124 posts categorized "Montana"

The part-time blues: White collar versus blue collar jobs

Part-time work has seen a considerable swing since the recession (see earlier Roundup post). Different types of workers also saw varying fluctuations in part-time work. Take blue collar versus white collar workers, for example.

The Current Population Survey, conducted by the U.S. Census Bureau, categorizes 11 major occupations by the color of their collar: Two are white collar and nine are blue collar (see table, at bottom). As a result, blue collar jobs currently make up a little more than 70 percent of all part-time jobs (see Chart 1).

Part-time B&W collar CH1

Roughly one-quarter of all blue collar jobs are part time, a ratio that changed modestly during the recession, but has been declining (see Chart 2). Levels of “part-time jobs for economic reasons”—a category described by the CPS as “involuntary”—are also much higher as a share of the labor force compared with white collar positions (see Chart 3).

 The share of blue collar workers at part-time jobs involuntarily rose steeply during the recession and remained quite elevated until last year, when levels began to fall quite rapidly and are now near prerecession levels. A similar pattern exists for the share of white collar workers who are part time involuntarily, although this share is still somewhat elevated.

Look for future fedgazette Roundup blog posts on more part-time job trends in Ninth District states, as well as an in-depth look at Ninth District job growth since the recession in the July issue of the fedgazette.

Part-time B&W collar CH2-3
   Part-time B&W collar TABLE

 

Ninth District Beige Book: Signs of moderate economic growth in spring

Since early April, some key sectors in the Ninth District economy have varied, but overall growth has been moderate. Home sales and prices increased at a strong rate, although residential construction remained flat. Energy and mining activity continued to decline, contributing to a slowdown in spending and employment in the energy-producing region of western North Dakota and eastern Montana. While prices were relatively stable and wage increases remained mild, some signs of increased wage pressures appeared.

Residential real estate and consumer spending grew

Residential real estate activity showed strong increases in many parts of the Ninth District during April compared with a year earlier. For example, in western Wisconsin, home sales increased 25 percent and the median sales price rose 12 percent, while in Minnesota, home sales were up 20 percent with the median sales price up 12 percent. Home sales were buoyed in part by a relatively mild spring in many parts of the district. Meanwhile, residential construction was flat overall.

Retail and tourism spending also contributed to positive economic growth. According to a recent survey of district business leaders conducted by the Minneapolis Fed, 40 percent of respondents noted that retail spending increased over the past three months, while 12 percent reported that sales had decreased. An auto dealers association expects Minnesota vehicle sales in 2015 to exceed last year’s levels. Tourism activity was solid in many parts of the district in part due to seasonably warm weather. A travel agency in Minnesota noted that leisure travel bookings for March and April were up over 10 percent.

Meanwhile, manufacturing activity was level overall in April and May. The impact of the recent increase in the exchange value of the dollar likely had an effect on district manufacturers, as 29 percent of manufacturer respondents to the district business-leader survey reported that the dollar’s rise had decreased sales, though most reported that sales had not changed. “Increased value of the dollar has hurt our bottom line because of lower revenue from outside the U.S. on same volume,” commented a respondent. An index of manufacturing activity by Creighton University increased in April from the previous month in Minnesota and South Dakota; the index fell in North Dakota, but was at levels consistent with slight growth in all three states.

Natural resources sectors were slow

Natural resources sectors, including agriculture, energy and mining, had a depressing effect on the district economy. While progress in crop planting was well ahead of its five-year average and drought conditions were relieved by recent rains in several areas, the Minneapolis Fed’s first-quarter (April) survey of agricultural credit conditions showed that 79 percent of respondents said farm incomes fell in the previous three months, with a similar outlook for the second quarter. The avian flu has impacted a number of poultry producers and is expected to cost Minnesota turkey producers more than $300 million.

In the energy-producing area of the district, the drilling rig count dropped to 79 in mid-May, all in North Dakota (no rigs were active in Montana), down from almost 200 in September 2014. The continued decline in drilling activity led to layoffs of oilfield workers and reduced demand for support services. Nevertheless, oil production levels and transportation remained relatively high, albeit down from record levels set in December. The slowdown in oil drilling made its way to Wisconsin and Minnesota, where output at mines producing sand for hydraulic fracturing was expected to decline this year and one facility was idled. However, the overall economic impact of the reduction in oil and gas drilling has remained relatively contained to the energy-producing area.

