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Current Economic Conditions in the

Eighth Federal Reserve District
St. Louis Zone
March 23, 2012

Prepared by the

Research Division of the
Federal Reserve Bank of St. Louis

Eighth
Federal Reserve
District
I
ILLINOIS
ILL NO
ILLINO S
ILLINOIS

IN IANA
IN IAN
INDIANA
ND
NDIAN

Columbia
Jefferson City

St. Louis

MISSOURI
ISS UR
SSOUR
S
SO

Louisville-Jefferson County

Evansville
Owensboro

Elizabethtown

KENTUCKY
KENTUCKY
KEN UCKY
EN UC
N
NTU

Springfield
Bowling Green

Fayetteville-Springdale-Rogers
Jonesboro
Jackson

ARKA AS
ARKAN AS
RKANSAS
AN

TEN SSEE
TEN ESSEE
TENNESSEE
NNE
N

Fort Smith

Memphis

Little Rock-North Little Rock
Hot Springs
Pine Bluff

Texarkana

MISS SIPPI
MISS SSIPPI
SSISS PP

This report (known as the Burgundy Book ) summarizes information on economic conditions in the St. Louis zone of the
Eighth Federal Reserve District (see map above), headquartered in St. Louis. Separate reports have also been prepared for the
Little Rock, Louisville, and Memphis zones and can be downloaded from research.stlouisfed.org/regecon/.
The report includes government-provided data for Missouri and the metro areas of the St. Louis zone. These data are the
most recent available at the time this report was assembled.
NOTE: Metropolitan statistical areas (MSAs) are larger geographic areas than cities, as defined by the Census Bureau.
For more information, please contact the St. Louis office:
Joel James, 314-444-8963, joel.h.james@stls.frb.org
Economist:
Alejandro Badel, 314-444-8712, alejandro.badel@stls.frb.org

St. Louis Zone Report—March 23, 2012
The most recent data at the time of publication show that St. Louis is performing below the nation in terms of the unemployment rate, annual employment growth, short-run employment growth, and the issuance of building permits, while
house price growth is somewhat less negative than the nation’s. The following five points illustrate this assessment:

Annual Changes in Employment

Building Permits

By the end of January, St. Louis’s nonfarm payroll employment was 0.1 percent lower than last year, while national
employment was 1.6 percent higher than last year.

The number of building permits issued in the St. Louis
zone in January 2012 was 18.7 percent higher than the
number issued during January 2010. This increase was
somewhat weaker than the 28.6 percent increase of
building permits issued in the nation as a whole during
the same periods.

Short-Term Changes in Employment
Between November 2011 and January 2012, St. Louis’s
local employment decreased by an average rate of 0.1
percent per month, while the nation’s employment
increased by 0.2 percent per month.

Unemployment Rate
In St. Louis, the unemployment rate decreased from its
level in October 2011. However, the 8.6 percent unemployment rate registered in St. Louis at the close of
December 2011 is still slightly above the 8.5 percent
rate registered for the nation as a whole.

House Prices
At the close of the third quarter, housing prices were 2.1
percent lower in the St. Louis zone compared with the
same time last year. In spite of this decline, St. Louis outperformed the nation: National house prices have fallen
3.0 percent over the past year.

Anecdotal Information from the Beige Book
Agriculture and Natural Resources

Car Dealers

• Year-to-date coal production (by early March) in
Illinois was 1 percent lower relative to the same
period in 2011; production in Missouri was 1 percent
higher.

• January and early February sales increased compared
with the same time last year for 1 in 7 contacts; sales
decreased for roughly 2 in 3 contacts.

• The overall value of field crops in Illinois and Missouri
rose by 11 percent and 5 percent, respectively,
between 2010 and 2011.
• Prices for agricultural products generally increased
from 2010 to 2011: Corn prices posted some of the
strongest gains in Illinois (20 percent), while winter
wheat prices did the same in Missouri (34 percent).
• Changes in crop values from 2010 to 2011 were
mixed: Soybeans decreased by 8 to 10 percent in both
states, but winter wheat and corn values increased in
that period.

