not outside events. Realize this, and you will find strength.” Marcus Aurelius


In the wake of the COVID-19 pandemic, businesses lost revenues and workers lost jobs. But because of the time it takes to collect and collate data, economists have been left without much information to quantify the economic impacts at the local level.

But there is one ray of data illumination. Claims for unemployment benefits are promptly available and provide information about a large cross section of the economy. This post will outline what light unemployment claims data sheds on the state of Utah’s Bear River economy.

While not all workers are protected by unemployment insurance laws, roughly 95% of jobs are covered. This makes claims data an exceptional source of information about the economy. Not included under unemployment insurance laws are most self-employed workers, about half of agricultural employment, unpaid family workers, railroad personnel (covered separately) and many nonprofit organizations (such as churches). Also, some out-of-work employees may not have worked a sufficient work history to qualify for unemployment insurance benefits, but may file anyway. Fortunately, in this time of economic distress, the social safety nets of the unemployment insurance program, special national COVID-19 funding and social programs are working together to keep workers’ income and well-being stable.

Unemployment claimants and the unemployed; they aren’t the same

Also, keep in mind that, in addition to individuals drawing unemployment benefits, the unemployment rate includes those entering and re-entering the workforce and noncovered groups without current employment. This means the number of “unemployed” will be greater than the number of claimants. In “normal” times, only about 40% of the “unemployed” are claiming benefits. The generally reported unemployment rate also has a work-search requirement. If you haven’t made any minimal attempts to find work, you aren’t counted as “unemployed.”

Watch this Space

While this analysis won’t be updated on a regular basis, new data will be added to the data visualization on a weekly basis allowing readers to check back for the latest information.

An Unprecedented Event

Not surprisingly, first-time claims for unemployment benefits have soared in Utah and across the nation as the pandemic swept across the country. This increase is unprecedented since the creation of unemployment insurance coverage during the Great Depression. Week 12 (beginning March 16) marks the start of this unparalleled surge in claims. On a positive note, while new claims for unemployment benefits have skyrocketed in Utah, the state currently shows one of the lowest claims rates in the nation.

In Bear River, total claims peaked at week 15 (starting April 6), slightly after the state average of at or before week 14 (starting March 23). During the peak week 15, initial claims filed totaled 1,183 in Bear River. By week 19, claims measured considerably lower but continued to run substantially greater than in previous years — even during the “Great Recession.”

Here’s another example of the tremendous flood of new claims. Prior to the COVID-19 pandemic, counties in Bear River averaged a total of 49 first-time claims per week. This time period included seasonally high claims weeks in January. In the weeks after, an average of 738 claims were filed for an almost unbelievable increase of 1,506%.

Who took the hardest hit?

Across the state, there was an initial spike in food service, retail and healthcare/social assistance filing initial claims in the weeks immediately following the start of the pandemic in Utah. The Bear River region was affected similarly until week 15, which saw a sharp increase in the number of claims from the manufacturing industry. For weeks 12 through 14, about 8% of initial claims were from manufacturing. On week 15, that percentage increased to roughly 45% of initial claims as companies reacted to the national and international effects of COVID-19 on consumer demand and supply chain management and has remained high in comparison to other industries in the weeks following.

Manufacturing and COVID-19

Rich County and Cache County were both hit less heavily in comparison to the state — receiving first-time claims from 5% of covered employment in their areas compared to the state total of 10%. Box Elder County is recorded as having first-time claims from 12% of their covered employment.

The unemployment insurance system was first put in place in 1935 with the Social Security Act during the Great Depression and was designed largely around production and manufacturing jobs. In the 85 years since, the labor force has changed significantly and the prevalence of the service industry (food/retail) has increased. The early effects of COVID-19 largely impacted these service sectors while in the most recent weeks, the region has seen the large numbers of claims coming from the manufacturing industry. The numbers were enough to make manufacturing the regions overall largest contributor to unemployment benefit claims. This is indicative of both Bear River’s heavy concentration in the manufacturing industry as well as the expanding effects of pandemic slowdown across more industries over time.