Some tightening in labor markets and signs of wage pressures

As the district continued to show signs of moderate economic growth, hiring increased on balance and labor markets tightened further. According to a recent ad hoc survey by the Minneapolis Fed, 40 percent of respondents said their ability to retain employees has become harder over the past 12 months, while just 3 percent said it has become easier. “We are seeing a lot of employee turnover, as most see this as the best way to impact salary and opportunity,” noted a respondent to the professional business services survey. A Minnesota manufacturers survey found that hiring plans for the upcoming year are similar to a year ago. However, labor markets softened in the energy-producing area of the district; online job openings were down 23 percent in April compared with a year earlier in the North Dakota oil patch (see Chart 1).

Prices were relatively stable, except for a recent increase in gasoline prices. Wage increases remained mild in April and May, with some instances of increased wage pressures. For example, about a quarter of respondents to the aforementioned ad hoc survey were raising starting pay for most job categories to attract new hires (see Chart 2). Three health care systems in Minnesota have agreed to a minimum wage of $15 per hour under recent contract agreements.

Beige Book June 2015 -- 6-12-15

Part-time work falling since recession

There has been a fair amount of angst over the uptick in part-time jobs during and immediately after the recession, both nationally and in the Ninth District (see Chart 1 for district trend). This was particularly the case because all of the increase came from people holding part-time jobs for economic reasons, which is data-speak for “because they couldn’t find full-time work.”

Part-time Ch1 5-29-15Although these are a small minority of all part-time jobs (most people working part-time prefer to do so), the share of part-time jobs for economic reasons doubled from 2007 to 2010, to almost 6 percent of the total labor force, and 20 percent of part-time labor.

But over the past five years or so, the total number of part-time jobs has been dropping. So too have part-time jobs as a share of total jobs and the share of part-time jobs for economic reasons, though the latter measure remains elevated compared with precrisis levels.

The same trends are broadly applicable by race in Ninth District states, but their paths have been considerably different, according to data from the Current Population Survey, gathered monthly by the U.S. Census Bureau.

CPS data show that until about 2010, black workers had fairly low rates of part-time work, but those rates then spiked well above the rates of whites and other minority groups (see Chart 2). (Because of sample sizes and comparatively small minority populations through much of the Ninth District, all other minority groups had to be combined.) Virtually all of this increase came from those working part-time for economic reasons, which also rose more for other minority groups than for whites (see Chart 3).

The good news is that part-time work, especially for economic reasons, has been in retreat, including a steep decline for black workers since mid-2013, though this measure also remains elevated compared with prerecession levels.

Part-time Ch2-3 -- 5-29-15

Look for future fedgazette Roundup posts on more part-time job trends in Ninth District states, as well as an in-depth look at Ninth District job growth since the recession in the July issue of the fedgazette.

Claire Hou, research assistant, contributed to this article.

More recharging personal batteries at national parks

Even in the digital age—or maybe because of it—the great outdoors continues to be a tourism draw, as evidenced by growing visits to the country’s national parks, according to data from the National Park Service (NPS). And those visits are translating to the Ninth District economy.

Attendance has been trending upward at many parks, especially since the recession. Last year, attendance grew 6 percent among the 13 national parks in the Ninth District with annual attendance of at least 100,000, and is up almost 20 percent since 2008 (see Chart 1). In 2014, attendance at these district parks hit 9 million for the first time.

Among these large national parks in the district, two of them—Mount Rushmore in South Dakota and Glacier National in Montana—are responsible for half of all visitors. (The list does not include Yellowstone, portions of which are in Montana, but which lies mostly in Wyoming.) The biggest jump in attendance last year occurred at the Apostle Island National Park. Located in Lake Superior off the northern tip of Wisconsin, it saw attendance double to almost 300,000 in 2014 thanks to an impressive formation of ice caves on the island, coupled with a uniquely long viewing period.

Those visitors are spending money and creating jobs, according to a separate NPS database. Visitor spending hit nearly $1.2 billion last year, supporting more than 20,000 jobs (see Chart 2) in district states.

National parks

The waiting game: Wait times at VA health centers vary across Ninth District states

Going to the doctor is not always fun. But waiting for the doctor can be worse. Much attention has been paid to wait times for military veterans seeking care at Department of Veterans Affairs (VA) medical centers across the country, and data from the VA show that wait times vary significantly among VA health care systems in Ninth District states.

For example, the percentage of pending appointments that are scheduled more than 30 days after the preferred date runs as low as 1 percent (Fargo, N.D.) to 10 percent (Milwaukee, Wis.), according to VA data released this month for appointments through March 15, 2015. The likelihood of waiting also appears unrelated to volume; for example, the Minneapolis office, which had 73,000 pending appointments at 11 health centers across the state, has a lower average wait rate than Milwaukee, which has 58,000 appointments on the books at six facilities.

