T he Mississippi Leading Index (MLI) was essentially flat

in November, edging lower by 0.05 percent as Figure

1 below indicates. Compared to November 2013, the MLI

was 6.5 percent higher.

As Figure 2 below indicates, the value of the Mississippi

Coincident Index increased by 0.1 percent in November.

Following data revisions, this increase was essentially the

first change in the Index since July. Compared to one year

ago, the value of the index was 1.0 percent higher in No-

vember.

The U.S. Bureau of Economic Analysis’ (BEA) third esti-

mate of real U.S. gross domestic product (GDP) for the

third quarter indicates real GDP grew 5.0 percent from

July to September, an increase from its second estimate of

4.6 percent. The 5.0 percent rise in third quarter real

GDP was the largest since the third quarter of 2003. Giv-

en the contraction in real GDP in the first quarter and

what it expects will be a slower rate of growth in the

fourth quarter, the Federal Reserve believes real GDP

grew 2.3 to 2.4 percent for all of 2014, a slight improve-

ment from 2013.

These and other data—such as the University of Michigan

Index of Consumer Expectations, which reached its high-

est level in almost eight years in December—signal the

U.S. economy is likely strengthening. However, in Missis-

sippi, data indicate weakness remains in the state’s econo-

my, as the state was one of only two states to lose jobs

over the past twelve months (see page 8). While the na-

tional economy appears to be picking up steam as 2015

begins, in Mississippi uncertainty about future growth re-

mains, particularly with regard to employment prospects.

Corey Miller, Economic Analyst • 3825 Ridgewood Road, Jackson, MS 39211 • cmiller@mississippi.edu • www.mississippi.edu/urc

Mississippi Leading Index, November 2014 2

Mississippi Coincident Index, November 2014 4

National Trends 5

Mississippi Employment Trends 8

Fiscal Disparities Across States 10

Inside this issue:

To download the current issue of Mississippi’s Business as

well as view an archive of past issues, visit:

www.mississippi.edu/urc/publications.asp

Sources: University Research Center and The Conference Board Sources: Federal Reserve Bank of Philadelphia and The Conference Board

94.0

96.0

98.0

100.0

102.0

104.0

106.0

108.0

110.0

11/1312/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/14

Figure 1. Leading indices

Mississippi U.S.

104.0

105.0

106.0

107.0

108.0

109.0

110.0

111.0

112.0

11/1312/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/14

Figure 2. Coincident indices

Mississippi U.S.

ECONOMY AT A GLANCE

VOLUME 73, NUMBER 1

JANUARY 2015

A Publ icat ion of the Univers i ty Research Center , Miss i ss ipp i Inst i tut ions of Higher Learn ing

MISSISSIPPI ’S BUSINESS

Notes: The Mississippi Coincident Index is constructed by the Federal Reserve Bank of Philadelphia and re-indexed to 2004. The Index is based on changes in nonfarm employment, the unemployment rate, average manufacturing workweek length, and wage and salary disbursements. The Mississippi Leading Index is constructed by the Mississippi University Research Center. The U.S. Indices are from The Conference Board. All series are indexed to a base year of 2004.

Monitoring the state’s economy

MISSI SS IPPI LEADING INDEX, NOVEMBER 2014

Page 2

MISSISSIPPI ’S BUSINE SS

F igure 3 indicates the Mississippi Leading In-

dex of Economic Indicators (MLI) lost only

0.05 percent of its value in November. Following

revisions, the value settled at 108.9 and is 6.5 per-

cent higher compared to one year ago. The MLI is

also up 6.9 percent over the last six months.

Four of the seven components of the index contributed

positively in November, led by consumer expectations.

Discussion of each component appears below in order of

largest to smallest contribution.

As seen in Figure 4, the University of Michigan Index

of Consumer Expectations (three-month moving aver-

age) rose markedly in November for the second consecu-

tive month. The value of the index increased 4.7 percent,

reaching its highest level since January 2007. Compared to

one year ago this level was 24.8 percent higher. Consum-

ers’ views about the direction of the economy continue

to improve in part due to falling retail gasoline prices;

however, both inflation expectations components (1-year

and 5-year) of the Index climbed for the first time since

July.

