First off, I hope everyone had a great holiday be it Passover or Easter. This week I take a look at some data around growth and trends in the economy using the Geo Score as a proxy – this was spurred by the Fed’s April Beige Book. I then take a quick look at State level Employment data for March and conclude with some thoughts (probably better categorized as my opinion) around a proposal by Detroit’s unions to help offset the pension shortfall and impact on their members.
Beige v. Colors of the Geo Score
Last week, the Fed’s April Beige Book (a look at economic conditions across the 12 central Fed bank districts) reported, what was categorized as, “modest to moderate” expansion in eight of the twelve districts (Boston, Philadelphia, Richmond, Atlanta, Minneapolis, Kansas City, Dallas, and San Francisco) while Chicago reported economic growth accelerated with New York and Philadelphia reporting that business activity had rebounded from “weather-related slowdowns” earlier in the year. The Cleveland and St. Louis Districts both reported a decline in economic activity. The map below is simply to provide you a visual depiction of the 12 Federal Reserve Bank districts.
The Federal Reserve Board
How does the Geo Score portray growth and economic health on a relative basis? Lets start with two views of the March 2014 Geo Score – the State Geo Score and the County Geo Score (scores are updated monthly and available for all States and counties and for roughly 350 cities). Seems our largest divergence with the Beige Book is the Atlanta District. Importantly, the Geo Score is a look at the relative score of the State or County and not on an absolute basis.
Another way to look at the Geo Score is on a trend basis – where DIVER by Lumesis looks at the relative change of the economic health over the prior twelve months. The benefit of this view is directionally what the State or County has been experiencing over the preceding twelve months as opposed to their absolute Geo Score for a single point in time (but again, on a relative basis). The trend supports why the Atlanta District is positive and provides support for why the Cleveland and St. Louis Districts are not.
Not being a First Friday, I can take a deep breath and focus on a few factors I think are very meaningful – Job Growth and Labor Force Growth. The short of it – not bad. Worth looking at this data with wage data as well as a fine tooth comb around PT/FT. The results:
Six States saw no or negative Job Growth for the period March 2013-March 2014 (for those watching Puerto Rico closely, not so good)
DIVER Analytics, Filter Module; BLS
39 States saw their Labor Force grow – here are those that didn’t:
DIVER Analytics, Filter Module; BLS
Detroit’s Pension “Fix” – Federal Dollars Requested by Detroit Unions
Detroit seems to be winding its way through the bankruptcy maze and gaining some meaningful settlements to move towards emergence from bankruptcy. When the dust settles, it will be truly worth analyzing to assess winners, losers and how the outcome may affect other distressed (or worse) municipalities. That being said, there was a piece of news last week that, from my perspective, warrants calling to your attention.
Let me start by saying that I am truly sympathetic to the plight of those that worked for years and had a very real expectation of a pension they were promised. However, the issue is that union leaders are looking to have Federal funds originally purposed in 2010 for Michigan homeowners that suffered during the housing crisis to be used to help address a portion of the $3.5 billion underfunded status of the pension plans. And, while the White House says “no bailout,” one can’t help contemplate the political motivations in an election year when, in response to the idea, the White House states “… we continue to support the efforts by state and local officials as they work on Detroit’s revitalization.” Add to this, the White House, as reported by the WSJ, has been under pressure from unions to blunt the impact of the bankruptcy on public sector workers.
First off, the union leaders, not State or local officials, are proposing the idea. The WSJ quoted Governor Snyder’s spokesperson as saying, “We did not ask for this and we are not pushing for this.” Second, funds not used for their intended purpose from the 2010 mandates to help homeowners should be, to the extent not used, returned to the Federal Government (taxpayer’s dollars) to reduce the deficit or be re-purposed by the President and Congress (not by union leaders). Last, and certainly not least, if these funds were to be made available, it would be prudent to condition the receipt of such funds on meaningful reform (part of the overall bankruptcy plan). Perhaps that is not a bad way to go – meaningful reform.
On the Road: Gregg is off to Denver on Tuesday and Mike and Gregg will be in Nashville Wednesday through Friday.
