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Fourth Quarter Burgundy Books: Most Contacts Optimistic

Tuesday, December 23, 2014

Most Eighth Federal Reserve District business contacts indicated that they expect economic conditions to improve in 2015, according to the St. Louis Fed’s most recent Burgundy Books. When looking at respondents for each of the District’s four zones, two-thirds of respondents in both the St. Louis and Louisville zones said they expected conditions to improve, while the Little Rock Zone saw substantially more optimism about the near-term outlook compared with three months earlier. However, slightly less than half of business contacts surveyed in the Memphis Zone expected economic conditions to improve in 2015.


The unemployment rate in the St. Louis Zone averaged 6.3 percent in the third quarter of 2014, its lowest level since the second quarter of 2008.

The unemployment rate in the Little Rock Zone averaged 6 percent in the third quarter of 2014, similar to the nation’s rate (6.1 percent).

The unemployment rate in the Louisville Zone averaged 6.1 percent in the third quarter of 2014, nearly three-quarters of a percentage point below the previous quarter.

In contrast with the nation, the unemployment rate in the Memphis Zone ticked up from 8.4 percent in the second quarter to 8.5 percent in the third quarter.


Residential housing market activity slowed in the third quarter in most areas in the St. Louis Zone. For example, single-family building permits were below year-earlier levels in three of its four metropolitan statistical areas (MSAs).

Housing activity in the Little Rock Zone was generally weaker than in the nation in the third quarter. However, there were pockets of strength, as evidenced by outsized increases in home prices and single-family building permits in the Texarkana, Ar., MSA.

Residential real estate conditions were mixed in the Louisville Zone in the third quarter.

Residential housing market conditions were mixed in the third quarter in the Memphis Zone. In the Memphis MSA, the pace of house price gains slowed but single-family building permits rebounded smartly. Housing market conditions were weaker in the Jackson, Tenn., MSA but stronger in the Jonesboro, Ark., MSA.

Household Finances

For the first time since mid-2009, households increased their outstanding balances of mortgage and credit card debt. Delinquency rates in the St. Louis zone remained below the national average in the third quarter.

After falling in the second quarter, Arkansas’s per capita credit card balances rose modestly in the third quarter. Still, the state’s debt-to-income ratio fell for the third consecutive quarter.

Growth of per capita personal income accelerated in Indiana and Kentucky in the second quarter. Auto loan balances (per capita) edged lower in the Louisville zone in the third quarter, and delinquency rates remained low.

The pace of deleveraging among households in the Memphis zone slowed markedly in the third quarter. Auto, mortgage, and credit card delinquency rates edged lower.

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