U.S. retail sales rose 0.7 percent in November as indi-

cated in Figure 5, the largest monthly increase since

March. Gains were broad-based, as sales not including

automobiles also were up 0.5 percent. The only compo-

nent that did not increase in November was sales at gaso-

line stations, down for the fourth straight month following

the decline in gas prices. Retail sales were 5.1 percent

higher compared to one year ago, the ninth consecutive

month the year-over-year increase in sales has exceeded

4.0 percent.

Rebounding from the previous month, the value of Mis-

sissippi residential building permits (three-month

moving average) rose 1.7 percent in November as Figure

6 indicates. The value of permits for November was also

11.5 percent higher than one year ago. The seasonally-

adjusted number of units for which building permits were

issued (three-month moving average) in Mississippi

climbed 2.8 percent in November and was 6.9 percent

higher than one year ago. Privately-owned housing units

authorized by building permits in the U.S. in November

dropped 5.2 percent over the revised October estimate.

Compared to one year ago this value was 0.2 percent

lower.

After increasing for two consecutive months, seasonally-

adjusted initial unemployment claims in Mississippi

declined in November. As Figure 7 indicates, total initial

claims fell 1.6 percent from October and were 14.3 per-

cent below the value of one year ago. Conversely, season-

ally-adjusted continued unemployment claims rose in No-

vember following three consecutive months of declines.

As seen in Figure 14 on page 6, continued claims in-

creased 2.1 percent but remained 18.4 below the level of

November 2013. The seasonally-adjusted unemployment

rate in Mississippi in November fell by 0.3 percentage

point to 7.3 percent for the first time since October

2008.

The Mississippi Manufacturing Employment Inten-

sity Index was unchanged in November as Figure 8 indi-

cates; however, the October value was revised up. The

Index was 6.7 percent higher compared to November

2013. While employment in manufacturing in Mississippi

declined slightly in November, average weekly earnings in

manufacturing increased, and the average hourly wage for

manufacturing was unchanged, all of which resulted in no

(Continued on page 4)

Source: University Research Center

Editor’s note: Due to the availability

of data, the Mississippi Diesel

Fuel Consumption Index is no

longer reported or included in the

Mississippi Leading Index.

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

96.0

98.0

100.0

102.0

104.0

106.0

108.0

110.0

11/1312/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/14

Lin

e g

rap

h: p

erc

en

t ch

an

ge

ove

r ye

ar

ag

o

Bar

Gra

ph

: In

dex;

2004 =

100

Figure 3. Mississippi Leading Index

COMPONENTS OF MISSI S S IPPI LEADING INDEX, IN FIGURES

Page 3

JANUARY 2015

Source: U.S. Department of Labor; seasonally adjusted Source: Bureau of the Census; seasonally adjusted

Source: Institute for Supply Management

Source: URC using data from Bureau of Labor Statistics

Source: Thomson Reuters/University of Michigan Surveys of Consumers Source: Bureau of the Census

Source: Mississippi Department of Revenue; seasonally adjusted

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

0

10

20

30

40

50

60

70

80

90

11/13 12/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge o

ver

year

ago

Bar

gra

ph

: In

dex;

1966Q

1 =

100

Figure 4. University of Michigan Index of Consumer Expectations (Three-month moving average)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

$410

$415

$420

$425

$430

$435

$440

$445

$450

$455

11/1312/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge

ove

r ye

ar

ag

o

Bar

gra

ph

: B

illi

on

s o

f cu

rren

t d

oll

ars

Figure 5. U.S. retail sales

-5%

0%

5%

10%

15%

20%

$35

$40

$45

$50

$55

$60

$65

$70

11/13 12/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge o

ver

year

ago

Bar

gra

ph

: M

illi

on

s o

f 2004 d

oll

ars

Figure 6. Value of Mississippi residential building permits(Three-month moving average)

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

11/1312/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge

ove

r ye

ar

ag

o

Bar

gra

ph

: N

um

ber

of cla

ims

Figure 7. Mississippi initial unemployment claims

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

75.0

77.0

79.0

81.0

83.0

85.0

87.0

11/13 12/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14

Lin

e g

rap

h: P

ercen

t ch

an

ge o

ver y

ear a

go

Bar g

rap

h: I

nd

ex; 2004 =

100

Figure 8. Mississippi Manufacturing Employment Intensity Index

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

$98

$100

$102

$104

$106

$108

$110

$112

$114

11/13 12/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge

ove

r ye

ar

ag

o

Bar g

rap

h: M

illi

on

s o

f 2004 d

oll

ars

Figure 9. Mississippi income tax withholdings(Three-month moving average)

