Economic signs continue to look up
The economic outlook is still not perfect, but signs continue to point up both locally and nationally, according to the University of North Florida's Local Economic Indicators Project.
According to its quarterly economic newsletter, LEIPLINE, the coming change in leadership at the Federal Reserve Board and the ongoing saga of Obamacare are among the issues creating uncertainty for businesses.
However, "despite all of these less than optimal structural concerns, the economy domestically is improving and Jacksonville continues to outperform the national averages in most categories," LEIPLINE said.
"I'm more optimistic both locally and nationally," said UNF economist Paul Mason, who coordinates LEIP.
LEIP compiles and analyzes data on the economy in Northeast Florida.
The latest data show a very positive trend in its index of leading economic indicators.
"The LEI is up four months in a row, which is almost unheard of," Mason said.
LEIP also collects price data for a monthly consumer price index for the Jacksonville area, and it shows inflation declined slightly in the third quarter after larger-than-normal increases through the first half of this year.
Through the first 10 months of the year, the Jacksonville CPI shows an annualized inflation rate of 2.79 percent.
"This amount is much higher than normal for Jacksonville, but if the slow price growth from July through October continues in November and December, the actual annual inflation may be much closer to the 1-1.5 percent that has been commonplace since LEIP began in 2002," LEIPLINE said.
A moderation in fuel prices, along with stability in food and housing costs has slowed inflation, it said.
"The April and May mini boom in local housing prices and sales was stifled by the rising mortgage rates in June and July, with housing prices rising only slowly since," it said.
LEIPLINE also said "typically volatile" consumer goods such as apparel and cars have seen less volatile price changes.
Jacksonville's unemployment rate has been dropping, but LEIPLINE added a note of caution in analyzing that data.
"While Jacksonville is clearly doing better relative to the nation as a whole, and the state of Florida in total, it is important to recognize that like both of the other categories, Jacksonville is also seeing its labor force decline as workers are leaving the labor pool, which tends to apply downward pressure on unemployment and its rate of change," it said.
Mason said he is also watching to see if businesses cut back on hiring because of possible costs related to Obamacare, but he hasn't seen that happen so far.
Stock prices of Jacksonville area companies leveled off in the third quarter, along with national markets, LEIPLINE said.
"However, October was a very good month for the local presence stocks. The boom in the stock markets during November will be interesting to compare with the local outcomes in the next LEIPLINE," it said.
Overall, LEIPLINE said the third quarter was encouraging for both the local and national economy.
"With real GDP stronger than it has been since early 2008, unemployment falling both nationally and even more so locally, and the leading indicators consistently positive both locally and nationally, the recovery seems to be gaining momentum," LEIPLINE said.
"There are still concerns out there relative to the weakening Chinese economy, the persistent uncertainty associated with Obamacare, and the inability for financial institutions to provide loan packages for large and small businesses alike," it said.
"Jacksonville continues to outperform the nation as a whole, which is the way we like it. Local Jacksonville MSA businesses need to return to a growth mode perspective to improve local employment and consumer confidence," LEIPLINE said. "So much of macroeconomics reflects self-fulfilling prophesies that need a kick in the back side to move in the right direction. A strong Christmas season will do a lot to improve the psyches of consumers and businesses to continue the forward momentum."