• Sales were expected to increase in March and April
when compared with the same time last year for
roughly 1 in 2 contacts; 1 in 7 contacts expected sales
to decrease.

Construction
• Contacts in the St. Louis metropolitan area reported a
lack of commercial and industrial construction activity,
although one contact noted a fair amount of industrial
construction activity in the manufacturing sector as of
the end of 2011.
• Contacts in St. Louis noted that industrial construction
activity has been mainly build-to-suit but that speculative commercial development is expected to increase.

General Retailers

Real Estate

• January and early February sales increased compared
with the same time last year for roughly 1 in 2 contacts;
sales decreased for 1 in 3 contacts.

• Contacts in St. Louis noted an increase in office and
industrial vacancy rates in the fourth quarter of 2011
compared with the third quarter.

• Sales met or exceeded expectations for all contacts.

Services

• Sales were expected to increase in March and April
when compared with the same time last year for
roughly 3 in 5 contacts; the remaining contacts
expected sales to be flat.

• Information technology and health care contacts plan
to hire new workers and/or open new facilities.
Education and government services contacts plan to
decrease operations and employment.

Manufacturing
• A contact in can manufacturing plans to expand operations and hire new workers. Dye and paper product
contacts plan to close plants and lay off workers.

Detailed Indicators: Employment, Unemployment,
Personal Income, and General Economic Activity

Nonfarm Payroll Employment Growth—St. Louis MSA
Percent
0.3
0.2
0.1
0
–0.1
–0.2
–0.3
–0.4
–0.5
United States
St. Louis MSA

–0.6
–0.7
2006

2007

2008

2009

2010

2011

2012

NOTE: 3-Month moving average, seasonally adjusted, January 2006–January 2012.
SOURCE: Bureau of Labor Statistics.

St. Louis’s recession-related decline in employment, which was centered near the first quarter of 2009, was similar to
the nation’s decline. The recovery in St. Louis was also similar to the nation’s until the first quarter of 2011. Since then,
employment growth in St. Louis has been systematically below the nation’s. Between November 2011 and January 2012,
employment in St. Louis declined at an average rate of 0.1 percent per month while national employment grew at a 0.2
percent rate.

Employment Growth by Sector—St. Louis MSA
Percent
6.0
4.0
2.0
0.0
–2.0
–4.0
–6.0
–8.0
Total Nonfarm
Trade,
100%
Transportation,
and Utilities
19%

Education Professional and
and Health Business Services
18%
15%

Government Manufacturing
13%
9%

Financial
Activities
6%

Natural
Resources,
Mining, and
Construction
4%

Other Services
4%

Information
2%

Leisure and
Hospitality
1%

NOTE: Percent change with respect to one year ago, January 2011–January 2012.
SOURCE: Bureau of Labor Statistics.

Employment growth by sector during the past 12 months distinguishes general trends from sector-specific trends in St. Louis’s
economic performance. Employment decreased by 0.1 percent in this MSA with respect to one year ago, while employment
increased by 1.6 percent in the nation. The three largest sectors in St. Louis are Trade, Transportation, and Utilities; Education
and Health; and Professional and Business Services. These sectors account for 19 percent, 18 percent, and 15 percent of St. Louis’s
employment, respectively, and expanded by –0.9 percent, –0.2 percent, and 1.1 percent, respectively, during the past year.
Employment growth varied across sectors, with 6 of 10 sectors decreasing employment and the rest having positive or zero
employment growth. The Other Services sector, accounting for 4 percent of total employment in St. Louis, had the best performance (5.3 percent expansion), while the Information sector, which accounts for 2 percent of total employment, had the
worst performance (6.6 percent contraction).

Coincident Economic Activity Index—St. Louis Zone
Index (Jan. 2008 = 100)
102
100
98
96
94
92
Illinois

90

Missouri

88

United States

86
2008

2009

2010

2011

SOURCE: Federal Reserve Bank of Philadelphia.

