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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.


November 19, 2013

Southeastern Insights: Slow Growth with a Dash of Uncertainty and Caution

The Atlanta Fed's Southeastern Insights report provides a broad summary of economic intelligence gathered through our network of business contacts and other sources throughout the Southeast each Federal Open Market Committee (FOMC) cycle. The latest report covers the period from September 19 to October 30.

As a complement to Southeastern Insights, Adrienne Slack, vice president and regional executive at the Atlanta Fed's New Orleans Branch, discusses the regional economy.

Here are some highlights from the report:

  • Since the previous FOMC cycle, most business contacts expect continued slow growth in the short term. However, several contacts noted a rise in uncertainty tied to the effects of the debt ceiling debate and the government shutdown.
  • Mixed reports from labor markets, combined with renewed uncertainty, have not strengthened employment trends since the previous cycle and have caused many business leaders to delay decisions about hiring new employees. Overall, very few companies reported adding to employment levels as a result of organic growth, regardless of how robust that growth was. Some companies cited paying overtime before hiring new employees unless the new hires were expected to generate revenue.
  • Contacts continued to report stable pricing with no major concerns about inflation; cost pressures were mostly well contained. However, isolated industries that reported minimal cost increases did note that they were able to pass through the increases to their customers (such as fast food, grocery stores, and some construction). Overall, margins remained tight.  Reports indicate wage increases remained stable (mostly in the 2 percent to 3 percent range) across most industries. However, there were scattered reports of upward wage pressures for high-skilled workers.
  • While our contacts expressed some uncertainty and caution, their medium-term outlook is that the economy will continue to improve.

Atlanta Fed President Dennis Lockhart shares this view, and he harbors concern about the likelihood of more robust growth in the near term. In a November 12 speech in Montgomery, Alabama, President Lockhart said that:

My baseline outlook calls for an improved economy in 2014—growing a bit faster than it has been. But that may not happen. There is a nontrivial chance that 2014 will look like 2013. Next year's economic outcomes will swing importantly on fiscal drag and consumer spending.

The concern surrounding fiscal drag is twofold: the level of government spending and the role that uncertainty plays in business decision making. A recent macroblog post noted that:

  • Most firms are expressing more uncertainty,
  • For a significant portion of firms, uncertainty today is having a greater impact than six months ago, and
  • The government is heavily featured as a source of the uncertainty.

Regarding consumer spending, indications are that spending remains cautious. As reported in Southeastern Insights:

Retail industry reports were mixed, yet most contacts described a decline in sales and demand following a slower than expected summer and back to school season. Some retailers also indicated they plan to hire fewer seasonal staff and are less optimistic about the upcoming holiday season. A bright spot in consumer spending continues to come from the strength of high-end consumers; however, their spending has not been significant enough to offset the scaling back by low- to mid-end consumers.

It's clear that what we are hearing from our business contacts demands that we remain cautious regarding the overall economic outlook. As President Lockhart noted in Montgomery:

I remain cautiously optimistic that growth will pick up next year. This is my baseline outlook. But, at this juncture, I can't fully discount the possibility that the expected economic improvement won't materialize and that we'll see a replay of the weak growth of the past three years.

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


June 20, 2013

Rebuild and Reshape

Nearly eight years ago, Hurricane Katrina devastated the Louisiana and Mississippi Gulf Coast. Most of the city of New Orleans was flooded in its wake, and the loss of life and property was tremendous. Having lived through these events, I can look back at the last eight years and feel the pride at what my city has accomplished since Katrina.

New Orleans has rebuilt and continues to reshape itself. As reported in the University of New Orleans Metropolitan Report, the New Orleans metropolitan statistical area population has steadily increased to 89 percent of pre-Katrina levels, to approximately 1.2 million residents (see the chart). In addition, the New Orleans unemployment rate in first quarter 2013 was at 6.4 percent, well below the national average, with major employment gains across several sectors of the region’s economy.

Louisiana and New Orleans region have taken advantage of post-Katrina opportunities, spurring entrepreneurs and business incubators such as Idea Village and becoming a mecca for talented young people moving to the region with jobs trending toward information services. A recent Forbes article ranked New Orleans as the number-one “brain magnet” in the United States in February 2011.

New Orleans is known for many things, including an affordable cost of living, low operating costs for businesses, state tax credits for leading industries, and the quality of life that young entrepreneurs seek. NOLA (as it is called by locals) also leads the state in tourism, hosting national events such as the 2013 Super Bowl, the 2013 Woman’s Final Four, and the annual traditions of Mardi Gras and Jazz Fest, which attract international crowds. Meanwhile, NOLA’s resurgence can be seen in rising commercial construction led by the robust biomedical industry, and urban renewal is driving residential development.

