Exports Impact on State GDP, the Fed Speaks and Musings About the First Friday Report

Categories: Commentary, Uncategorized |

April 7, 2014

This weekly commentary has tried to bring you fresh insights, different perspectives and, occasionally, an opinion or two.  The objective has been and continues to be to offer the reader perspective based on current economic and demographic data as opposed to waiting for stale financial data – or as a recent client noted, “I don’t drive my car looking in the rearview mirror, why would I do my credit work looking at financials that are more than six months old when released.”  I couldn’t have said it better myself.  In this vein, I spend this week offering perspective regarding State Exports, the Philly Fed and a quick look at the First Friday Report.

State Exports and State GDP

With global leaders acting like it is still the Cold War, I thought it would be instructive to take a look at year on year Exports by State.  The table below highlights the 30 States that saw their level of exports decline from February 2014 back to February 2013.  While some may blame the weather, I am not buying it – if the demand is there, once the weather clears, the exports flow.  Wanting to create a real context for what this decline might mean to those States in terms of tax receipts and possibly employment, I focused on Exports as a Percentage of GDP.  What stands out to me are those States that saw a decline of more than 5% and those more reliant on exports than the National average of 11.76%.  For readers with access to DIVER Analytics or Data Services, consider the below parameters against your positions.  For States of concern, you can go a step further and explore the largest trading partners for each State as well as the breakdown of Employment by Industry.  This can be instructive as one contemplates the impact of the below figures as well as the fragile state of our relations with our trading partners.


DIVER Analytics, Filter and Data Access Modules; USCB and BLS.

The Fed Speaks and Geo Score Relevance

Each time the Fed speaks, the pundits offer their read on the tea leaves and, in some cases, their criticism for what was or was not said.  Last week was no exception with Chair Yellen offered her view on the importance of enhancing employment and citing three real-life examples only to have some criticize her for pointing to two who had criminal records.  Before I take a quick look at the First Friday report, I thought I would look at what the Philly Fed thinks will happen over the next six months – yes, a look ahead.

The Philly Fed’s Leading Index, which predicts the six month growth rate of the State’s Coincident Index, forecasts an average increase of the State’s Coincident Indices of 1.52% and predicts that only 15 States will show growth of 2% or more in their Coincident Index over the next six months.  These States are highlighted in yellow, green and blue below.

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DIVER Map Module; Fed. Reserve Bank of Phil.

First off, it may be worth looking at this data against State budgets. Moreover, important to consider is the reality that the Coincident Index and Leading Index do not contemplate Export data and the reliance of States on the same as a component aspect of their GDP.  Just may be worth taking a closer look at States with lower forecasted growth and those in our first table.

Last week, the March Geo Scores were released for each State, County and about 350 Cities.  As you contemplate the above points, I suggest you also look to the Geo Score to see how the State (County or City too) fare on a relative basis and v. one year prior.

First Friday

From a top line perspective, the markets got what they, more or less, expected with 192,000 jobs added and the jobless or unemployment rate staying at 6.7%.  The highlight for many was that the number of people employed in the private sector has finally surpassed the level prior to the Great Recession (not so for the public sector).  The other positive sign is that more people are in the Labor Force (let the debate go on about the efficacy of long-term unemployment benefits) than one month or one year ago.  However, and this is why I decided to provide you with one of the tables from the BLS released on Friday, while the labor force is up and the unemployment rate is heading in the right direction, the Labor Force Participation Rate is actually below where it was one year prior.  While my comments are focused around the US level data, the DIVER platform has State, county and City level data that allows you to assess those areas important to you or your clients.

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One last point on the First Friday report, Labor Underutilization (also known as ‘U6’) is at 12.7% (up slightly from last month).  U6 is the category of those folks working less than they would like – an example being part-time employment.  While we do not get this data at the State level each month, I thought it worthwhile to provide you the State level data last provided.

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DIVER Map Module; BLS.

This week, the team will be in NYC (Mike, Tim, Pete and Gregg) and Dallas (Mike and Gregg).   Let us know if you would like us to visit.

Have a great week. 


Gregg L. Bienstock Esq.
CEO & Co-Founder, Lumesis, Inc.


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