By TED CARTER
The indicators state economists use to assess the health of Mississippi’s economy showed the same lethargy in August as they did at the start of the year.
“August represented another example of the relative sluggishness that has characterized the Mississippi economy in 2017,” said the October edition of Mississippi’s Business prepared by the University Research Center of the Institutes of Higher Learning in Jackson.
The Research Center will soon release a wider economic examination in its third quarter Mississippi Outlook, but the Outlook’s author has not encountered any data indicating a change in a second quarter forecast of a full percentage point drop in the state’s Gross Domestic Product, or GDP. “I don’t think we’ve seen too much change for Mississippi,” said Corey Miller, an economic analyst for the Research Center, in an interview.
“Growth of less than 1 percent is what we’re still expecting for 2017,” said Miller, whose second quarter Outlook projected Mississippi’s economy will grow 0.9 percent in 2017.
Miller cited essentially unchanged employment this year as well as the disappearance of the relatively strong income growth that began in early 2016.
The second quarter Outlook forecast payroll employment in Mississippi to grow only 0.2 percent in 2017, a decrease of 0.3 percentage points from the forecast of the previous quarter. “Moreover, if realized this rate of job growth would be the smallest change in payroll employment in the state since 2011,” the report noted.
The Outlook, however, forecast stronger growth for 2018 and 2019. “The Mississippi economy will expand 1.8 percent in 2018 and 1.7 percent in 2019,” the second quarter Outlook predicted.
The October edition of Mississippi’s Business noted that only three of the seven components of the Mississippi Leading Index (MLI) decreased in value in August. The index is made up of the Mississippi Manufacturing Employment Intensity Index, U.S. retail sales, consumer expectations, Mississippi residential building permits, state income tax withholdings and the Index of U.S. Manufacturing.
Though the Mississippi Leading Index declined by 0.2 percent in August, the value of the index was 4.4 percent higher compared with the same month a year ago, the report said.
The report said the Mississippi Manufacturing Employment Intensity Index gave back most of its increase from the previous month and employment remained unchanged after gains the previous two months. The give-back came via a 2.6 percent decline in the Intensity Index. The report blamed a decline in average weekly hours of production.
However, the report noted a couple of positives: The values of both withholdings and building permits increased in August for the first time in months.
Far fewer Mississippians applied for unemployment insurance benefits in August, with claims dropping 19.6 percent from a year ago. The October report put the seasonally-adjusted unemployment rate in Mississippi at 5.3 percent.
On the retail sales front, the economists cited a 0.2 decline nationally and attributed the drop to slowdowns in sales of autos, clothing and accessories.
The University Research Center uses the University of Michigan Index of Consumer Expectations (three -month moving average) to assess retail values in its reporting. In the October report, the value of the index increased in by 0.2 percent for August. But the index was 5.6 percent higher compared with one year ago.
The Research Center uses the national retail numbers on consumer thinking and sentiment because it lacks a state-focused index, according to Miller.
“These have specific numbers that give us some kind of a forward look,” he said.
August brought the first increase since February in the value of Mississippi residential building permits, with a value 10 percent higher than a year ago. Permits issued increased by 2.2 percent.
Another increase came in the value of Mississippi income tax withholdings. They increased in August for the first time since March. The 0.9 percent increase was 1.2 percent higher than in August 2016.
The income tax withholding numbers are an important indicator, said Miller.
Withholding growth has been slight, “but it is growing,” he said.
On the jobs front, Mississippi employment rose slightly more than a half percentage point by adding 6,900 jobs. Health care accounted for 1,400 of the new jobs.
While Miller expects Mississippi’s economy to remain sluggish for the rest of the year, he says congressional action on taxes could spur at least some upward momentum. “If we got some kind of tax reform at the federal level,” he said, “it should bring some movement psychologically, if nothing else.”