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

44

46

48

50

52

54

56

58

60

12/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/1412/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge

ove

r ye

ar

ag

o

Bar

gra

ph

: In

dex (

perc

en

t)

(Do

tte

d li

ne

in

dic

ate

s e

xp

an

sio

n t

hre

sho

ld)

Figure 10. ISM Index of U.S. Manufacturing Activity

A s seen in Figure 11, the value of the

Mississippi Coincident Index of

Economic Indicators rose 0.1 percent in

November. Following data revisions, this

increase was essentially the first change in

the index since July. Compared to one year

ago, the value of the index was 1.0 percent

higher in November.

Figure 12 indicates the value of the Missis-

sippi Coincident Index was at 100.1 percent

of its pre-recession peak in November for

the third consecutive month, once again

following data revisions. Alabama and Flori-

da remained the only two states in the

Southeast where the values of their respec-

tive coincident indices were below pre-

recession peaks in November, as both

states continue to lag well behind the rest

of the region. However, Mississippi was

the only other state in the region in No-

vember without a coincident index at least

1.0 percent above its pre-recession peak.

The values of the coincident indices in 48

states increased in November compared to

August as Figure 13 on page 5 indicates.

The values of the indices in eight states

including Mississippi increased between 0.0

and 0.5 percent compared to three months

prior. The indices of the other 40 states

increased more than 0.5 percent in No-

vember compared to August. Alaska and

Wyoming were the only two states where

the values of coincident indices declined in

November compared to three months pri-

or.

net change in the Index. Compared to one year ago aver-

age weekly earnings in manufacturing were up 5.2 per-

cent.

The value of Mississippi income tax withholdings

(three-month moving average) fell 1.5 percent in Novem-

ber, the first decline since August. Figure 9 indicates the

value remained 2.9 percent higher compared to Novem-

ber 2013, however. The value of withholdings in Novem-

ber was also 1.6 percent higher than six months ago.

Figure 10 indicates the Institute for Supply Manage-

ment Index of U.S. Manufacturing Activity lost 5.5

percent of its value in December. The Index decreased

for the third time in the last four months, falling to its

lowest level since June. This decline resulted in the Index

moving 1.8 percent below its value compared to one year

ago. Some of the decline was seasonal, such as the Inven-

tories component, but the New Orders and Production

components fell considerably in December, reflecting the

slowdown in the manufacturing industry nationally.

MISSI SS IPPI LEADING INDEX, NOVEMBER 2014 (CONTINUED)

Page 4

MISSISSIPPI ’S BUSINE SS

Source: Federal Reserve Bank of Philadelphia

Source: Federal Reserve Bank of Philadelphia

MISSI SS IPPI COINCIDENT INDEX, NOVEMBER 2014

96.0%

101.0%

97.0%

103.3% 103.4% 102.5%

100.1%

103.3% 104.2%102.8%

106.7%

114.7%

107.9%

70%

75%

80%

85%

90%

95%

100%

105%

110%

115%

120%

AL AR FL GA KY LA MS NC OK SC TN TX US

Figure 12. Coincident index: November 2014 percentage of pre-recession peak

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

103.0

103.5

104.0

104.5

105.0

105.5

106.0

106.5

107.0

11/1312/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/14

Lin

e G

rap

h:

Pe

rce

nt

ch

an

ge

ove

r ye

ar

ag

o

Bar G

rap

h: In

dex;

2004 =

100

Figure 11. Mississippi Coincident Index

T he U.S. Leading Economic Index (LEI) reported by

The Conference Board rose 0.6 percent in Novem-

ber, the third consecutive monthly increase. The values

for October, August, and July were all revised slightly low-

er, however. The value of the LEI was up 6.1 percent

compared to one year ago. As in the previous month,

eight of the ten components of the LEI increased in No-

vember. The relatively large declines in the initial unem-

ployment claims and building permits components were

more than offset by the increases in the other compo-

nents. The value of the LEI is up 3.6 percent over the last

six months compared to a 2.4 percent increase for the

previous six months.