The Industry Flow

While most of the high-claim industries felt the pain of the pandemic early on, other industries surged in later weeks. As the economic effects of other closures worked their way through the economy, both manufacturing and transportation/warehousing proved relative latecomers to the layoffs in the Bear River region.

The High and the Low

Although manufacturing is the dominant industry in the Bear River region and has generated the largest number of initial claims during the COVID-19 pandemic, in percentage terms, other industries have actually suffered more. For example, in the small real estate and rental and leasing industry, roughly 20% of workers have filed for claims. The Other Industries sector, which comprises mainly of auto work and personal beauty services, had a first-time claims rate of 13%. Accommodation and food services also has a higher first-time claims (11%) rate than manufacturing, despite manufacturing having more than twice as many claims total.

Because of its job-to-job nature, the construction industry typically accounts for 20-30% of first-time claims. However, although construction’s new claims have also increased, they have increased at a much slower-than-average rate. After the start of the COVID-19 pandemic, construction contributed only about 4% of first-time claims. Ease of social-distancing and good weather have helped construction maintain employment levels. New claims measured just 4% of covered construction employment.

Only a portion of agricultural employment is covered by unemployment insurance laws. However, as companies work to keep America fed, agribusiness has laid off few employees. In the Bear River region, covered agriculture plays a notable role in the economy. However, less than 1% of Bear River’s covered agricultural workers have filed a claim during the pandemic.
Public administration, educational services (including public and higher education), finance/insurance, professional and scientific services, and utilities have also managed to keep a higher percentage of their workforces employed.

County by County

Box Elder County
  • Prior to the pandemic slowdown, Box Elder County averaged 18 unemployment claims per week compared to 330 new claims afterward, an increase of 1,688%.
  • Because of its large share of employment in manufacturing, the worst effects of COVID-19 were delayed from the initial effect on food accommodation, retail trade and nonessential healthcare. As a result, the peak of initial claims was on week 15, with 607 initial claims.
  • New claims, as a percent of covered employment, measured at 12% — higher than the state average and reflective of the region’s industrial strengths.
  • While manufacturing had the highest total initial claims at 1,213, it did not have the highest percent of covered employment submitting initial claims. Real estate and rental services, personal care services, accommodation and food services, and information all had higher initial claims as a percent of covered employment.
  • Box Elder County accounted for 40% of the Bear River Region’s new claims prior to the pandemic. For weeks 12 through 14, it dropped to around 35%, and then rose as manufacturing was impacted on week 15 and has rested about 50% since. Overall, manufacturing accounts for 46% of all claims in Box Elder County.

Cache County
  • Cache County shares a regional specialization in manufacturing but has not been as affected as sharply in the sector as Box Elder. Cache County saw 14% of total initial claims compared to Box Elder’s 46%. Across all industries, only 5% of total covered employment in Cache County has filed initial claims, half of the state of Utah’s average of 10%.
  • Prior to the COVID-19 slowdown, Cache County averaged 30 first-time claims per week, compared to an average of 404 claims per week afterwards. This change represents an increase of 1,243%.
  • Although all industries have been affected by COVID-19, no single industry was overwhelmingly represented in initial unemployment benefit claims. Manufacturing and food services were both 14% of total initial claims in the county, followed by retail trade (12%), health care and social assistance (11%) and administrative support (7%).
  • 11% of total claims are from unknown industries, which will largely reflect the distribution of known industries.
  • The high unemployment claims from manufacturing across the Bear River Region has actually lowered Cache’s share of first-time claims after the COVID-19 slowdown from 61% before quarantine procedures to 55% after.

Rich County
  • In the weeks before business reacted to the pandemic, Rich County averaged one initial claim per week. After the pandemic hit, an average of four claims were filed per week, marking an increase of 368%.
  • In Rich County, first-time claims in the restricted period measured 5% of covered employment. That places Rich County in the bottom half of a county-by-county ranking. Only 34 claims were filed in total.
  • As in many counties, Rich County’s accommodations/food service industry accounted for the highest number of new claims after the COVID-19 slowdown, but was tied with real estate and rental and leasing, both accounting for 21% of claims total.
  • Public administration, construction, and health care and social services followed, each have three or less claims.
  • First-time claims from Rich County have gone from 2% of the Bear River Regional total before the COVID-19 slowdown down to 1% or less in the weeks following.



