Across the District, economic conditions varied, with some zones improving faster than others. 2013 ended on a soft note in the Little Rock zone, with employment growth in some cities stronger than in the nation. Overall, Louisville experienced healthy growth; nonfarm employment conditions in the Louisville MSA once again outpaced the nation. While some Memphis-zone sectors outperformed, growth continues to remain slow. Conditions in the St. Louis zone are improving—the unemployment rate in the zone dropped to 6.7 percent, its lowest level in five years.
In St. Louis, about two-thirds of area business contacts expect that local economic conditions will be better this year than last year, while the percentage of respondents who expect conditions to worsen was significantly lower than three months earlier.
60 percent of business contacts in the Louisville zone expect economic conditions to be somewhat better or better in 2014 compared to 2013. Only 12 percent expect conditions to be worse or somewhat worse.
Half of business contacts surveyed in the Memphis zone believe economic conditions will be better in 2014 than 2013, which is a modest improvement from three months earlier. Only 7 percent expect conditions to worsen in 2014.
A sizeable minority of Little Rock business contacts expect some improvement in economic conditions in 2014, while the remainder expect conditions to be about the same as in 2013.
Employment growth across the St. Louis zone’s metropolitan statistical areas (MSAs) was mostly positive in the fourth quarter of 2013 compared with a year earlier, with the zone’s unemployment rate dropping to 6.7 percent, its lowest level in five years.
The Louisville zone’s unemployment rate averaged 7.5 percent in the fourth quarter, down modestly from its third-quarter average of 7.7 percent.
In the fourth quarter, the Memphis zone’s unemployment rate averaged 9.6 percent, essentially unchanged from the previous quarter and much higher than the national average.
The Little Rock zone’s unemployment rate in the fourth quarter averaged 7.2 percent, a slight uptick from the previous two quarters. Regarding zone MSAs, the Fayetteville MSA unemployment rate of 5.5 percent remained appreciably below the U.S. average of 7 percent, while the Little Rock MSA unemployment rate (6.7 percent) was slightly below the national average.
Across most of the Eighth District, business contacts reported growth in housing markets in 2013.
The residential housing and nonresidential property markets improved further in the fourth quarter of 2013. In St. Louis, the industrial market vacancy rate in the fourth quarter was at its lowest level since 2008.
In the Louisville zone, residential construction activity and home sales posted solid gains in most areas. However, house price growth lagged the national rate, increasing by about 3 percent in Louisville and Evansville in 2013 and declining in both Clarksville and Elizabethtown.
Residential housing conditions remain healthy in the Memphis MSA, as house prices and single-family building permits posted robust gains in the fourth quarter. Conditions were generally weaker in other metro areas. The Memphis office vacancy rate in the fourth quarter was the highest among the four major MSAs in the District.
Residential housing market conditions softened in the fourth quarter compared with the previous quarter. In particular, house prices and single-family building permits fell in most areas relative to a year earlier.
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The St. Louis Fed On the Economy blog features relevant commentary, analysis, research and data from our economists and other St. Louis Fed experts.
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