The Conference Board also reported the value of the U.S.

Coincident Economic Index (CEI) climbed 0.4 percent in

November. The CEI has increased in value for ten consec-

utive months. All four components of the CEI increased in

November and the value of the CEI was up 2.6 percent

compared to one year ago.

The National Federation of Independent Businesses

(NFIB) Small Business Optimism Index rose for the sec-

ond consecutive month in November. The Index climbed

2.1 percent to 98.1, its highest level since February 2007.

The value of the Index was 6.1 percent higher compared

to one year ago. A net 13 percent of respondents—who

were likely influenced by the November elections—

expect the economy to improve in the next six months,

the largest share since November 2010. This component,

along with Expectations for Real Sales Volumes, drove the

November increase in the value of the Index.

In a somewhat unexpected move, the U.S. Federal Re-

serve retained the phrase “considerable time” in its De-

cember statement about interest rates. Many analysts ex-

pected the central bank to remove the phrase in order to

prepare markets and the public for an interest rate hike in

mid-2015. However, the recent fall in oil prices has re-

moved much of the inflationary pressure in the U.S. econ-

omy, and Federal Reserve officials stated they can be

“patient” regarding changes to monetary policy.

NATIONAL TRENDS

Page 5

JANUARY 2015

Source: Federal Reserve Bank of Philadelphia

MISCELLANEOUS ECONOM IC INDICATORS , IN FIGURES

Page 6

Source: U.S. Department of Labor; seasonally adjusted Source: U.S. Bureau of Labor Statistics; seasonally adjusted

Source: U.S. Bureau of Labor Statistics; non-seasonally adjusted Source: Mississippi Department of Revenue; seasonally adjusted

Source: U.S. Bureau of Labor Statistics Source: Institute for Supply Management

Source: National Federation of Independent Businesses Source: Bureau of Economic Analysis; seasonally adjusted at annual rates

MISSISSIPPI ’S BUSINE SS

-28%

-26%

-24%

-22%

-20%

-18%

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

60.0

65.0

70.0

75.0

80.0

85.0

90.0

95.0

100.0

105.0

11/1312/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge

ove

r ye

ar

ag

o

Bar g

rap

h: T

ho

usan

ds o

f cla

ims

Figure 14. Mississippi continued unemployment claims

-20%

-18%

-16%

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

11/13 12/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge o

ver

year

ago

Bar

gra

ph

: S

easo

nall

y-a

dju

sted

rate

Figure 15. Mississippi unemployment rate

-4%

-2%

0%

2%

4%

6%

8%

$690

$700

$710

$720

$730

$740

$750

$760

$770

$780

$790

$800

11/13 12/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge o

ver

year

ago

Bar

gra

ph

: Mil

lio

ns

of

2004 d

oll

ars

Figure 16. Real average manufacturing weekly earnings in Mississippi

-14%

-12%

-10%

-8%

-6%

-4%

-2%

0%

$0

$25

$50

$75

$100

$125

$150

$175

11/1312/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge

ove

r ye

ar

ag

o

Bar

gra

ph

: M

illi

on

s o

f 2004 d

oll

ars

Figure 17. Mississippi gaming revenue

Coastal River Total Annual Growth of Total

1.2%

1.5%1.6%

1.1%

1.5%

2.0%

2.1% 2.1%2.0%

1.7% 1.7% 1.7%

1.3%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

11/13 12/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14

Figure 18. U.S. inflation: price growth over prior year

-10%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

44.0

46.0

48.0

50.0

52.0

54.0

56.0

58.0

60.0

62.0

12/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/1411/1412/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge o

ver

year

ago

Bar

gra

ph

: In

dex (

perc

en

t)

(Do

tte

d lin

e in

dic

ate

s e

xp

an

sio

n t

hre

sho

ld)

Figure 19. ISM Index of U.S. Non-Manufacturing Activity

0%

1%

2%

3%

4%

5%

6%

7%

8%

88

90

92

94

96

98

100

11/13 12/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge o

ver

year

ago

Bar

gra

ph

: In

dex;