Beige v. Colors of the Geo Score, State Employment and Detroit’s Pension “Fix”
April 21, 2014
First off, I hope everyone had a great holiday be it Passover or Easter. This week I take a look at some data around growth and trends in the economy using the Geo Score as a proxy – this was spurred by the Fed’s April Beige Book. I then take a quick look at State level Employment data for March and conclude with some thoughts (probably better categorized as my opinion) around a proposal by Detroit’s unions to help offset the pension shortfall and impact on their members.
Beige v. Colors of the Geo Score
Last week, the Fed’s April Beige Book (a look at economic conditions across the 12 central Fed bank districts) reported, what was categorized as, “modest to moderate” expansion in eight of the twelve districts (Boston, Philadelphia, Richmond, Atlanta, Minneapolis, Kansas City, Dallas, and San Francisco) while Chicago reported economic growth accelerated with New York and Philadelphia reporting that business activity had rebounded from “weather-related slowdowns” earlier in the year. The Cleveland and St. Louis Districts both reported a decline in economic activity. The map below is simply to provide you a visual depiction of the 12 Federal Reserve Bank districts.
The Federal Reserve Board
How does the Geo Score portray growth and economic health on a relative basis? Lets start with two views of the March 2014 Geo Score – the State Geo Score and the County Geo Score (scores are updated monthly and available for all States and counties and for roughly 350 cities). Seems our largest divergence with the Beige Book is the Atlanta District. Importantly, the Geo Score is a look at the relative score of the State or County and not on an absolute basis.
DIVER Analytics, Map Module; Lumesis DIVER Analytics, Map Module; Lumesis
Another way to look at the Geo Score is on a trend basis – where DIVER by Lumesis looks at the relative change of the economic health over the prior twelve months. The benefit of this view is directionally what the State or County has been experiencing over the preceding twelve months as opposed to their absolute Geo Score for a single point in time (but again, on a relative basis). The trend supports why the Atlanta District is positive and provides support for why the Cleveland and St. Louis Districts are not.
DIVER Analytics, Map Module; Lumesis DIVER Analytics, Map Module; Lumesis
For access to all Geo Scores on a monthly basis, please click here.
Employment Data Observations – State Level
Not being a First Friday, I can take a deep breath and focus on a few factors I think are very meaningful – Job Growth and Labor Force Growth. The short of it – not bad. Worth looking at this data with wage data as well as a fine tooth comb around PT/FT. The results:
DIVER Analytics, Filter Module; BLS
DIVER Analytics, Filter Module; BLS
Detroit’s Pension “Fix” – Federal Dollars Requested by Detroit Unions
Detroit seems to be winding its way through the bankruptcy maze and gaining some meaningful settlements to move towards emergence from bankruptcy. When the dust settles, it will be truly worth analyzing to assess winners, losers and how the outcome may affect other distressed (or worse) municipalities. That being said, there was a piece of news last week that, from my perspective, warrants calling to your attention.
Let me start by saying that I am truly sympathetic to the plight of those that worked for years and had a very real expectation of a pension they were promised. However, the issue is that union leaders are looking to have Federal funds originally purposed in 2010 for Michigan homeowners that suffered during the housing crisis to be used to help address a portion of the $3.5 billion underfunded status of the pension plans. And, while the White House says “no bailout,” one can’t help contemplate the political motivations in an election year when, in response to the idea, the White House states “… we continue to support the efforts by state and local officials as they work on Detroit’s revitalization.” Add to this, the White House, as reported by the WSJ, has been under pressure from unions to blunt the impact of the bankruptcy on public sector workers.
First off, the union leaders, not State or local officials, are proposing the idea. The WSJ quoted Governor Snyder’s spokesperson as saying, “We did not ask for this and we are not pushing for this.” Second, funds not used for their intended purpose from the 2010 mandates to help homeowners should be, to the extent not used, returned to the Federal Government (taxpayer’s dollars) to reduce the deficit or be re-purposed by the President and Congress (not by union leaders). Last, and certainly not least, if these funds were to be made available, it would be prudent to condition the receipt of such funds on meaningful reform (part of the overall bankruptcy plan). Perhaps that is not a bad way to go – meaningful reform.
On the Road: Gregg is off to Denver on Tuesday and Mike and Gregg will be in Nashville Wednesday through Friday.
Have a great week.
Gregg L. Bienstock
CEO & Co-Founder, Lumesis, Inc.
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