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About


The Atlanta Fed's SouthPoint offers commentary and observations on various aspects of the region's economy.

The blog's authors include staff from the Atlanta Fed's Regional Economic Information Network and Public Affairs Department.

Postings are weekly.


January 16, 2014

The Beige Book Looks Rosy

The Federal Reserve released the first Beige Book of 2014 on January 15. To prepare the Beige Book—published eight times per year—each Reserve Bank gathers anecdotal information on current economic conditions in its district through reports from Bank and branch directors and interviews with key business contacts, economists, market experts, and other sources.

The first paragraph from the national summary began with this sentence:

Reports from the twelve Federal Reserve Districts suggest economic activity continued to expand across most regions and sectors from late November through the end of the year.

The Atlanta Fed was one of two Reserve Banks that saw conditions improve compared with the previous reporting period. Overall, we said that “[b]usiness contacts indicated that from late November through December overall economic conditions improved moderately in the Sixth District.”

Below are highlights from our report, beginning with the important sections on employment and inflation:

  • Businesses did not indicate a significant pickup in hiring, nor did they report any staff reductions. Businesses continued to employ technology and utilized overtime and contract labor as an alternative to increasing permanent staff. Contacts in manufacturing, construction, professional, and energy sectors report persistent difficulty in finding qualified workers. On balance, many firms expressed continued hesitancy caused by concerns about healthcare reform in terms of their overall hiring plans.
  • Cost pressures remained mostly stable, according to business contacts. Healthcare was the most cited exception, with reports of larger cost and price increases than usual. Merit increases remained in the 1 to 3 percent range. However, skilled and professional positions in energy, construction, information technology, and logistics continued to see above-average wage increases and higher starting pay. Year-ahead unit costs expectations were 1.9 percent in December, unchanged for the fourth consecutive month, according to the Atlanta Fed's survey on business inflation expectations.

Most sectors of the regional economy reported a solid start to the new year:

  • District merchants noted positive year-over-year holiday sales growth, with online sales outpacing traditional store sales.
  • The hospitality sector continued to experience the same solid pace of activity that it had all year long.
  • Residential housing brokers noted that existing home sales growth continued to slow, while homebuilders experienced modest growth in new home sales.
  • Commercial contractors described construction activity as improving, especially in the multifamily segment of the market.
  • Manufacturers indicated that overall activity strengthened since the previous report.
  • Capacity utilization in the energy industry remained near historic highs, and deep water oil exploration in the Gulf of Mexico increased.

Atlanta Fed business contacts held a positive outlook heading into 2014. Atlanta Fed President Dennis Lockhart shared this view in a speech delivered to the Rotary Club of Atlanta on January 13, where he said:

I expect the stronger pace of economic growth in the second half of 2013 to continue in 2014. My current view is that real GDP will expand between 2.5 and 3 percent this year, and I would not be surprised if we achieve results at the upper end of this range.

A new year often breeds optimism, sometimes misplaced. But based on our view of the data and what our business contacts are saying, we think that being optimistic this January is justified.

Photo of Michael ChrisztBy Michael Chriszt, a vice president in the Atlanta Fed’s public affairs department


October 31, 2013

Acadiana Spotlight: Optimistic about Local Real Estate Conditions

You may recall that my Atlanta Fed colleague Rebekah Durham and I reported on housing conditions in southeast Louisiana in our July 22 SouthPoint post. I recently returned from another trip to Louisiana; this time, my colleagues from the Regional Economic Information Network at the New Orleans Branch of the Atlanta Fed invited me to join them as they touched base with real estate contacts in the Acadiana region, which encompasses the city of Lafayette and the surrounding parishes. I’m happy to report that our real estate business contacts were quite optimistic on both the residential and commercial real estate fronts.

Contacts indicated that the Lafayette area has experienced tremendous growth over the past year, thanks in large part to the energy sector. However, they were quick to point out that growth in the energy sector only serves as “four of the cylinders in an eight-cylinder engine,” as they described growth in medical, fiber, technology, and petrochemical fields as other drivers of growth. Business contacts mentioned that several companies are in the process of relocating high-paying executive positions as well as management positions to the Lafayette metropolitan statistical area. This growth has had quite a positive impact on the local real estate markets.

On the commercial real estate side, contacts reported that a fair amount of construction activity is taking place in the industrial and retail sectors, with considerable construction of medical office space also under way. Contacts indicated that this increased construction activity has been steady during the past year and a half and encompassed both existing firms wanting to expand their space and firms new to the area undertaking construction. Commercial real estate brokers expressed little to no difficulty in leasing existing space.