1986 =

100

Figure 20. NFIB Small Business Optimism Index

-2%

0%

2%

4%

6%

8%

10%

12%

14.0

14.5

15.0

15.5

16.0

16.5

17.0

17.5

18.0

12/13 1/14 2/14 3/14 4/14 5/14 6/14 7/14 8/14 9/14 10/14 11/14 12/14

Lin

e g

rap

h: P

erc

en

t ch

an

ge o

ver

year

ago

Bar

gra

ph

: M

illi

on

s o

f u

nit

s, a

nn

uali

zed

Figure 21. U.S. total light vehicle sales

TABLE 1. SELECTED ECONOMIC INDICATORS

Page 7

Indicator November

2014

October

2014

2013

Percent change from

U.S. Leading Economic Index 105.5 104.9 99.4 +0.6% +6.1%

2004 = 100. Source: The Conference Board

U.S. Coincident Economic Index 110.7 110.3 107.9 +0.4% +2.6% 2004 = 100. Source: The Conference Board

Mississippi Leading Index 108.9 109.0 102.3 –0.1% +6.5% 2004 = 100. Source: University Research Center

Mississippi Coincident Index 106.8 106.7 105.7 +0.1% +1.0% 2004 =100. Source: Federal Reserve Bank of Philadelphia

Mississippi initial unemployment claims 8,350 8,482 9,747 –1.6% –14.3%

Seasonally adjusted. Source: U.S. Department of Labor

Value of Mississippi residential building permits 58.8 57.8 52.7 +1.7% +11.5% Three-month moving average; seasonally adjusted; millions of 2004 dollars.

Source: Bureau of the Census

Mississippi income tax withholdings 111.5 113.2 108.4 –1.5% +2.9% Three-month moving average; seasonally adjusted; millions of 2004 dollars.

Source: Mississippi Department of Revenue

Mississippi Manufacturing Employment Intensity Index 84.6 84.6 79.2 0.0% +6.7% 2004 =100. Source: URC using data from Bureau of Labor Statistics

University of Michigan Index of Consumer Expectations 82.0 78.3 65.7 +4.7% +24.8% Three-month moving average; index 1966Q1 = 100.

Source: Thomson Reuters/University of Michigan Surveys of Consumers

ISM Index of U.S. Manufacturing Activity 55.5 58.7 56.5 –5.5% –1.8% Advanced one month. Source: Institute for Supply Management

U.S. retail sales 449.3 446.1 427.4 +0.7% +5.1% Current dollars, in billions. Source: Bureau of the Census

U.S. Consumer Price Index 125.0 125.7 123.4 –0.5% +1.3%

2004 = 100. Source: URC using data from Bureau of Labor Statistics

Mississippi unemployment rate 7.3% 7.6% 8.0% –3.9% –8.8% Seasonally-adjusted. Source: Bureau of Labor Statistics

Mississippi continued unemployment claims 72,345 70,865 88,705 +2.1% –18.4% Seasonally adjusted. Source: U.S. Department of Labor

ISM Index of U.S. Non-Manufacturing Activity 56.2 59.3 53.0 –5.2% +6.0% Advanced one month. Source: Institute for Supply Management

U.S. mortgage rates 4.14% 4.17% 4.40% –0.6% –5.9% Seasonally adjusted; 30-year conventional. Source: U.S. Federal Reserve

Mississippi average hourly wage for manufacturing 18.26 18.27 18.03 0.0% +1.3% Seasonally adjusted; 2004 dollars. Source: Bureau of Labor Statistics

Mississippi average weekly earnings for manufacturing 787.18 781.84 748.33 +0.7% +5.2% Seasonally adjusted; 2004 dollars. Source: Bureau of Labor Statistics

NFIB Small Business Optimism Index 98.1 96.1 92.5 +2.1% +6.1% 1986 = 100. Source: National Federation of Independent Businesses

U.S. total light vehicle sales 16.80 17.09 15.44 –1.7% +8.8% Millions of units seasonally adjusted at annual rates. Source: Bureau of Economic Analysis

Gaming revenue 136.7 140.2 145.6 –2.6% –6.1%

Coastal counties 72.8 75.5 73.2 –3.7% –0.6%

River counties 63.9 64.7 72.4 –1.3% –11.8% Seasonally adjusted; millions of 2004 dollars. Source: Mississippi Department of Revenue