Friday, February 28, 2014

Wednesday, September 18, 2013

MSA Gross Domestic Product estimates released

The U.S. Bureau of Economic Analysis just released 2012 Gross Domestic Product (GDP) estimates for Metropolitan Statistical Areas (MSAs) in the United States. On average, MSA real GDP (adjusted for inflation) increased by 2.5 percent in 2012—slightly lower than the total U.S. average of 2.8 percent.

Nationally, Texas and Indiana dominated the rankings for the fastest-growing MSAs. Each of these states placed three MSAs among the top ten. The New Orleans and San Francisco MSAs showed the fastest-growing large MSA economies.

Monday, February 25, 2013

2011 Advance GDP by Metropolitan Area Released

The U.S. Bureau of Economic Analysis recently released gross domestic product estimates for the nation’s 366 metropolitan areas. In 2011, metropolitan area growth registered an average of 1.6 percent—just slightly higher than the U.S. total (1.5 percent). However, the growth rate for metro areas dropped noticeably from the 2010 expansion of 3.1 percent.

Only 242 of the nation’s metropolitan areas experienced a 2011 gain in GDP. However, all of Utah’s metro area’s showed increases equal to or greater than the U.S. metro average. Both Ogden/Clearfield and Provo/Orem generated gains of greater than 5 percent. Lowest on the scale proved the Logan metro area with a gain of only 1.6 percent. For more information on the current release, click here.

Monday, March 12, 2012

Foreclosure Rates

I've had a couple of questions lately about where to find foreclosure rates by county. Without paying for information, county-level foreclosure rates are hard to find and when you can find them, the numbers are old (HUD foreclosure rates, 2008; New York Federal Reserve Bank, Third Quarter 2010). Some private entities (such as Realty Trac) publish limited free foreclosure information. However, they don't publish their methodology and an analysis of their figures suggest they may leave something to be desired.

However, for Metropolitan Statistical Areas (MSAs), I have found what looks to be some decent free and relatively up-to-date foreclosure data. This analysis of LPS Applied Analytics Data by the Local Initiatives Support Corporation (LISC) is well documented and on-going. And, their methodology is available so the data-user can understand the data itself. You can access their data by clicking here.

I've also thrown together some visualizations of their foreclosure data below. First some definitions:

Foreclosure Rate: Percent of all mortgages in the foreclosure inventory in the reference month.  Mortgages in the foreclosure inventory include those in foreclosure and bankruptcy foreclosures prior to auction or trustee sale.

Prime Foreclosure Rate: Percent of all prime mortgages in the foreclosure inventory in the reference month.  Prime mortgages are those that are Grade A, not a government product or government-insured, and either with 1) credit scores over 720 or 2) credit scores are from 680-719 with full documentation.

Subprime Foreclosure Rate: Percent of all subprime mortgages in the foreclosure inventory in the reference month. Subprime mortgages are those that a servicer coded as subprime or loans made to borrowers with FICO scores below 620 who did not receive a government, Fannie Mae or Freddie Mac loan.

Serious Delinquency Rate: Percent of all mortgages either 90 or more days delinquent or in the foreclosure inventory in the reference month.

90+ Delinquency Rate: Percent of all mortgages 90 or more days delinquent and have not yet entered into judicial or non-judicial foreclosure in the reference month.