The Philadelphia Fed’s coincident index combines information on payroll employment, wages, unemployment, and hours of
work to give a single measure of economic performance. The coincident indexes for both Illinois and Missouri reveal a stronger
impact of the recession and a slower recovery in these states compared with the nation. In fact, the index values during the
recession show that, at the lowest point, the level of economic activity in Illinois and Missouri was at 89.5 percent and 87.6
percent of pre-recession levels, respectively. Meanwhile, the nation’s lowest point of economic activity was at 92.1 percent of
its pre-recession level. Current values of the index suggest that, compared with pre-recession levels, economic activity is at
93.9 percent in Illinois, while it is at 89.7 percent in Missouri and 97.0 percent in the nation. Despite the large difference in the
recovery of economic activity between Missouri and the nation, the graph indicates that, during the last half of 2011, economic
activity in Missouri has resumed its expansion path.

Employment and Unemployment by MSA
Nonfarm payroll employment percent change,
January 2011–January 2012
Total
St. Louis, Mo.–Ill.
Columbia, Mo.
Jefferson City, Mo.
Springfield, Mo.
United States

Goods producing

Service providing

Unemployment rate
December 2011

–0.15
6.54
1.33
0.84
1.55

0.24
7.81
3.45
1.55
2.53

–0.21
6.44
1.06
0.76
1.40

8.6
5.5
6.3
7.2
8.5

SOURCE: Bureau of Labor Statistics.

Total employment expansion in the St. Louis zone has been positive for all MSAs except for St. Louis, where employment
fell by 0.15 percent with respect to last year. Columbia experienced a substantial increase in employment driven by goodsproviding sectors, while Springfield experienced the smallest increase in employment. Columbia experienced the highest
employment growth in goods-producing activities (7.8 percent) and also the highest employment growth in serviceproviding activities (6.4 percent). The highest unemployment rate in the St. Louis zone was registered in St. Louis, at 8.6
percent. All MSAs in the zone, except for St. Louis, registered lower unemployment rates than the 8.5 percent registered
for the nation at the close of December. The lowest unemployment rate across the zone’s MSAs was 5.5 percent, as registered in Columbia.

Real Personal Income Growth—St. Louis Zone
Percent
6
4
2
0
–2
–4

Illinois
Missouri

–6

United States
–8
2006

2007

2008

2009

2010

2011

NOTE: Percent change with respect to previous year.
SOURCE: Bureau of Economic Analysis.

For several quarters before the national recession, which started in the last quarter of 2007, Illinois’s personal income
growth was roughly similar to the nation’s, while Missouri’s was slightly lower. The recession’s impact on personal income
in Missouri and Illinois was similar to that for the nation. The recovery (since 2010) has been similar in both states and
similar to the nation’s until the third quarter of 2010. Between the third quarter of 2010 and the third quarter of 2011,
personal income growth fell in the two states as well as in the nation. In fact, personal income grew by 0.2 percent and
1.5 percent in Missouri and Illinois, respectively, and grew 1.2 percent for the nation as a whole.

Residential Real Estate Activity by MSA
Total building permits, units year-to-date
January 2012
St. Louis, Mo.–Ill.
Columbia, Mo.
Jefferson City, Mo.
Springfield, Mo.
United States

260
45
8
56
46,278

Percent change
18.7
125.0
–33.3
9.8
28.6

House price index, percent change,
2011:Q4/2010:Q4
–2.1
0.0
–0.4
–2.6
–3.0

SOURCE: Bureau of the Census, Federal Housing Financing Authority.

The latest available data at the time of this report’s publications reveal that housing activity in the St. Louis zone was
weaker in terms of home prices but stronger in terms of building permits compared with the same time last year. The
number of building permits issued in January was 18.7 percent, 125 percent, and 9.8 percent higher than last year in
St. Louis, Columbia, and Springfield, respectively. Meanwhile the number of building permits issued in January in
Jefferson City was 33.3 percent lower than in January 2011. In contrast, home prices declined with respect to one year
ago in all of the St. Louis zone’s MSAs except for Columbia, where housing prices remained unchanged. Specifically,
housing prices decreased 2.1 percent, 0.4 percent, and 2.6 percent in St. Louis, Jefferson City, and Springfield, respectively.
These declines were, however, less pronounced than they were at the national level, where home prices experienced a
3.0 percent decline over the past year.


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102