Local economics — some good, some badThe UW-River Falls Center for Economic Research (CER) in partnership with St. Croix Economic Development Corporation (SCEDC) has released the latest edition of the St. Croix Valley Economic Dashboard and the news is somewhat “mixed.”
The UW-River Falls Center for Economic Research (CER) in partnership with St. Croix Economic Development Corporation (SCEDC) has released the latest edition of the St. Croix Valley Economic Dashboard and the news is somewhat “mixed.”
The dashboard is a snapshot of the economic condition of the labor, consumer and housing markets in the three-county St. Croix Valley. It presents the latest available data in one convenient package and can be viewed on the CER’s website at www.uwrf.edu/cer.
Dr. Logan Kelly, director of the CER, conducts research for the Dashboard project and offered his comments on several subjects:
“The unemployment rate declined in the valley for the first time since October 2010, indicating that the recovery of the job market may be picking up steam,” Logan said. “The unemployment was driven lower by the first increase in total employment since June 2010. This, combined with national employment number in which the nation created 244,000 jobs in April 2011, provide strong evidence that job market conditions will continue to improve.
“However, the unemployment rate in the valley, at 7.9 percent, is still above the state unemployment rate of 7.4 percent.”
Risk to recovery
“Ironically, the lower unemployment rate is currently posing one of the biggest risks to the economic recovery in Wisconsin,” Logan said. “As of April 16, Wisconsin claimants no longer qualify for unemployment benefits under the Federal Extended Benefits Program. While regular and emergency unemployment programs are still in effect, many unemployed Wisconsinites either have exhausted their unemployment benefits or will exhaust them soon.
“Losing one dollar of unemployment benefits translates into a loss of more than one dollar in aggregate spending because of the spending multiplier effect. Thus, as unemployment benefits are exhausted, the already slow pace of recovery could slow even further. In the valley, county sales tax revenues have been declining since September 2010 and declining sales tax revenue indicates decreasing aggregate spending in the region.”
“The housing market remains grim,” Logan said. “In April, median home price in the valley declined 14.5 percent from one year ago to about $130,000, and the S&P Case-Shiller Home Price Index for the Minneapolis metropolitan statistical area has declined for nine consecutive months.
“In fact, the national S&P Case-Shiller Home Price Index for February is at its lowest point since the height of the housing market collapse. Slow progress processing foreclosures, high inventories of unsold homes and the ending of the homebuyer tax credit are contributing to housing market weakness.”
William Rubin, executive director of St. Croix Economic Development Corporation, said being close to the Twin Cities, however, could help the area’s recovery.
“St. Croix’s close proximity to a major economic engine like the Twin Cities will help lead the recovery,” said Rubin. “The valley’s unemployment rate, while high, is in far better shape that other parts of Wisconsin or the upper Midwest. We need consecutive months of improved conditions before encouragement becomes contagious.”
For additional information on the May edition of the St. Croix Valley Economic Dashboard, contact Dr. Logan Kelly at email@example.com or (715) 425-4993 or William Rubin at firstname.lastname@example.org or (715) 381-4383.