On the residential real estate side, business contacts reported that home sales are up more than 13 percent from a year earlier. Contacts indicated that the jump in mortgage rates seems to have raised demand more than it deterred potential buyers. Though new listings are up more than 17 percent year over year, contacts noted that the months’ supply of homes for sale dropped from 6.5 months to 5.3 months. Moreover, home prices have increased almost 2 percent from a year earlier, according to the Federal Housing Finance Agency’s quarterly house price index.

All said, contacts expect 2014 and 2015 to be even better than 2013 was. They pointed out that these large infrastructure investments by area businesses send a strong signal that the energy sector will not be leaving the area any time soon. As the nearby port expansions wrap up, more rigs come online, and manufacturing and petrochemical plants open their doors, business contacts are confident that an increase in real estate demand will follow.

Photo of Jessica DillBy Jessica Dill, senior economic research analyst in the Atlanta Fed’s research department


October 29, 2013

Tourism Update: Demand for Southern Exposure Remains Strong

On October 8 in sunny South Florida, the Miami Branch of the Atlanta Fed hosted our Travel and Tourism Council for the second semiannual meeting of 2013. Business leaders and hospitality industry experts spoke about current economic conditions and their outlook for the sector. The environment in the meeting was generally positive as each member shared news and plans for growth. The meeting took place during the partial federal government shutdown, so it was interesting to hear what effects if any the shutdown was having on the hospitality industry.

According to council members, the region’s hospitality industry has been growing at a reasonably fast clip as growth in business and leisure travel has more than made up for declines in government travel over the past year. Most contacts reported robust growth in tourism activity and anticipated that the fourth quarter of 2013 is likely to continue to be fairly strong, though it may not outpace the third quarter. South Florida in particular is enjoying an increase in visitors. According to a recent newsletter from the Greater Miami Convention & Visitors Bureau, demand for travel to Greater Miami and its beaches remained strong from January through September of this year, ranking fourth among the top 25 U.S. markets in both revenue per available room (RevPAR, a widely used industry metric) and average daily room rate. The area also ranked fifth in hotel room occupancy rates. Tourism professionals there have an optimistic outlook for the next year.

We heard from our council that hospitality employment continues to grow at a solid pace, especially in the hotel business. Firms are reportedly having little trouble finding qualified candidates to fill new positions. Consistent with reports from other sectors of the economy, the tourism industry is seeing a very high applicant-to-opening ratio, with applicants often considered overqualified for available positions. Apart from the ongoing problem of having difficulty attracting specialized skill sets or lower-skill workers willing to relocate to areas with a high cost of living, filling openings has been reasonably easy. (The cruise industry was a notable exception, where lower demand from U.S. and European travelers has prompted industrywide downsizing.)

Council members cited the hospitality industry’s two main concerns regarding the partial federal government shutdown: one was the increased time required at airports to clear customs and security, and the second was the closure of national parks. Some of our airport contacts did confirm longer security lines and longer times to clear customs. In many cases, tourists who had booked tours including visits to a national park shifted to visiting nearby privately owned alternatives. The government shutdown prompted the need for an overseas communication campaign. Since a large portion of southeastern tourism is international, the industry had to clarify any misunderstanding about the U.S. government shutdown, particularly to European tourists and booking agents. The general assumption was that a “U.S. government shutdown” is a full shutdown, similar to strike-related shutdowns that have taken place in other countries. The campaign seems to have been successful thus far; council members had not seen any tour or booking cancellations as a result of the government shutdown.

Council members’ outlook for growth over the next three months was strong as the winter season kicks off. According to our industry contacts, the first two quarters of 2014 are showing strong advance bookings in the hotel sector, and the growth outlook for the cruise industry is in the single digits. Overall, the outlook for 2014 is optimistic, though there was a tone of wariness about the impact of fiscal policy uncertainty on business and consumer confidence. For now, at least, the future is sunny and bright for the hospitality sector in the Southeast.

By Gloria Guzman, an economic and financial education specialist at the Miami Branch of the Atlanta Fed


August 15, 2013

Cleveland Rocks!

Readers of SouthPoint will recall my affinity for Cleveland’s professional sports teams. It’s been a long time since we have won anything (1964, to be exact; the year BEFORE I was born, by the way). But I’ll proclaim the drought partially over with Jason Dufner’s recent win at the PGA Championship. “Duf” is a Cleveland native, so I think that should count. He’s also lived in the Southeast and went to college here, so it’s a win for the Sixth Federal Reserve District as well.

