Negative Growth vs. Changes in the Rate of Growth

I gave a talk to the Charleston-Trident Association of REALTORS yesterday and the Post and Courier summarized it. Below is a graph representing the slowdown in employment growth that I talked about here.

As you can see, the rate of growth of Charleston employment has declined significantly in 2013, even as the growth rate itself is still positive. In fact, the current growth rate closely parallels the state average (currently at +1.6%).

Housing demand closely follows employment growth. Thus, if this lower rate of Charleston employment growth persists, it is likely that the rate of growth in the Charleston housing market will also be reduced. Nevertheless, it is important to recognize that a decline in the rate of growth is not the same as a market contraction. A market contraction occurs only when we observe negative rates of growth. In this graph, that would be illustrated if either the blue line or the red line were to go below 0%. Currently there is no evidence that we will see negative employment growth or negative housing growth anytime soon.

Marion County is South Carolina's Unhealthiest County

You can see the story here, which includes a very brief comment by me about the relatively poor economic conditions of the county. Marion County, like several other rural counties in South Carolina, lack many of the incentives that draw businesses in and facilitate economic growth. These include (among others) a large population base with a skilled or educated workforce, access to good transportation infrastructure (interstate highways, roads, bridges, etc...), as well as natural resources and other attractions to draw new residents to the region.

Employment Numbers Revisited

Every month the South Carolina Department of Employment and Workforce releases the latest employment numbers for the state. Yesterday afternoon, we found out that our unemployment rate rose from 8.0 percent in May to 8.1 percent in June.

One aspect of the monthly employment figures that is not often discussed is the fact that there are two sources for the South Carolina employment data that are released every month. The first source is the Current Employment Statistics (CES), which reflects data gathered from surveys of businesses. The second source is the Local Area Unemployment Statistics (LAUS), which reflects data gathered from surveys of households. Because the CES and the LAUS numbers come from different surveys, their monthly employment estimates are almost never in total agreement. The unemployment rate reported each month is based off of LAUS data.

In the employment data released yesterday, the CES figures show that the total number of employed persons increased by 10,100 between May and June. The LAUS figures, however, show that there were 4,769 fewer people working in June than in May. This is why the unemployment rate increased.

The two surveys, while almost never in total agreement, usually report employment going in the same direction. When they do not, however, it is usually due to nothing more than measurement error. In other words, the actual change in employment is so small that it is very difficult to tell whether we gained or lost jobs.

So the bottom line is that when each survey reports total employment moving in opposite directions - as was the case this month - the odds are that the actual change in total employment for the month was very small.

Natural Gas vs. Nuclear Power

With the cost of natural gas declining, nuclear power plants are having a more difficult time staying competitive.

Charleston is Ranked #1!

The readers of Travel and Leisure Magazine have voted Charleston the #1 city in the United States (and #7 in the world) for 2013. You can see their reader rankings in the "World's Best Awards" spotlight here. Why is this important?

One of the major drivers of economic growth is the size of the "knowledge economy" - that is - industries that regularly contribute to innovation, technological development, and the commercialization of new ideas. These industries largely consist of highly skilled workers with advanced degrees in science and mathematics - many of whom are highly sought after all over the United States.

If a business operating in a "knowledge economy" industry wants to locate in Charleston, it will need some degree of confidence that it will be able to attract these highly skilled workers to live and work there. Charleston's recent ranking provides evidence that confidence in this coastal city would not be misplaced.

First Quarter Personal Income Estimates Released

The BEA released the first quarter estimates for South Carolina personal income levels today. As you can see from the graph below, this is the slowest year/year growth we've seen since q110. Though it's certainly not a promising start for the year, it's also not entirely unexpected. Much of this slowdown is the result of the 2% payroll tax increase that went into effect on January 1st.

South Carolina Higher Education Trends

The Lumina Foundation released a report last week claiming that the national pace of college attainment is not enough to meet future workforce needs. According to this new report, South Carolina experienced a minor decline over the last year (of 0.6 percentage points) in the number of working-age adults (25-64 years old) who hold a two- or four-year degree.

National Builder Confidence on the Rise

As you can see here, a majority of home builders report being optimistic about sales activity for the first time in seven years.