Field facilities within a specific VA district also vary considerably. For example, at Montana’s busiest VA facility (Fort Harrison), nearly 16 percent of appointments are scheduled more than 30 days past the preferred date, while the rate is 4.4 percent in Billings. But again, volume isn’t necessarily the culprit. The Iron Mountain district serves the Upper Peninsula of Michigan. Its busiest facility (in Iron Mountain) had a 30-day wait rate of 5.7 percent, while the Marquette facility—with one-quarter of the appointments—had a wait rate of 13.2 percent.

VA wait times -- 4-9-15

A bumper crop of storage

A bumper 2014 harvest combined with low prices has piled up crops at grain elevators and on farms in the district.

Last fall, growers in five district states (excluding Michigan’s Upper Peninsula) harvested about 4.4 billion bushels of corn, soybeans and wheat, according to government statistics. That was 3 percent more than the previous year and the largest harvest of those major district crops in the last five years. A decline in crop prices since 2013 induced many farmers to store their crops over the winter rather than ship them to market via rail or river barge.

The result was a cornucopia of stored crops; the U.S. Department of Agriculture estimated that December stocks of corn, soybeans and wheat increased 7 percent over 2013, pushing up crop storage (see Chart 1). Almost 3.5 billion bushels of crops—equal to about 80 percent of the 2014 harvest—was held at grain elevators, other commercial storage facilities or on the farm. (That amount included unprocessed crops left over from the 2013 harvest.)

Storage on farms -- 4-6-15 CH1-2

About 40 percent of crops were stored in Minnesota (see Chart 2), the top producer among district states of corn, the region’s biggest cash crop. And in every district state, a large share of crops was stored on farms in silos or bins. Over the past 15 years, farmers have invested substantially in on-farm storage to avoid paying for off-farm storage.

“Given the low prices, every square inch of on-farm storage was utilized this year,”’ said Bob Zelenka, executive director of the Minnesota Grain and Feed Association, which represents rural elevators and feed mills.

Regardless of crop prices, farmers are expected to ship large quantities of stored crops to market by the summer. This has raised concerns about renewed congestion on freight railroads, which transport the bulk of agricultural commodities in the district.

Railroad capacity in the district last year was strained by severe weather and rising freight volumes, including increased shipments of crude oil. For much more on railroad capacity in the district, see the upcoming April issue of the fedgazette.

Bakken showing impact of oil price drop

Employment data are picking up on the impact of lower oil prices on labor markets in the Bakken. The price for West Texas Intermediate dropped from $90 per barrel in the beginning of October to $50 in January, hovering around that price since then. During this time, the number of active drilling rigs in North Dakota and Montana decreased by more than 50 percent, dropping below 100 rigs at the end of March and leading to layoffs of oilfield workers.

These job losses seemed to impact overall employment, as levels decreased from 102,600 in December to 95,000 in January for the 12-county area that makes up the core area of the Bakken (see definition below). Seasonality affects employment data, as levels are higher during the summer months and lower in the winter (see Chart 1). However, during the previous two years, employment increased slightly from December to January.

As employment slowed, the unemployment rate for the region increased from 1.5 percent in December to 2.1 percent in January (see Chart 2). While the Bakken unemployment rate also increased from December to January during the previous two years, the rate increased faster during the most recent period. For the whole state of North Dakota, the unemployment rate increased to 2.9 percent in February, losing its status as the lowest unemployment rate in the nation to Nebraska, which posted a 2.7 percent rate.

Bakken update Ch1-2 -- 4-6-15

The number of online job postings in the Bakken area also decreased from December to January, but increased slightly from January to February (see Chart 3). The number of job openings still remains at a relatively high level in the region, despite layoffs in the oilfields. Companies from a variety of sectors continue to actively look for workers. But with the loosening in labor markets, employers in and around the Bakken have reported an increased number of applicants to choose from.

  Bakken update Ch3 -- 4-6-15

12-county Bakken area: North Dakota counties: Billings, Burke, Divide, Dunn, Golden Valley, McKenzie, Mountrail, Stark and Williams. Montana counties: Richland, Roosevelt and Sheridan

Ninth District economy grew in January and February

Oil has dominated the headlines, but the Ninth District economy continued to expand in January and February, with many indicators exhibiting strength and labor markets appearing to have tightened. Several sectors, particularly energy and other commodities, are dealing with low prices. But counteractive, positive conditions for consumers and others helped limit the negative effects. Mild winter weather has had similarly mixed effects.