JANUARY 2015

Eco

no

mic

In

dic

es

Co

mp

on

en

ts o

f th

e M

issi

ssip

pi L

ead

ing I

nd

ex

Mis

cellan

eo

us

Ind

icato

rs

T otal nonfarm employment in Mississippi decreased for

the second consecutive month in November, falling

0.4 percent according to the U.S. Bureau of Labor Statis-

tics (BLS). Table 2 below indicates the state’s economy

lost 4,500 jobs in November, the third decline in the last

four months. Compared to one year ago, total nonfarm

employment in Mississippi is down 1,300 jobs, a 0.1 per-

cent decline. With one month of employment data remain-

ing, the state’s economy has lost a net 900 jobs in 2014.

Declines in employment in the state were widespread

across sectors in November. The one bright spot was Fi-

nancial Activities, which added 1,400 jobs, an increase of

3.3 percent from October. Employment in the sector is up

by 700 positions, or 1.6 percent compared to one year

ago.

The largest absolute decline in employment in November

occurred in the Leisure & Hospitality industry, which lost

2,200 jobs, a decrease of 1.7 percent. However, employ-

ment in the sector remained 1.0 percent higher compared

to November 2013. The Construction industry experi-

enced the largest percentage decline in employment in

November, falling by 2.2 percent or 1,100 jobs. Employ-

ment in Construction has fallen in eight of eleven months

in 2014 and was 7.9 percent lower compared to one year

ago.

In addition to Construction, employment remained lower

in Retail Trade, Information, Professional & Business Ser-

vices, Other Services, and Government compared to one

year ago. Manufacturing has experienced the largest in-

crease in jobs in both absolute and percentage terms over

the past twelve months.

The change in employment in the state in November

stood in contrast to most of the rest of the nation. Missis-

sippi was one of twelve states to lose jobs in November;

only West Virginia lost more jobs in both absolute and

percentage terms. Furthermore, Alaska and Mississippi

were the only states where employment was down in No-

vember compared to one year ago.

Following another considerable decline in employment in

the state for November, even small job growth for the

year appears unlikely unless BLS revises the data for previ-

ous months. In fact, Mississippi will experience negative job

growth for 2014 unless the next employment report indi-

cates a considerable increase in jobs in December.

MISSI SS IPPI EMPLOYMENT TRENDS

Page 8

MISSISSIPPI ’S BUSINE SS

Table 2. Change in Mississippi employment by industry, November 2014

Relative

share of

totalª

November

2014

October

2014

November

2013

Change from

October 2014 Change from

November 2013

Level Percent Level Percent

Total Nonfarm 100.0% 1,119,200 1,123,700 1,120,500 (4,500) –0.40% (1,300) –0.1%

Mining and Logging 0.8% 9,700 9,500 9,300 200 +2.1% 400 +4.3%

Construction 4.5% 49,100 50,200 53,300 (1,100) –2.2% (4,200) –7.9%

Manufacturing 12.5% 141,700 142,000 137,800 (300) –0.2% 3,900 +2.8%

Trade, Transportation, & Utilities 19.5% 217,000 218,100 220,200 (1,100) –0.5% (3,200) –1.5%

Retail Trade 11.9% 132,300 133,500 135,300 (1,200) –0.9% (3,000) –2.2%

Information 1.1% 12,200 12,300 12,700 (100) –0.8% (500) –3.9%

Financial Activities 3.9% 44,300 42,900 43,600 1,400 +3.3% 700 +1.6%

Services 35.6% 399,500 403,000 397,600 (3,500) –0.9% 1,900 +0.5%

Professional & Business Services 8.8% 98,100 99,800 98,500 (1,700) –1.7% (400) –0.4%

Education & Health Services 12.1% 137,100 136,800 135,200 300 +0.2% 1,900 +1.4%

Leisure & Hospitality 11.2% 126,300 128,500 125,100 (2,200) –1.7% 1,200 +1.0%

Other Services 3.4% 38,000 37,900 38,800 100 +0.3% (800) –2.1%

Government 22.0% 245,700 245,700 246,000 — 0.0% (300) –0.1%

ªRelative shares are for the most recent twelve-month average. Source: Bureau of Labor Statistics