Not surprisingly, Utah's poster child for the housing bubble, the St. George, UT MSA (Washington County), shows the rates for most worst measures. On the other hand, it still ranks far below some of the worst MSAs (many in Florida and also nearby Las Vegas). In June 2011, Washington County's foreclosure rate ranking measured 146 and its serious delinquency rate measured 130. The Salt Lake City MSA showed the next Utah highest rankings, while the Logan, UT-ID MSA showed the lowest foreclosure rankings. Hmmm. . .Utah MSAs with the most bubble-like increases in home prices (see the previous post) also show the highest foreclosure rates. While the MSA in Utah with the smallest home-price acceleration during the boom (Logan, UT-ID MSA) shows the lowest foreclosure ranking in Utah. Coincidence? I think not.

You'll also notice that all the Utah MSAs show a decline in serious delinquency rates since the national peak in foreclosures in December 2009. In this case, the St. George, UT MSA has shown the most improvement.



Tuesday, January 31, 2012

Provo women earn some of the lowest salaries in the largest U.S. Metropolitan Areas

Women in Provo have some of the lowest average salaries in the country, according to a Forbes analysis of the 2010 American Community Survey by the U.S. Census Bureau. Provo women are making on average less than $37,000 a year, according to the report. Provo women are making on average less than $37,000 a year, according to the report. Deseret News

Note:
Since I am interested in women's labor force issues and don't usually look at this type of data below the statewide level, I took the opportunity to look at the actual Forbes article. Forbes  used 2010 American Community Survey data for "large" Metropolitan Statistical Areas (MSAs) and focused on females working year-round and full-time. Unfortunately for comparative purposes, Forbes doesn't tell us what they considered a large MSA.

With median female earnings for year-round, full-time workers of $31,400, the Provo/Orem MSA ranks 249 out of 374 MSAs nationwide. Incidentally, the "smaller" MSAs of Logan and St. George showed lower female median earnings ($27,100 and $26,700, respectively). Other large Utah MSAs appear higher in the rankings--Salt Lake ranks 154, while the Ogden/Clearfield MSA ranks in the 200 spot.

However, keep in mind that areas with low female earnings might also have low earnings for both genders. In other words, an MSA's low female earnings may be reflected in low male earnings as well. Cost of living, age of the labor force, industrial mix, etc. affects wages generally. . .not just for women. In my mind, the true question perhaps should be: How do men and women's earnings compare in Utah's most populous communities?

In 2010, U.S. median earnings for women working year-round, full-time measured 78.6 percent of the comparable male figure. (This wage gap has contracted decidedly in recent decades.) How do Utah's MSAs stack up? Honestly, not so great. The Ogden/Clearfield MSA shows a female/male wage ratio of 63 percent, the Provo/Orem MSA shows 65 percent ratio. Logan's ratio measures 70 percent, and St. George's figure is 71 percent. Even in Utah's best MSA performer--Salt Lake City--the female median wage measures only 74 percent of the male median wage. More than 70 percent of the nation's MSAs show female/male wage ratios better than Salt Lake City.

What's up? Why the low female-to-male wage rations in Utah? Undoubtedly many factors come into play. However, one major influence on the large difference in wages seems to come to the forefront. I call it the "education gap" and it is a primary factor behind Utah's larger-than-average wage gap. Statistically, there is a well-know relationship behind one's earnings and one's education. In general, the higher a person's level of education, the higher their earnings.

What's the education gap? By my reckoning, it is simply the percentage point difference between the share of the male population (over 25) with at least a Bachelor's degree and the share of the female population (over 25) with at least a Bachelor's degree. Nationally, there is a six-tenths of a point difference in the share of men and women with at least a Bachelor's degree (28.5 percent and 27.9 percent, respectively). In other words, in the U.S. there is currently very little difference between the share of men and women with a four-year degree or better.

The three MSAs with the largest male/female education gap in the nation? Number 1--Provo/Orem, Utah (11.3 percentage points). Neck and Neck for the number 2 spot--St. George, Utah (9.8 percentage points) and Ogden/Clearfield, UT (9.8 percentage points). Logan's performance is somewhat better--"only" a 4.2 point difference. The Salt Lake MSA managed the smallest Utah education gap--still large at 2.5 percentage points. Every single Utah MSA ranked among the 20 percent of MSAs with the largest education gaps.