Louisiana and New Orleans have been very busy attaining accolades, and their growth and accomplishments contribute to the Southeast economy. Examples include:

  • April 2013: Bloomberg ranked New Orleans/Metairie/Kenner among the top 12 boomtowns in the country.
  • May 2013: Forbes ranked New Orleans the third-best city for the growth of information technology jobs (publishing, software, entertainment, data processing, and gaming).
  • May 2013: The Louisiana Small Business Development Center (SBDC) Greater New Orleans Region was named the top SBDCs in the nation, earning the U.S. Small Business Administration’s SBDC Excellence and Innovation Award.
  • May 2013: The Southern U. S. Trade Association and World Trade Center in New Orleans ranked Louisiana the number-five export state in the nation.
  • May 2013: A survey in Chief Executive Magazine ranked Louisiana the 11th-best state for business.

While the memories and lessons of Hurricane Katrina remain prominent in our minds, we all can share in the pride as the region continues to build a promising future.

By Gail Psilos, a director of the Regional Economic Information Network in the Atlanta Fed’s New Orleans Branch

September 1, 2010

Thoughts on Hurricane Katrina, five years later

An anniversary is a time of reflection and a time of planning for the future. We marked the fifth anniversary of Hurricane Katrina a few days ago. My first thoughts of reflection go back to the morning when the storm came in. I had planned to get to work early, knowing I would spend the day doing various economic assessments of what damage the hurricane had wrought. But I first had to deal with a disaster of my own. My 9-year-old daughter had left the faucet running into a plugged sink in our upstairs bathroom. Our entire downstairs was flooded. As we did what we could to begin the cleanup, I watched the radar image of Katrina come on land from my wet, but safe, home outside Atlanta. What I would see that day would put our little problem in perspective.

By the time I got into work Katrina was well ashore. It seemed pretty clear that the Mississippi coast had borne the brunt of the storm and New Orleans had been spared a direct hit. As we began to develop briefing materials for the Bank's senior officers, news reports began to roll in describing the devastation in Biloxi, Gulfport, and Pass Christian. We also saw pictures of the damage in New Orleans—hotel windows missing and the torn fabric atop the Superdome. I wrote in one of my first communications of the day that "In New Orleans, structural damage appears severe in places but not catastrophic."

It wasn't until later that day that we began to hear that there was flooding in the Big Easy. From Atlanta, we figured it was the effects of the storm surge through the wetlands bordering St. Bernard Parish, and maybe levees were overtopped. All hurricanes bring storm surge and some flooding, so we didn't think too much of it, to be honest. We were focused on getting damage assessments from the Gulf's energy infrastructure, which we would find out were severe.

Then I read a newswire report that several levees in New Orleans had given way. I had watched a TV special about how New Orleans was vulnerable to hurricane-induced levee breaches, but the storms they described hit New Orleans head on; Katrina had missed to the east. It still didn't register. Then we saw the first photos. The entire city was flooding. It was clear we were dealing with a disaster we were told could happen, but none of us believed it would ever really happen. But it was happening, and like all Americans we felt helpless.

That was five years ago, but we can all remember watching the tragedy unfold like it was yesterday. I remember worrying about my colleagues in our New Orleans office, about the friends I had in Mississippi, and how we could ever be expected to go about our work in trying to measure the impact on the economy in what was clearly an immeasurable human catastrophe.

The response of the Federal Reserve Bank of Atlanta to Hurricane Katrina is documented in our 2005 Annual Report and in several articles and presentations made in the days and months following the event. In the Research Department, we became unwilling experts in disaster economics, never forgetting the heartbreak and human toll of Katrina. The Brookings Institute performed similar exercises, and their latest work is an outstanding look back, and also a look ahead.

I'm fortunate that my work takes me to New Orleans several times a year. I've been able to witness the city's slow but steady recovery and have met some of this country's best and strongest citizens. I've viewed the restoration along the Mississippi coast with awe.

When the most dire predictions were being made regarding the impact of the oil spill, I thought back to Katrina and how these people bounced back with pride and dignity.

As the people who survived and rebuilt five years ago reflect on and plan for the future, I had one recurring thought—not one measured by any economic time series or accounted for in any econometric model. No matter what my friends along the Gulf Coast and New Orleans may face, I wouldn't bet against them. Ever.

