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October 2, 2014 - Robust job growth in the metro Milwaukee area led to a strong economic performance in August, according to a monthly report by the Metropolitan Milwaukee Association of Commerce (MMAC). Sixteen of 23 monthly economic indicators pointed upward in August marking the fifth consecutive month in which over two-thirds or more of indicators tracked by the MMAC registered positive.
"The pace of metro area employment growth in recent months has reached levels not seen since 1998," said Bret Mayborne, economic research director for the MMAC. "Strengthening job growth has led to an improving unemployment picture, pushing the local unemployment rate below 6% for the first time since December, 2008."
"The pace of metro area employment growth in recent months has reached levels not seen since 1998."
of Economic Research
Highlights of the report include:
• Nonfarm employment in the metro area grew at a 2.5% pace in August (vs. August, 2013), to 853,000. August marks the 47th consecutive month of year-over-year job growth while gains in the past three months rank as the strongest such period of growth posted since June, 1998.
• Seven of ten major industry sectors posted August employment gains. The leisure & hospitality and government sectors registered the strongest increases, both up 6.2% vs. year-ago levels while the financial activities sector (down 1.8%) recorded the largest decline.
• Weakness remains among local housing and real estate indicators. Against year-ago levels, metro area existing home sales in August fell at a 1.4% pace while mortgages recorded in Milwaukee County dropped 29.2%.
Metro Milwaukee’s seasonally unadjusted unemployment rate dipped below 6% for the first time since December, 2008. August’s 5.8% rate ranks 1.4 percentage points below year-ago levels and compares to the 5.1% rate posted statewide and the nation’s 6.3% rate.
Other unemployment indicators also improved. The number of unemployed fell 17.9% from one year ago to 47,200, while new unemployment compensation claims decreased 18.9% vs. year-ago levels (to 3,855).
Indicators: August, 2014 vs. August, 2013
Strong metro area job growth continued into August. August’s 2.5% growth rate (to 853,000) matches that posted in July. Year-over-year employment growth in the metro area has averaged 2.6% over the past three months, the strongest three month period of growth posted in over 16 years (since June, 1998).
Broad-based industry gains supported August’s growth as seven of ten major industry sectors posted year-over-year gains. Both the leisure & hospitality and government sectors posted 6.2% increases, the month’s strongest year-over-year gains. Growth was also recorded in the construction, mining & natural resources (up 5.4%), education & health services (up 3.2%), professional & business services (up 2.8%), manufacturing (up 1.3%) and trade, transportation & utilities (up 0.8%) sectors.
Three of ten major industry sectors registered job declines in August vs. year-ago levels. Two of these three sectors remain in a long-term employment decline trend. The financial activities sector fell 1.8% in August while the information sector fell at a 0.7% rate. Both sectors have posted consistent year-over-year employment declines for the better part of six years. The other services sector posted a 0.2% decline in August following the 0.7% decrease registered in July (vs. July, 2013).
Manufacturing’s overall job gain was met by a mixed trend in production and earnings indicators. Average weekly hours for manufacturing production workers fell 0.9% (to 41.8 hours) from one year ago, following a 2.8% decline in July. Earnings gains among production workers surpassed national consumer price inflation (up 1.7% vs. year-ago levels). Average weekly earnings for production workers rose 2.6% in August (to $808), and average hourly earnings increased 3.6%, to $19.34.
A downward trend continues in local housing and real estate indicators tracked by the MMAC. Existing home sales in the metro area fell for the seventh consecutive month – down 1.4% vs. year-ago levels, to 1,507 and mortgages recorded in Milwaukee County fell for its thirteenth consecutive month – down 29.2%, to 2,027.
New-car registrations fell 11.2% in August (to 2,629), following a 1.9% decline in July. August’s percentage decline was the largest year-over-year fall posted in over two years (since March, 2012). Air passenger totals at Mitchell International Airport rose marginally in August, up 0.1%, to 593,731.
Other Indicators (latest available)
The value of signed construction contracts, as reported by F.W. Dodge for July, was $175.8 million, up 39.1% from July, 2013. Consumer prices nationally, as measured by the Consumer Price Index for Urban Consumers (CPI-U), rose 1.7% in August (vs. August, 2013) to 237.852 (1982-84 =100). The Milwaukee area CPI-U reached 228.005 for the first half of 2014, a 1.1% increase from 2013's first half.