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Monthly Archives: April 2009


Here is the latest Cost of Living report from the Council for Community and Economic Research.

The following are the top 5 cities where the cost of living is the highest. The respective  unemployment rates for February and most current median income data were utilized in the analysis.

1. Providence, R.I.
(Providence-Fall River-
Warwick, R.I.-Mass., metro area)

Population: 1.6 million
Cost of Living Index: 122
Median Income: $54,064
February Unemployment Rate: 11.6%

2. Los Angeles, Calif.
(Los Angeles-
Long Beach-Santa Ana, Calif., metro area)

Population: 12.9 million
Cost of Living Index: 148
Median Income: $56,680
February Unemployment Rate: 10.2%

3. Riverside, Calif.
(
RiversideSan Bernardino-Ontario, Calif., metro area)

Population: 4.1 million
Cost of Living Index: 120
Median Income: $54,991
February Unemployment Rate: 12.2%

4. Tampa, Fla.
(
TampaSt. Petersburg-Clearwater, Fla., metro area)

Population: 2.7 million
Cost of Living Index: 96
Median Income: $45,243
February Unemployment Rate: 10.2%

5. Buffalo, N.Y.
(
Buffalo-Niagara Falls, N.Y., metro area)

Population: 1.1 million
Cost of Living Index: 96
Median Income: $44,747
February Unemployment Rate: 9.6%

Four of the five top cities have double digit unemployment as of February. March figures came in slightly higher and April is expected to be higher still. While the jobless rate expands wages remain relatively flat.

In addition, the top five states as of March with the most unemployment are:

NC – 10.8%

CA – 11.2%

SC – 11.4%

OR – 12.1%

MI – 12.6%

The complete list of unemployment rates by state: http://www.bls.gov/web/laumstrk.htm

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One of the most important and reliable Leading Economic Indicators in relation to the Business Cycle is Retail Sales.  Retail Sales are a major part of Consumption- a function of the business cycle and a basis for the Inflation Index as well.

Simplified, aggregate demand, a composite function of personal consumption is the largest component of  the economy, representing approximately 65% or two-thirds of GDP. Two of biggest components of GDP are- Consumer Spending and Trade.

The latest Retail Sales report is out tomorrow and the hope is for some good news. Unfortunately, sales figure reports to this point have all been bad. Shrinking household wealth as a consequence of-  debt, on-going and rising job loss, have curtailed spending to depressed levels.

retail-sales-10y

The first quarter figures will likely show an approximate 2.5% year-over year drop in activity- with predicted March numbers barely in the black at 0.2%. Given that factory output shrunk, unemployment still climbing, loan delinquencies widening and drop off in auto sales- the minute increase could actually be deceiving.

One of the drivers of the predicted o.2% uptick could still be the use of gift cards that were purchased in December 2008. As consumers held on and rationed their spending during the first three months of 2009.

Crude- but effective

A couple crude measures of consumption, though maybe somewhat old-fashioned…is to keep tabs on the local Freight Train and delivery truck activity. Huh? Well, how do you think all those goods get to shelves?

As part of our local surveys, RE has noticed a decisive drop-off in freight train frequency and the length of freight cars. Additionally, the on-road saturation of trailer trucks in the central and northern NJ regions is noticeably less as well.

According to data from the NRF, forecasts for the second quarter call for further decline as well. Normally, a quarter’s worth of consistent data would be good enough to make the call for a trend-in-the-making. Although given the many conflicting data- corrections are sure to be made come Q2.


According to RealtyTrac residential foreclosures in New Jersey jumped 1.96% during the first quarter of 2009, y-o-y and rose a colossal 40% from February 2009.

nj-foreclosures

Q1 official auctions in NJ included 2,293 residential properties as Essex County lead the way with 296. Passaic followed with 217,  as well as Ocean- 217 and Union with 215. These were the top four counties with foreclosures during Q1.

The four top cities with foreclosures were Newark, Paterson, Elizabeth and Dover NJ. Currently NJ ranks 24th in the nation with foreclosure filings.

This latest report clearly shows that the housing  collapse continues to undermine the New Jersey economy.

State economists predict the jobless rate will continue to climb throughout the year which will render more homeowners unable to make mortgage payments and in turn face further foreclosures.


Central New Jersey class A office space is showing signs of life. With a lack of spec building in the overall market, class A vacancy rates have gone from about an appalling 20% to around  5.5%.

Recent data shows most class A units are currently leasing between $24 psf to $28 psf. Although on the flip-side, class B vacancy rates have risen to approximately 13% with lease rates around $18 to $20 psf.

Nationally, office vacancy rates have ticked upward to a four year high in the first quarter of 2009- clocking in at 15.2%. The decline in the amount of occupied space was 24.9 million square feet, the most since September 2001.

office-index-chart

Overall vacancy rates are predicted to reach nearly 20% by years end, while effective rents in Q1 fell approximately 2% with the average rent psf at 24.16. Nearly 50 million square feet of office space is expected to be empty in 2009, but is also expected to begin to fill up in early 2010 as the economy starts its slow, but certain recovery.

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