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Trend Lines Economic, Fiscal, Demographic and Policy Insights for NH and The Nation Prepared By: Brian Gottlob, PolEcon Research (603) 988-9779

This Month: Southern (Dis)Comfort and Northern Exposure? September, 2012

The NH Leading Index: Muddling Along Waiting for Clarity Highlights: •

Southern (Dis)comfort : NH’s Private Emp. Growth Trends. (pg. 2)

It Isn’t Over Until Small Business Sings. (pg 3)

Exports Sped Recovery But Have Faded as a Source of NH’s Growth. (pg 4)

NH Index of Leading Indicators This Month: What Improved (+) or Declined (-) +

Manufacturing Production

-

Housing Permits

+

Value of Construction

+

NH On-line Help Wanted Advertising

Trend Lines we take a hard and uncomfortable look at recent trends in private sector job growth in NH that may portend longer-term changes in the rate of NH’s job growth and its growth in relation to other states. In addition we examine indicators of the health of small businesses in NH and what the near-term implications are for the broader NH economy. Finally, we briefly look at trends in merchandise exports from the Granite State, how they have contributed to growth and what current trends imply for their contributions to NH’s near-term growth.

growth and consumer spending affecting many small businesses in the Granite State. So many legislative and regulatory issues hanging in the balance reinforces businesses desire to do as little as possible prior to the election. In NH, private sector job growth has turned negative on an annualized basis (page 2) but after two months in negative territory, PolEcon’s NH Leading Index increased to a value of +7.4, indicating that job growth should stabilize but at less than robust levels. Despite turning positive, the Index still signals only tepid job growth in NH into 2013. In this issue of

P o l E c o n’ s L ea d i ng In d ex T u rn s P o s i ti v e B u t S t i ll S i g n al s O n l y S lo w G r o wt h 40

6% T h e N H Le a d in g I n d e x D ip p ed F u r t h e r I n t o N e g a t iv e T er r it o r y

30

Index = +7.4, up from -2.3

4%

20 2%

+

US Employment Growth

+

Capital Goods Shipments (US)

+

Yield Curve (Interest Rates)

-

10

NH Index Value

Consumer Confidence

0%

0 86

87

88

89

90

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11

12

- 10 -2 % - 20

N H L e ad in g In d e x

-4 %

- 30

N H E m p . G ro w t h R a te - 40

-6 %

% Change in Emp. O ver 12 Mos. Prior

New Claims for Unemp. Ins.

Hiring has slowed among businesses of all sizes and in most areas of the country as many businesses try to anticipate policy changes at the state and national level. After the November elections the so called “fiscal cliff” approaches with the Bush era and payroll tax cuts set to expire and budget cuts agreed to last year scheduled to take effect. The U.S. Treasury debt ceiling will also need to be raised early in 2013. Uncertainty surrounding these events has likely caused many firms to postpone hiring. The resulting tepid job growth is constraining income


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