ST. LOUIS—A February survey of business contacts in the Memphis Zone of the Federal Reserve Bank of St. Louis revealed improving optimism compared with three months earlier. In fact, some contacts reported signs of building wage pressures.
The information was published March 24 in the latest quarterly release of the Burgundy Books, a publication produced by the St. Louis Fed. The reports offer comprehensive economic information for each of the bank’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 Memphis metropolitan statistical area (MSA).
The Memphis MSA experienced moderate advances in private-sector employment (1.6 percent) in the fourth quarter of 2014 compared with a year earlier. Growth of durable goods manufacturing employment rose strongly in the Memphis MSA, as it did for all of Tennessee and Mississippi. However, employment gains in the Memphis and Jackson, Tenn., MSAs were tempered by declines in government payrolls.
The Memphis Zone’s unemployment rate averaged 8.1 percent in the fourth quarter, down appreciably from the previous quarter’s average of 8.5 percent. Labor market conditions remained the strongest in the Jonesboro, Ark., MSA.
Residential housing market conditions in the Zone’s three MSAs were mixed in 2014. Growth of single-family building permits outpaced the nation’s growth, but house price gains trailed those seen nationally. Apartment construction surged in the Memphis MSA in 2014.
Helped by falling gasoline prices, retailers and restaurateurs in northeast Arkansas and northwest Mississippi reported strong sales in early 2015. However, automotive loan delinquency rates in the Zone rose in the fourth quarter for the first time since mid-2011.
Loan demand appears to be strengthening, according to a recent survey of commercial bankers. In the fourth quarter, profits at Tennessee and Mississippi banks trailed their U.S. peers, while profits at Arkansas banks exceeded their U.S. peers.
Farmers continued to shift land from cotton production to corn, soybeans and sorghum production. Wheat plantings were lower in 2015.
View the entire Memphis Zone report at http://research.stlouisfed.org/regecon/burgundybooks/15/03/BB0315Mem.pdf.
The next Burgundy Books will be released June 23, 2015.