Keep in mind that in 40 percent of the nation's Metropolitan Statistical Areas, a higher percentage of women have obtained a Bachelor's degree than have men. If Utah's women are falling far behind men in educational attainment, it should come as no surprise that they are falling far behind men in earnings.


Tuesday, September 13, 2011

Most of Utah's Metropolitan Statistical Areas experience GDP growth in 2010

The U.S. Bureau of Economic Analysis just released annual Gross Domestic Product (GDP) estimates for Metropolitan Statistical Areas (MSAs) today. Remember that GDP represents the value of all goods and services produced in an area. Real (inflation-adjusted) U.S. GDP for metropolitan area increased an average 2.5 percent in 2010 after declining 2.5 percent in 2009. Growth proved widespread with real  GDP increasing in 304 of 366 (83 percent) metropolitan areas, led by national growth in durable-goods manufacturing, trade, and financial activities.

In Utah, growth also dominated the figures with only the St. George, UT MSA displaying an annual decline in real GDP (down 1.6 percent). In general, GDP growth in Utah's MSAs registered below average. The Logan UT, MSA showed the most rapid expansion (4.0 percent).

For more information about the 2010 GDP figures for MSAs, click here.

Wednesday, March 30, 2011

Has Utah's housing bubble deflated yet?


Housing bubbles aren't like most price bubbles. Typically, speculation drives up prices (of stocks, crude oil, and back in the 17th century even tulips) like an expanding bubble. Eventually, it becomes obvious that item is extremely over-valued and prices "pop" and collapse. Yes, that's why we call them bubbles.

Remember a couple of years ago when gasoline prices went through the roof? You can blame a bubble market in crude oil. (Some SEC reports indicated that 80 percent of crude oil trading during the height of that price expansion was speculative.) In just seven months, the producer price index (seasonally adjusted) for crude oil went from 339.9 to 108.8. That change represents a decrease of almost 70 percent! Talk about a popping bubble. (And, you might want to note the similarity to the current price increases in oil/gasoline.)

On the other hand, housing bubbles tend to slowly deflate rather than pop. Why? Think about it. If you bought a home at the height of the bubble for $400,000 do you really want to sell it for $250,000? No. Most private individuals aren't able to afford that kind of loss. For many American families, a home is their largest asset. So, if you must sell, you will keep trying to sell at a higher price until the market makes it clear that just isn't going to happen. In other words, home prices are sticky downward, so it will take longer for home prices to deflate after the speculation ends.

It also becomes readily apparent why there is such a foreclosure mess in this country. Obviously, many home-buyers took out loans they couldn't afford in the long run. Then, the recession exacerbated other home-buyers' ability to pay. In addition, even if home-buyers can afford to make their payments, aren't the incentives skewed towards walking away rather than paying off the $400,000 mortgage on a home that is now worth only $250,000?

Well, this housing bubble has certainly taken its time collapsing. However, the market is working her magic and there does seem to be light at the end of the tunnel--at least according to the Federal Housing Finance Agency's Housing Price Index (HPI). (For more information on the HPI see this previous post or the Agency's website.)

(Click on image to enlarge.)

The chart that accompanies this posting certainly provides a lovely portrait of a housing market bubble for Utah's Metropolitan Statistical Areas (MSAs)--particularly for my own Washington County. You can watch home prices explode and then collapse (the chart shows the percent change compared with the same quarter a year ago--which eliminates seasonality).

The Logan, UT MSA (Cache County) seemed to participate the least in the run up of home prices and also appears closest to the end of the price declines. As of fourth quarter 2010 (the most recent index available):

  • Logan home prices are down only 1.0 percent compared with prices in fourth quarter 2009.
  • Ogden-Clearfield MSA home prices are down 1.8 percent.
  • Salt Lake City MSA prices are down 2.0 percent.
  • Provo-Orem MSA prices are down 2.4 percent.
  • St. George MSA prices still show the largest price declines--4.8 percent.
However, for all MSA the price declines are getting smaller and smaller. The market is making her adjustments. In fact, given current trends, most if not all of Utah's MSAs are poised to see the end of home price declines in 2011.