Since I’m not a sportswriter, I’ll cut right to the point of the Cleveland link. It’s not really a link between Cleveland, Ohio, and sports victories. It’s a link between Cleveland, Tennessee, and economic victories.

According to data from the U.S. Bureau of Labor Statistics, the Cleveland, Tennessee metro area has experienced the largest increase in total employment (on a percent change basis) since the onset of the national recession in late 2007, at 7.8 percent. It appears that Cleveland is benefiting from its proximity to the Volkswagen auto manufacturing plant in Chattanooga and the rebound in national housing, which has increased demand for household durables—something that is benefiting the Whirlpool appliance manufacturing plant in Cleveland, as an Atlanta Fed publication recently noted.

Hinesville-Fort Stewart, Georgia, is next on the list with a 7.7 percent gain since December 2007. Much of that gain is no doubt tied to military base adjustments, as are the gains logged by Clarksville, Tennessee, and Warner Robins, Georgia. Nashville’s 6 percent increase is perhaps the most impressive and has the most impact, as it represents a net increase of 46,300 jobs. Knoxville is the other Tennessee metro area whose current employment levels are ahead of December 2007 readings.

In Louisiana, employment levels in the cities of Lafayette, New Orleans, and Baton Rouge are currently above prerecession levels. Alabama has two metro areas in positive territory: Auburn-Opelika and Tuscaloosa. Currently, Auburn is ahead of Tuscaloosa in terms of employment gains, and I will diplomatically refrain from making any analogies to college football...

The following table lists the region’s metro areas and shows the net change in total employment from December 2007 to June 2013 in terms of both total and percent change. What stands out is the fact that just 11 of the 65 metro areas in the region are at employment levels that are higher than they were in December 2007. It’s sobering to think that employment levels, although improving, are still so far below prerecession levels in most the of region.



That said, it is just as important to acknowledge that the region’s labor markets are improving. The chart below shows the level of total employment and the unemployment rate for the six states that are wholly or partially in the Atlanta Federal Reserve’s District (Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennessee).



As Atlanta Fed President Dennis Lockhart noted in his August 13 speech to the Atlanta Kiwanis,

We have continued to see steady progress in economic fundamentals, in my opinion. Progress is evident, and we should not lose sight of that.

Photo of Mike ChrisztBy Mike Chriszt, a vice president in the Atlanta Fed’s public affairs department


January 16, 2014

The Beige Book Looks Rosy

The Federal Reserve released the first Beige Book of 2014 on January 15. To prepare the Beige Book—published eight times per year—each Reserve Bank gathers anecdotal information on current economic conditions in its district through reports from Bank and branch directors and interviews with key business contacts, economists, market experts, and other sources.

The first paragraph from the national summary began with this sentence:

Reports from the twelve Federal Reserve Districts suggest economic activity continued to expand across most regions and sectors from late November through the end of the year.

The Atlanta Fed was one of two Reserve Banks that saw conditions improve compared with the previous reporting period. Overall, we said that “[b]usiness contacts indicated that from late November through December overall economic conditions improved moderately in the Sixth District.”

Below are highlights from our report, beginning with the important sections on employment and inflation:

  • Businesses did not indicate a significant pickup in hiring, nor did they report any staff reductions. Businesses continued to employ technology and utilized overtime and contract labor as an alternative to increasing permanent staff. Contacts in manufacturing, construction, professional, and energy sectors report persistent difficulty in finding qualified workers. On balance, many firms expressed continued hesitancy caused by concerns about healthcare reform in terms of their overall hiring plans.
  • Cost pressures remained mostly stable, according to business contacts. Healthcare was the most cited exception, with reports of larger cost and price increases than usual. Merit increases remained in the 1 to 3 percent range. However, skilled and professional positions in energy, construction, information technology, and logistics continued to see above-average wage increases and higher starting pay. Year-ahead unit costs expectations were 1.9 percent in December, unchanged for the fourth consecutive month, according to the Atlanta Fed's survey on business inflation expectations.

Most sectors of the regional economy reported a solid start to the new year:

  • District merchants noted positive year-over-year holiday sales growth, with online sales outpacing traditional store sales.
  • The hospitality sector continued to experience the same solid pace of activity that it had all year long.
  • Residential housing brokers noted that existing home sales growth continued to slow, while homebuilders experienced modest growth in new home sales.
  • Commercial contractors described construction activity as improving, especially in the multifamily segment of the market.
  • Manufacturers indicated that overall activity strengthened since the previous report.
  • Capacity utilization in the energy industry remained near historic highs, and deep water oil exploration in the Gulf of Mexico increased.