By Michael Chriszt, an assistant vice president in the Atlanta Fed's research department

November 19, 2013

Southeastern Insights: Slow Growth with a Dash of Uncertainty and Caution

The Atlanta Fed's Southeastern Insights report provides a broad summary of economic intelligence gathered through our network of business contacts and other sources throughout the Southeast each Federal Open Market Committee (FOMC) cycle. The latest report covers the period from September 19 to October 30.

As a complement to Southeastern Insights, Adrienne Slack, vice president and regional executive at the Atlanta Fed's New Orleans Branch, discusses the regional economy.

Here are some highlights from the report:

  • Since the previous FOMC cycle, most business contacts expect continued slow growth in the short term. However, several contacts noted a rise in uncertainty tied to the effects of the debt ceiling debate and the government shutdown.
  • Mixed reports from labor markets, combined with renewed uncertainty, have not strengthened employment trends since the previous cycle and have caused many business leaders to delay decisions about hiring new employees. Overall, very few companies reported adding to employment levels as a result of organic growth, regardless of how robust that growth was. Some companies cited paying overtime before hiring new employees unless the new hires were expected to generate revenue.
  • Contacts continued to report stable pricing with no major concerns about inflation; cost pressures were mostly well contained. However, isolated industries that reported minimal cost increases did note that they were able to pass through the increases to their customers (such as fast food, grocery stores, and some construction). Overall, margins remained tight.  Reports indicate wage increases remained stable (mostly in the 2 percent to 3 percent range) across most industries. However, there were scattered reports of upward wage pressures for high-skilled workers.
  • While our contacts expressed some uncertainty and caution, their medium-term outlook is that the economy will continue to improve.

Atlanta Fed President Dennis Lockhart shares this view, and he harbors concern about the likelihood of more robust growth in the near term. In a November 12 speech in Montgomery, Alabama, President Lockhart said that:

My baseline outlook calls for an improved economy in 2014—growing a bit faster than it has been. But that may not happen. There is a nontrivial chance that 2014 will look like 2013. Next year's economic outcomes will swing importantly on fiscal drag and consumer spending.

The concern surrounding fiscal drag is twofold: the level of government spending and the role that uncertainty plays in business decision making. A recent macroblog post noted that:

  • Most firms are expressing more uncertainty,
  • For a significant portion of firms, uncertainty today is having a greater impact than six months ago, and
  • The government is heavily featured as a source of the uncertainty.

Regarding consumer spending, indications are that spending remains cautious. As reported in Southeastern Insights:

Retail industry reports were mixed, yet most contacts described a decline in sales and demand following a slower than expected summer and back to school season. Some retailers also indicated they plan to hire fewer seasonal staff and are less optimistic about the upcoming holiday season. A bright spot in consumer spending continues to come from the strength of high-end consumers; however, their spending has not been significant enough to offset the scaling back by low- to mid-end consumers.

It's clear that what we are hearing from our business contacts demands that we remain cautious regarding the overall economic outlook. As President Lockhart noted in Montgomery:

I remain cautiously optimistic that growth will pick up next year. This is my baseline outlook. But, at this juncture, I can't fully discount the possibility that the expected economic improvement won't materialize and that we'll see a replay of the weak growth of the past three years.

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


June 20, 2013

Rebuild and Reshape

Nearly eight years ago, Hurricane Katrina devastated the Louisiana and Mississippi Gulf Coast. Most of the city of New Orleans was flooded in its wake, and the loss of life and property was tremendous. Having lived through these events, I can look back at the last eight years and feel the pride at what my city has accomplished since Katrina.

New Orleans has rebuilt and continues to reshape itself. As reported in the University of New Orleans Metropolitan Report, the New Orleans metropolitan statistical area population has steadily increased to 89 percent of pre-Katrina levels, to approximately 1.2 million residents (see the chart). In addition, the New Orleans unemployment rate in first quarter 2013 was at 6.4 percent, well below the national average, with major employment gains across several sectors of the region’s economy.

Louisiana and New Orleans region have taken advantage of post-Katrina opportunities, spurring entrepreneurs and business incubators such as Idea Village and becoming a mecca for talented young people moving to the region with jobs trending toward information services. A recent Forbes article ranked New Orleans as the number-one “brain magnet” in the United States in February 2011.

New Orleans is known for many things, including an affordable cost of living, low operating costs for businesses, state tax credits for leading industries, and the quality of life that young entrepreneurs seek. NOLA (as it is called by locals) also leads the state in tourism, hosting national events such as the 2013 Super Bowl, the 2013 Woman’s Final Four, and the annual traditions of Mardi Gras and Jazz Fest, which attract international crowds. Meanwhile, NOLA’s resurgence can be seen in rising commercial construction led by the robust biomedical industry, and urban renewal is driving residential development.

