Good economic news from campuses on the campaign trail for August 2014

While these aren't business as usual times, this week has been good news for the business as usual types with the both the good but not great jobs report and the Consumer Confidence Index hitting a post-recession high.  Georgia Tech goes first with Sizzling labor market recovery shifts focus to Fed action from August 1, 2014.

The labor market continued a sizzling pace of economic recovery in July. The economy created 209,000 new jobs while the unemployment rate edged up only incrementally from 6.1 percent to 6.2 percent. However, the latter increase occurred only because 329,000 workers enter the labor market over the last month. According to Thomas "Danny" Boston, an economics professor in the Sam Nunn School of International Affairs, when so many workers enter or re-enter the labor market, it is an optimistic sign that jobs are increasingly available. But the current growth comes with some worries.

The job gains were spread across all key industries, including construction (22,000) and manufacturing (28,000). Private non-goods producing sectors also experienced significant employment gains, including retail trade (26,700), business and professional services (47,000) and health care and social assistance (25,400).

One concerning outcome of the labor market picture is the fact that unemployment among Blacks increased notably from 10.7 percent to 11.4 perecent. However, the increase was caused primarily by over 200,000 Blacks entering or re-entering the labor market in July. Unemployment among whites and Hispanics remained constant at 5.3 percent and 7.8 percent, respectively.

All of the above would be great news if it weren't for the likelihood that the Fed is about to take away the punchbowl of zero interest loans within the year to combat the possibility of inflation.  Paul Krugman thinks this is wrong-headed, but that's a topic for another entry.  Instead, I'll continue on to the University of Michigan, which reported Consumer confidence: Favorable job and wage growth boost spending, also on August 1, 2014.

ANN ARBOR—More rapid job creation, higher wages and gains in household wealth have eased the financial strains on households as well as supported more favorable buying plans for vehicles and household durables, according to the Thomson Reuters/University of Michigan Surveys of Consumers.

Conducted by the U-M Institute for Social Research since 1946, the surveys monitor consumer attitudes and expectations.

While consumers considered their current financial situation to now be in the best shape since the start of the Great Recession, those gains have not caused consumers to confidently expect a continuation of robust growth in the year ahead, said U-M economist Richard Curtin, who directs the surveys.

Nonetheless, confidence is sufficiently high to expand consumption by an annual rate of 2.5 percent in 2014.

Follow over the jump for good news about the state's economy from MSU and better news from Wayne State about the regional economy.

Michigan State University: Food and ag leaders hopeful about industry, state economy
July 22, 2014

Leaders in Michigan’s food and agriculture industry remain optimistic about their businesses, and their confidence in Michigan’s overall economy continues to climb. Those were the results of the Michigan Agriculture and Food Index shared July 22 during the annual Ag Expo VIP breakfast.

The July MAFI is the third of its kind. It gauges the current business climate of the state’s food and agriculture system by surveying 100 influential players in food and agriculture businesses. A rating of 100 on the index is considered neutral; ratings above 100 signal an overall positive outlook, and below 100, an overall negative outlook.

The MAFI for the overall state of food and agriculture has remained steady at 145 or higher since the initial survey was conducted in April 2013. The index rating for the overall state of Michigan’s economy continues to grow from 115 in April 2013 to 120 in January 2014 all the way up to 133 in the most recent survey.

In addition to the two overall scores, the MAFI rates three aspects of the food and ag system in Michigan. The current sales outlook is up slightly to 133, the job outlook hung steady at 126, and the investment outlook rebounded to 116 after dropping to 107 in January 2013.

Wayne State University: Southeast Michigan Purchasing Managers Index rebounds to 60 in July
August 1, 2014

DETROIT— The Southeast Michigan Purchasing Managers Index (PMI) made a strong come back in July reaching 60.0, after experiencing a dramatic drop in June to 47.1 and making July’s numbers much more aligned with those from spring.  However, the dramatic swing caused the three month PMI average to grow more slowly, moving from 53.6 to 55.7.  A PMI value above 50 generally suggests economic growth.

“The return of the PMI in July to 60, is consistent with the months of March, April and May, and suggest that the dramatic drop in June’s PMI was a fluke,” said Nitin Paranjpe, a supply chain faculty member at Wayne State’s School of Business Administration, who interpreted this month’s results.  “Data from the Production Index, New Orders Index and Employment Index all increased in July signaling an expansion in the Southeastern Michigan economy.” 

Though the recent swings in the PMI are reflective of some risk and uncertainty perceived by some respondents, 87 percent see the economy as stable or more stable, with less than 20 percent seeing it as less stable.

July prices were up for packing supplies, lumber, resins, waxes and steel.  Petroleum was down in price.

Professor Farnsworth approves.