ST. LOUIS—In an August survey, slightly less than half of the business contacts from the Memphis Zone of the Federal Reserve Bank of St. Louis expected economic conditions to improve over the second half of 2014.
The information was published Sept. 23 in the latest quarterly release of the Burgundy Books, a publication of the St. Louis Fed. The reports offer comprehensive economic information for each of the St. Louis Fed’s four zones: St. Louis, Little Rock, Ark., Louisville, Ky., and Memphis, Tenn.
The Memphis Zone includes northern Mississippi, eastern Arkansas and western Tennessee. It has a population of approximately 3.1 million people, including the 1.3 million who live in the metropolitan statistical area (MSA) including Memphis.
The Memphis Zone’s unemployment rate declined from 8.8 percent in the first quarter to 8.4 percent in the second quarter. Although labor market conditions remained the strongest in the MSA including Jonesboro, Ark., the unemployment rate fell to 7.8 percent in the second quarter in the Memphis MSA.
Growth of nonfarm payroll employment strengthened modestly across the zone. Manufacturing employment growth in the second quarter was especially strong in Mississippi, at 2.9 percent. In contrast, employment in the transportation industry in the Memphis MSA fell by 2.6 percent in the second quarter.
House prices were up strongly in the Memphis MSA for the second consecutive quarter, but single-family building permits and total home sales declined. Housing market conditions, on balance, were stronger in the MSAs including Jonesboro, Ark. and Jackson, Tenn.
Households in the Memphis Zone reduced their credit card and mortgage balances in the second quarter at a faster rate than the nation. Mortgage and credit card delinquency rates fell significantly in the second quarter in Tennessee. Contacts across the zone generally reported improving consumer sentiment.
Commercial bank profitability (return on average assets) improved at Tennessee banks but remained essentially unchanged at Mississippi banks in the second quarter. Forty percent of bankers expected loan demand to remain unchanged over the next three months.
View the entire Memphis Zone report at https://research.stlouisfed.org/regecon/burgundybooks/14/09/BB0914Mem.pdf.
An audio summary of the Memphis Zone report is available at http://www.stlouisfed.org/newsroom/multimedia/audio/20140923-burgundybooks.cfm.
The next Burgundy Books will be released Dec. 19.