Louisiana and New Orleans have been very busy attaining accolades, and their growth and accomplishments contribute to the Southeast economy. Examples include:

  • April 2013: Bloomberg ranked New Orleans/Metairie/Kenner among the top 12 boomtowns in the country.
  • May 2013: Forbes ranked New Orleans the third-best city for the growth of information technology jobs (publishing, software, entertainment, data processing, and gaming).
  • May 2013: The Louisiana Small Business Development Center (SBDC) Greater New Orleans Region was named the top SBDCs in the nation, earning the U.S. Small Business Administration’s SBDC Excellence and Innovation Award.
  • May 2013: The Southern U. S. Trade Association and World Trade Center in New Orleans ranked Louisiana the number-five export state in the nation.
  • May 2013: A survey in Chief Executive Magazine ranked Louisiana the 11th-best state for business.

While the memories and lessons of Hurricane Katrina remain prominent in our minds, we all can share in the pride as the region continues to build a promising future.

By Gail Psilos, a director of the Regional Economic Information Network in the Atlanta Fed’s New Orleans Branch

September 1, 2010

Thoughts on Hurricane Katrina, five years later

An anniversary is a time of reflection and a time of planning for the future. We marked the fifth anniversary of Hurricane Katrina a few days ago. My first thoughts of reflection go back to the morning when the storm came in. I had planned to get to work early, knowing I would spend the day doing various economic assessments of what damage the hurricane had wrought. But I first had to deal with a disaster of my own. My 9-year-old daughter had left the faucet running into a plugged sink in our upstairs bathroom. Our entire downstairs was flooded. As we did what we could to begin the cleanup, I watched the radar image of Katrina come on land from my wet, but safe, home outside Atlanta. What I would see that day would put our little problem in perspective.

By the time I got into work Katrina was well ashore. It seemed pretty clear that the Mississippi coast had borne the brunt of the storm and New Orleans had been spared a direct hit. As we began to develop briefing materials for the Bank's senior officers, news reports began to roll in describing the devastation in Biloxi, Gulfport, and Pass Christian. We also saw pictures of the damage in New Orleans—hotel windows missing and the torn fabric atop the Superdome. I wrote in one of my first communications of the day that "In New Orleans, structural damage appears severe in places but not catastrophic."

It wasn't until later that day that we began to hear that there was flooding in the Big Easy. From Atlanta, we figured it was the effects of the storm surge through the wetlands bordering St. Bernard Parish, and maybe levees were overtopped. All hurricanes bring storm surge and some flooding, so we didn't think too much of it, to be honest. We were focused on getting damage assessments from the Gulf's energy infrastructure, which we would find out were severe.

Then I read a newswire report that several levees in New Orleans had given way. I had watched a TV special about how New Orleans was vulnerable to hurricane-induced levee breaches, but the storms they described hit New Orleans head on; Katrina had missed to the east. It still didn't register. Then we saw the first photos. The entire city was flooding. It was clear we were dealing with a disaster we were told could happen, but none of us believed it would ever really happen. But it was happening, and like all Americans we felt helpless.

That was five years ago, but we can all remember watching the tragedy unfold like it was yesterday. I remember worrying about my colleagues in our New Orleans office, about the friends I had in Mississippi, and how we could ever be expected to go about our work in trying to measure the impact on the economy in what was clearly an immeasurable human catastrophe.

The response of the Federal Reserve Bank of Atlanta to Hurricane Katrina is documented in our 2005 Annual Report and in several articles and presentations made in the days and months following the event. In the Research Department, we became unwilling experts in disaster economics, never forgetting the heartbreak and human toll of Katrina. The Brookings Institute performed similar exercises, and their latest work is an outstanding look back, and also a look ahead.

I'm fortunate that my work takes me to New Orleans several times a year. I've been able to witness the city's slow but steady recovery and have met some of this country's best and strongest citizens. I've viewed the restoration along the Mississippi coast with awe.

When the most dire predictions were being made regarding the impact of the oil spill, I thought back to Katrina and how these people bounced back with pride and dignity.

As the people who survived and rebuilt five years ago reflect on and plan for the future, I had one recurring thought—not one measured by any economic time series or accounted for in any econometric model. No matter what my friends along the Gulf Coast and New Orleans may face, I wouldn't bet against them. Ever.

By Michael Chriszt, an assistant vice president in the Atlanta Fed's research department