Twelve of 23 business activity indicators for the Milwaukee area posted gains in October, matching the smallest number of positives posted this year, according to a monthly report by the Metropolitan Milwaukee Association of Commerce (MMAC).
October’s 12 improvements are down from 13 upward pointing indicators posted in September.
Milwaukee’s economy has struggled in recent months to find a firm foundation for healthy growth. “Yearover-year job gains continued in October but at its slowest pace in over one year and some local unemployment indicators have started to show signs of weakness.”
Highlights of the report include:
• Nonfarm employment in the metro area averaged 827,900 in October, a 0.8% increase from one year ago. October’s gain was down from the 2.3% increase registered in September and marks the slowest year-over-year increase posted in over one year.
• Among major industry sectors, four of ten registered year-over-year job increases in October, five recorded declines and one was unchanged. The leisure and hospitality sector posted the largest percentage job gain, up 8.5%, while the largest decline fell in the construction, mining & natural resources sector, down 4.6%.
• New car registrations rebounded from consecutive months of decline. Registrations rose at a 6.9% pace in October (vs. October, 2010) and have cumulatively increased 5.4% over 2011’s first 10 months.
The trend in area unemployment indicators has weakened in recent months. The number of unemployed has changed little over the past two months. October’s 0.2% decline (vs. year-ago levels) to 59,800 matches the 0.2% decrease posted in September. New unemployment compensation claims rose 12.6% in October, this indicator’s third consecutive year-over-year increase and the largest posted since August, 2009.
For the first time since April, 2010, the metro area’s unemployment rate failed to show improvement from year-ago levels. The seasonally unadjusted unemployment rate for October stood at 7.5%, unchanged from one year ago. Metro Milwaukee’s rate ranks higher than Wisconsin’s 6.8% rate but is below the 8.5% figure posted nationally.
Indicators: October, 2011 vs. October, 2010.
Overall job growth weakened significantly in October. Jobs grew at a 0.8% pace (to 827,900) for the month, marking the 16th consecutive month of year-over-year growth, but October’s pace of growth was the slowest posted since September, 2010.
October job gains were recorded in four of ten major industry sectors. The leisure & hospitality sector’s 8.5% increase ranked as the largest year-over-year gain among growing sectors. Gains were also posted in the other services (up 3.8%), manufacturing (up 3.6%), and trade, transportation & utilities (up 1.7%) sectors.
Five of ten sectors registered job declines. The largest percentage decrease was posted in the construction, mining and natural resources sector (down 4.6%). Other declines fell in the financial activities (down 3.4%), professional & business services (down 3.1%), information (down 2.6%), and educational & health services (down 0.5%) sectors. Employment in the government sector was unchanged from year-ago levels.
Manufacturing related indicators for October were generally positive. Manufacturing employment overall rose at a 3.6% pace while the average workweek for production workers rose 4.1% to 43.2 hours, up from September’s 3.9% gain. Earnings indicators for production workers were mixed. Average weekly earnings increased 2.6% in October, to $766, while average hourly earnings fell for the sixth consecutive month – down 1.4%, to $17.72.
Mixed results were posted in local housing & real estate indicators. Existing homes sales rose 23.7% in October to 881, following a 34.8% gain in September (vs. September, 2010).
October’s gain marks the fourth consecutive year-over-year gain, all double-digit in magnitude. On the other hand, mortgage numbers continue to move downward. The number of mortgages recorded in Milwaukee County fell 25.6% in October, this indicator’s ninth consecutive decline.
Metro area new-car registrations numbered 1,992 in October, a 6.9% increase from one year ago. October’s increase follows year-over-year declines of 5.5% and 6.1% in September and August, respectively.
Air passenger totals at Mitchell International fell for the fifth consecutive month.
Passenger numbers totaled 779,432 in October, down 6.6% from one year ago.
Other Indicators (latest available):
The value of signed construction contracts, as reported by F.W. Dodge for September, was $67 million, down 6.2% from September, 2010.
Consumer prices nationally, as measured by the Consumer Price Index for Urban Consumers (CPI-U), rose 3.5% in October (vs. October, 2010) to 226.421 (1981-84=100). The Milwaukee area CPI-U reached 215.646 for the first half of 2011, a 3.3% increase from 2010’s first half.
Bret Mayborne is the economic research director at the Metropolitan Milwaukee Association of Commerce.
