4 of the 5 key indicators of the CSRA’s economy are not where they should be.
Hence, the Augusta Leading Economic Index (LEI) fell 0.6 percent in July from June.
It remains 0.3 percent higher than July 2024.
Of the five components in the LEI, only the Dow Jones Industrial Average improved. The two indicators of future labor market vitality declined. Initial claims for unemployment insurance increased by 20 percent, and job openings fell by 4.3 percent. We have already seen a weakening of the local labor market in recent employment data, and declines in these leading indicators suggest continued weakness.
New residential construction permits fell by just 4 permits in July, but inflation in the south census region increased to 2.6%, the highest this January.
The U.S. Leading Economic Index, calculated by the Conference Board, and on which the Augusta LEI is modeled, fell slightly in July by 0.1 percent. In other leading indicators news, cardboard box production is set to decline by 9 percent on top of a 5 percent decline already seen this year. Several plant closures have been announced, including one in Savannah. Almost 4 in 5 non-durable goods are shipped in cardboard containers, and plant closures could indicate expectations of fewer future orders.
Lumber prices have also fallen about 24 percent since August. Lumber prices have previously been a reliable leading indicator of the direction of the housing market. The U.S. Federal Housing Finance Agency All-Transactions House Price Index for Augusta MSA fell by 5 percent in the second quarter from the first quarter. Average list price has fallen from $335,000 in May to 324,000 in August, according to Realtor.com.
As I wrote last week, the Fed did cut interest rates by 0.25 percentage points and indicated more cuts in their next two meetings as there continue to be signs of weakness in the national and local economy.