Wednesday, February 23, 2011

Metropolitan GDP figures released


The U.S. Bureau of Economic Analysis (BEA) has just released 2009 estimates of Gross Domestic Product for Metropolitan Statistical Areas (MSAs) across the nation. (Yes, that's not a "typo" 2009 data is the most recent information available for MSAs.) Given the economic downturn, it may be surprising that only 80 percent (292 of 366) of the nation's MSAs experienced a decline in real (inflation-adjusted) gross domestic product.

How did Utah's MSAs perform? Three of five Utah MSAs showed an increase in gross domestic product in 2009--Logan, Salt Lake City, and Ogden-Clearfield. In fact, the Salt Lake City MSA (which includes Salt Lake, Tooele, and Summit counties) placed in the top quintile of all MSAs. The gains weren't phenomenal (just under 1 percent), but during a recession, any gains are certainly welcome.

The St. George, UT MSA (Washington County) produced the worst Utah decline in GDP during 2009--3.4 percent. Of course, the St. George area participated in housing market speculation to a much greater degree than any other area in the state. Indeed, Washington County's decrease placed it in the lowest quintile of all MSAs. It's performance ranking? It ranked 310 out of 366 MSAs. In addition, Provo-Orem experienced a 1.7 percent drop.

For more information on recent GDP performance: http://www.bea.gov/newsreleases/regional/gdp_metro/gdp_metro_newsrelease.htm

Home prices hit post-bust lows in most big cities

Home prices in a majority of major U.S. cities tracked by a private trade group have fallen to their lowest levels since the housing bubble burst. The Standard & Poor’s/Case-Shiller index fell in December from November in all but one of the 20 cities it tracks. The 20-city index declined 1 percent.

The only market to see a gain was Washington, D.C. Along Utah’s Wasatch Front, according to a Jan. 27 report, the residential real estate market, mired in one of the worst downturns ever, is showing a few signs of improvement.

In Salt Lake County, 1,934 existing single-family homes were sold in the fourth quarter of 2010, down 21 percent compared with the fourth quarter of 2009, according to the Salt Lake Board of Realtors. The median selling price was $215,000, down 4.4 percent from the same three-month period in 2009 and off a peak of $256,000 in the summer of 2007. Salt Lake Tribune

Note: The Federal Housing Finance Agency also publishes the Housing Price Index for all Metropolitan Statistical Areas (MSAs). The following chart shows the year-to-year change in the index for Utah MSAs. The most current index is for third quarter 2010. A bottom to housing prices according to this chart would occur when the year-to-year is equal to zero. At this point, the Logan, UT MSA is closest to a bottoming in prices, followed by the Ogden-Clearfield MSA. Not surprisingly, these two areas experienced the lowest level of speculation in the housing market. You can access this information at: http://www.fhfa.gov/Default.aspx?Page=14

Wednesday, May 26, 2010

Home prices still falling in Utah's metropolitan areas



According to information released by the Federal Housing Finance Agency, home prices have yet to bottom-out in Utah's various Metropolitan Statistical Areas. Compared to prices a year ago, St. George MSA prices are down almost 18 percent, prices in the Provo-Orem MSA are down 13 percent and the Salt Lake City MSA prices are down about 10 percent. Both the Ogden-Clearfield MSA (down 6 percent) and the Logan MSA (down 3.4 percent) show slower home price declines.

Thursday, April 22, 2010

New County-Level Personal Income Data Available

The Bureau of Economic Analysis (BEA) has released estimates of personal income at the county level for 2008 based on newly available source data. The county estimates released today complete the successively more detailed series of data releases depicting the geographic distribution of the nation’s personal income for 2008.

The annual estimates (1969-2008) of local area personal income have been revised to incorporate the comprehensive revision of the National Income and Product Accounts (NIPA). Comprehensive revisions, which are undertaken every 4 to 5 years, are an important part of BEA’s regular process for improving and modernizing its accounts to keep pace with the ever-changing U.S. economy. Bureau of Economic Analysis