A wide swath of sectors saw growth. For example, a manufacturing index increased, indicating expansion in the Dakotas and Minnesota. A manufacturer of capital equipment reported that demand in January was stronger than expected. In the services sector, a merger and acquisition services firm noted increased consulting activity and a web design and programming firm noted increased interest from newer firms. In addition, railroads plan to invest more in capital equipment in 2015, and several retailers noted sales increases.

Labor markets continued to tighten, as unemployment rates dropped in many areas of the district. Business owners in South Dakota and western Montana noted difficulty finding workers to fill open positions. A Minnesota staffing firm reported that finding workers was difficult and that competition for those workers increased recently.

As labor markets have tightened, wage pressures appear to have increased in some areas. While data suggest that overall wage increases have been moderate, there were more frequent reports of wage increases above 3 percent during the past couple of months. A recent ad hoc survey by the Minneapolis Fed also found that more employers planned to increase starting pay. Nevertheless, overall wage increases generally remained moderate. Lower energy and other commodities prices affected different regions of the Ninth District.

Lower oil prices affected producers as they cut back on new development in North Dakota and Montana by nearly 30 percent from the beginning of the year, leading to reduced hours and layoffs of oilfield workers (see chart). The number of job postings in the region has also decreased, but several companies in various sectors are still looking for employees. Wage pressures and apartment rental prices have eased somewhat in the energy-producing region.

Beige book blog 3-10-15

Among other commodities, the evidence is mixed. For example, lower metal prices caused a Montana copper-silver mine to shut down. Even though iron ore prices have been dropping, an iron ore analyst expects production to increase slightly in 2015. Low crop prices have hampered farmers, but benefited animal producers due to lower feed costs.

While some sectors have suffered from lower commodity prices, district consumers have benefited. For example, Minnesota gasoline prices in mid-February were over a dollar per gallon lower than a year ago. This may have helped boost consumer spending, as district retailers noted growth in retail sales. For example, a North Dakota mall noted that sales were up in January compared with a year ago, and a bar and restaurant chain in Minnesota reported strong sales during January compared with last year. Recent light truck and car sales were relatively solid in Montana, according to a representative of an auto dealers association.

The increasing value of the dollar has made U.S. products more expensive for foreigners. For example, the stronger U.S. dollar and Canadian exchange rate dampened demand from Canadian tourists and shoppers as border crossings and related sales decreased in district states.

The winter has been relatively warm and dry, which aided commercial construction firms that were able to build more and required less heating. Ranchers benefited from less winter stress on their animals. However, not all benefited from mild weather. Several auto body shops complained they had less demand due to better driving conditions that reduced accidents. Some apparel stores had difficulty selling winter clothing due to relatively mild weather conditions during December and January. In addition, a lack of snow slowed winter tourism activity in several areas.

Ninth District foreclosures declining, staying ahead of nation

While home sales in 2014 were not particularly strong, the housing market is showing continued strength in terms of foreclosures, which have ratcheted down from very high rates as recently as 2012, according to data from CoreLogic, a real estate and financial services analytics firm.

Over the 24-month period ending this past January, district states saw the number of completed foreclosures drop by between 34 percent (North Dakota) and 57 percent (Minnesota). This comes on top of the fact that the proportion of troubled mortgages in district states is lower than the national average.

The national rate of seriously delinquent loans currently stands at 4 percent—its lowest level since 2008, according to CoreLogic. But delinquency rates have also been falling in district states and are a fraction of the national rate, with North Dakota’s rate at just 1 percent.

Foreclosures -- 3-10-15



 

College enrollments falling in Ninth District, nationwide

Something is happening on college campuses across the country—or rather, not happening.

Despite all the messages encouraging college attendance—not to mention job and other data that demonstrate its utility—higher education enrollments have been dropping steadily in recent years, according to data from the National Student Clearinghouse Research Center.

Every state in the Ninth District has witnessed an enrollment drop at degree-granting higher education institutions for at least two consecutive years. The drop from fall 2012 to fall 2014 was highest in Montana, at almost 6 percent, while North Dakota and Minnesota were also above the national average (see chart). In fact, save for South Dakota, enrollments have declined in every other district state for at least three years running.

Some of the reason behind the drop is a cyclical economy. Joblessness, for example, tends to push people into school to obtain better skills for the job market, and enrollments swelled during the Great Recession. A stronger job market is likely pulling many students away from their books.

Demographics are also playing a key role. When national higher education enrollment peaked in 2011, people in their so-called prime college years (18 to 21 years old) were also at their peak and have since declined, leading to lower enrollments.

College enrollments -- 2-26-15