Optimism about the 2016 economic outlook improved overall among Eighth District contacts, according to the latest issue of the Burgundy Books.
The Little Rock Zone’s unemployment rate averaged 3.8 percent in the second quarter, its lowest rate on record. Payroll employment growth remained positive.
Payroll employment growth exceeded the nation’s pace in most areas of the Louisville Zone in the second quarter. Contacts reported that the demand for labor is putting upward pressure on wages and salaries.
The Memphis Zone’s unemployment rate fell to 5.4 percent in the second quarter, down 1.3 percentage points from its average in the first quarter. This is its lowest rate since 2001.
Labor market conditions throughout the St. Louis Zone have remained positive. Employment growth stayed moderate, while anecdotal evidence suggests that the labor market has been tightening.
Housing activity remained strong across most areas of the Little Rock Zone in the second quarter. With the exception of the Hot Springs metropolitan statistical area (MSA), single-family building permits grew at double-digit rates on a year-to-date basis. Year-over-year house price gains, however, were in the low single-digit range on average.
Regarding the Louisville Zone, single-family building permits in the Louisville, Clarksville and Evansville MSAs increased sharply in the second quarter, but fell modestly in Elizabethtown. Real estate contacts report vigorous construction activity in the Zone’s industrial space, which may be partially attributable to the Ohio River Bridges Project.
Residential real estate activity continued to strengthen in the Memphis Zone in the second quarter. Single-family building permits rose strongly across the Zone, while year-to-date home sales in the Memphis MSA increased 9 percent from 2015.
Housing and commercial real estate activity continued to strengthen in most areas of the St. Louis Zone in the second quarter. Sales of new and existing homes rose rapidly in the St. Louis MSA, while single-family building permits posted double-digit percentage increases in Springfield and Columbia.
Per capita automotive debt balances in the Little Rock Zone rose nearly 9.5 percent in the second quarter from a year earlier, far outpacing the national rate of 7.7 percent. Meanwhile, per capita credit card debt rose 4.6 percent, nearly triple the national rate of 1.6 percent.
In the Louisville Zone, per capita automotive debt balances continued to rise at rates that exceeded the national rate. Real per capita personal income growth in Indiana and Kentucky was appreciably stronger than the national average in the first quarter.
Per capita automotive debt in the Memphis Zone grew 8.5 percent in the second quarter, outpacing the nation’s growth of 7.7 percent.
Household financial conditions remained stable, as mortgage, credit card and automotive loan delinquency rates remained lower in the St. Louis Zone than in the nation during the second quarter.