Atlanta Fed business contacts held a positive outlook heading into 2014. Atlanta Fed President Dennis Lockhart shared this view in a speech delivered to the Rotary Club of Atlanta on January 13, where he said:

I expect the stronger pace of economic growth in the second half of 2013 to continue in 2014. My current view is that real GDP will expand between 2.5 and 3 percent this year, and I would not be surprised if we achieve results at the upper end of this range.

A new year often breeds optimism, sometimes misplaced. But based on our view of the data and what our business contacts are saying, we think that being optimistic this January is justified.

Photo of Michael ChrisztBy Michael Chriszt, a vice president in the Atlanta Fed’s public affairs department


October 31, 2013

Acadiana Spotlight: Optimistic about Local Real Estate Conditions

You may recall that my Atlanta Fed colleague Rebekah Durham and I reported on housing conditions in southeast Louisiana in our July 22 SouthPoint post. I recently returned from another trip to Louisiana; this time, my colleagues from the Regional Economic Information Network at the New Orleans Branch of the Atlanta Fed invited me to join them as they touched base with real estate contacts in the Acadiana region, which encompasses the city of Lafayette and the surrounding parishes. I’m happy to report that our real estate business contacts were quite optimistic on both the residential and commercial real estate fronts.

Contacts indicated that the Lafayette area has experienced tremendous growth over the past year, thanks in large part to the energy sector. However, they were quick to point out that growth in the energy sector only serves as “four of the cylinders in an eight-cylinder engine,” as they described growth in medical, fiber, technology, and petrochemical fields as other drivers of growth. Business contacts mentioned that several companies are in the process of relocating high-paying executive positions as well as management positions to the Lafayette metropolitan statistical area. This growth has had quite a positive impact on the local real estate markets.

On the commercial real estate side, contacts reported that a fair amount of construction activity is taking place in the industrial and retail sectors, with considerable construction of medical office space also under way. Contacts indicated that this increased construction activity has been steady during the past year and a half and encompassed both existing firms wanting to expand their space and firms new to the area undertaking construction. Commercial real estate brokers expressed little to no difficulty in leasing existing space.

On the residential real estate side, business contacts reported that home sales are up more than 13 percent from a year earlier. Contacts indicated that the jump in mortgage rates seems to have raised demand more than it deterred potential buyers. Though new listings are up more than 17 percent year over year, contacts noted that the months’ supply of homes for sale dropped from 6.5 months to 5.3 months. Moreover, home prices have increased almost 2 percent from a year earlier, according to the Federal Housing Finance Agency’s quarterly house price index.

All said, contacts expect 2014 and 2015 to be even better than 2013 was. They pointed out that these large infrastructure investments by area businesses send a strong signal that the energy sector will not be leaving the area any time soon. As the nearby port expansions wrap up, more rigs come online, and manufacturing and petrochemical plants open their doors, business contacts are confident that an increase in real estate demand will follow.

Photo of Jessica DillBy Jessica Dill, senior economic research analyst in the Atlanta Fed’s research department


October 29, 2013

Tourism Update: Demand for Southern Exposure Remains Strong

On October 8 in sunny South Florida, the Miami Branch of the Atlanta Fed hosted our Travel and Tourism Council for the second semiannual meeting of 2013. Business leaders and hospitality industry experts spoke about current economic conditions and their outlook for the sector. The environment in the meeting was generally positive as each member shared news and plans for growth. The meeting took place during the partial federal government shutdown, so it was interesting to hear what effects if any the shutdown was having on the hospitality industry.

According to council members, the region’s hospitality industry has been growing at a reasonably fast clip as growth in business and leisure travel has more than made up for declines in government travel over the past year. Most contacts reported robust growth in tourism activity and anticipated that the fourth quarter of 2013 is likely to continue to be fairly strong, though it may not outpace the third quarter. South Florida in particular is enjoying an increase in visitors. According to a recent newsletter from the Greater Miami Convention & Visitors Bureau, demand for travel to Greater Miami and its beaches remained strong from January through September of this year, ranking fourth among the top 25 U.S. markets in both revenue per available room (RevPAR, a widely used industry metric) and average daily room rate. The area also ranked fifth in hotel room occupancy rates. Tourism professionals there have an optimistic outlook for the next year.

We heard from our council that hospitality employment continues to grow at a solid pace, especially in the hotel business. Firms are reportedly having little trouble finding qualified candidates to fill new positions. Consistent with reports from other sectors of the economy, the tourism industry is seeing a very high applicant-to-opening ratio, with applicants often considered overqualified for available positions. Apart from the ongoing problem of having difficulty attracting specialized skill sets or lower-skill workers willing to relocate to areas with a high cost of living, filling openings has been reasonably easy. (The cruise industry was a notable exception, where lower demand from U.S. and European travelers has prompted industrywide downsizing.)

Council members cited the hospitality industry’s two main concerns regarding the partial federal government shutdown: one was the increased time required at airports to clear customs and security, and the second was the closure of national parks. Some of our airport contacts did confirm longer security lines and longer times to clear customs. In many cases, tourists who had booked tours including visits to a national park shifted to visiting nearby privately owned alternatives. The government shutdown prompted the need for an overseas communication campaign. Since a large portion of southeastern tourism is international, the industry had to clarify any misunderstanding about the U.S. government shutdown, particularly to European tourists and booking agents. The general assumption was that a “U.S. government shutdown” is a full shutdown, similar to strike-related shutdowns that have taken place in other countries. The campaign seems to have been successful thus far; council members had not seen any tour or booking cancellations as a result of the government shutdown.

Council members’ outlook for growth over the next three months was strong as the winter season kicks off. According to our industry contacts, the first two quarters of 2014 are showing strong advance bookings in the hotel sector, and the growth outlook for the cruise industry is in the single digits. Overall, the outlook for 2014 is optimistic, though there was a tone of wariness about the impact of fiscal policy uncertainty on business and consumer confidence. For now, at least, the future is sunny and bright for the hospitality sector in the Southeast.

By Gloria Guzman, an economic and financial education specialist at the Miami Branch of the Atlanta Fed


August 15, 2013

Cleveland Rocks!

Readers of SouthPoint will recall my affinity for Cleveland’s professional sports teams. It’s been a long time since we have won anything (1964, to be exact; the year BEFORE I was born, by the way). But I’ll proclaim the drought partially over with Jason Dufner’s recent win at the PGA Championship. “Duf” is a Cleveland native, so I think that should count. He’s also lived in the Southeast and went to college here, so it’s a win for the Sixth Federal Reserve District as well.

Since I’m not a sportswriter, I’ll cut right to the point of the Cleveland link. It’s not really a link between Cleveland, Ohio, and sports victories. It’s a link between Cleveland, Tennessee, and economic victories.

According to data from the U.S. Bureau of Labor Statistics, the Cleveland, Tennessee metro area has experienced the largest increase in total employment (on a percent change basis) since the onset of the national recession in late 2007, at 7.8 percent. It appears that Cleveland is benefiting from its proximity to the Volkswagen auto manufacturing plant in Chattanooga and the rebound in national housing, which has increased demand for household durables—something that is benefiting the Whirlpool appliance manufacturing plant in Cleveland, as an Atlanta Fed publication recently noted.

Hinesville-Fort Stewart, Georgia, is next on the list with a 7.7 percent gain since December 2007. Much of that gain is no doubt tied to military base adjustments, as are the gains logged by Clarksville, Tennessee, and Warner Robins, Georgia. Nashville’s 6 percent increase is perhaps the most impressive and has the most impact, as it represents a net increase of 46,300 jobs. Knoxville is the other Tennessee metro area whose current employment levels are ahead of December 2007 readings.

In Louisiana, employment levels in the cities of Lafayette, New Orleans, and Baton Rouge are currently above prerecession levels. Alabama has two metro areas in positive territory: Auburn-Opelika and Tuscaloosa. Currently, Auburn is ahead of Tuscaloosa in terms of employment gains, and I will diplomatically refrain from making any analogies to college football...

The following table lists the region’s metro areas and shows the net change in total employment from December 2007 to June 2013 in terms of both total and percent change. What stands out is the fact that just 11 of the 65 metro areas in the region are at employment levels that are higher than they were in December 2007. It’s sobering to think that employment levels, although improving, are still so far below prerecession levels in most the of region.



That said, it is just as important to acknowledge that the region’s labor markets are improving. The chart below shows the level of total employment and the unemployment rate for the six states that are wholly or partially in the Atlanta Federal Reserve’s District (Alabama, Florida, Georgia, Louisiana, Mississippi, and Tennessee).



As Atlanta Fed President Dennis Lockhart noted in his August 13 speech to the Atlanta Kiwanis,

We have continued to see steady progress in economic fundamentals, in my opinion. Progress is evident, and we should not lose sight of that.

Photo of Mike ChrisztBy Mike Chriszt, a vice president in the Atlanta Fed’s public affairs department