MISSI SS IPPI EMPLOYMENT TRENDS BY SECTOR, IN FIGURES

Page 9

Source: Bureau of Labor Statistics (all figures); seasonally adjusted

JANUARY 2015

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

1.6%

1,095

1,100

1,105

1,110

1,115

1,120

1,125

1,130

11/1

212

/12

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/1

311

/13

12/1

31/

14

2/14

3/14

4/14

5/14

6/14

7/14

8/14

9/14

10/1

411

/14

Perc

en

t ch

an

ge o

ver

year

ago

Th

ou

san

ds

of em

plo

yees

Nonfarm employment

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

7.0

7.5

8.0

8.5

9.0

9.5

10.0

11/1

212

/12

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/1

311

/13

12/1

31/

14

2/14

3/14

4/14

5/14

6/14

7/14

8/14

9/14

10/1

411

/14

Perc

en

t ch

an

ge o

ver

year

ago

Th

ou

san

ds

of em

plo

yees

Natural resources

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

30

35

40

45

50

55

60

11/1

212

/12

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/1

311

/13

12/1

31/

14

2/14

3/14

4/14

5/14

6/14

7/14

8/14

9/14

10/1

411

/14

Perc

en

t ch

an

ge o

ver

year

ago

Th

ou

san

ds

of em

plo

yees

Construction

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

130

132

134

136

138

140

142

144

11/1

212

/12

1/1

32/1

33/1

34/1

35/1

36/1

37/1

38/1

39/1

310

/13

11/1

312

/13

1/1

42/1

43/1

44/1

45/1

46/1

47/1

48/1

49/1

410

/14

11/1

4

Perc

en

t ch

an

ge o

ver

year

ago

Th

ou

san

ds

of em

plo

yees

Manufacturing

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

210

212

214

216

218

220

222

11/1

212/1

21/

13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/1

311/1

312/1

31/

14

2/14

3/14

4/14

5/14

6/14

7/14

8/14

9/14

10/1

411/1

4

Perc

en

t ch

an

ge o

ver

year

ago

Th

ou

san

ds

of em

plo

yees

Trade, transportation, and utilities

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

11.8

12.0

12.2

12.4

12.6

12.8

13.0

11/1

212

/12

1/1

32/1

33/1

34/1

35/1

36/1

37/1

38/1

39/1

310

/13

11/1

312

/13

1/1

42/1

43/1

44/1

45/1

46/1

47/1

48/1

49/1

410

/14

11/1

4

Perc

en

t ch

an

ge o

ver

year

ago

Th

ou

san

ds

of em

plo

yees

Information

-2.5%

-2.0%

-1.5%

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

42.0

42.5

43.0

43.5

44.0

44.5

11/1

212

/12

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/1

311

/13

12/1

31/

14

2/14

3/14

4/14

5/14

6/14

7/14

8/14

9/14

10/1

411

/14

Perc

en

t ch

an

ge o

ver

year

ago

Th

ou

san

ds

of em

plo

yees

Financial activities

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

94

95

96

97

98

99

100

101

102

11/1

212

/12

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/1

311

/13

12/1

31/

14

2/14

3/14

4/14

5/14

6/14

7/14

8/14

9/14

10/1

411

/14

Perc

en

t ch

an

ge o

ver

year

ago

Th

ou

san

ds

of em

plo

yees

Professional and business services

-1.0%

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

130

131

132

133

134

135

136

137

138

11/1

212

/12

1/13

2/13

3/13

4/13

5/13

6/13

7/13

8/13

9/13

10/1

311

/13

12/1

31/

14

2/14

3/14

4/14

5/14

6/14

7/14

8/14

9/14

10/1

411

/14

Perc

en

t ch

an

ge o

ver

year

ago

Th

ou

san

ds

of em

plo

yees

Education and health services

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

118

120

122

124

126

128

130

11/1

212/1

21/1

32/1

33/1

34/1

35/1

36/1

37/1

38/1

39/1

310/1

311/1

312/1

31/1

42/1

43/1

44/1

45/1

46/1

47/1

48/1

49/1

410/1

411/1

4

Perc

en

t ch

an

ge o

ver

year

ago

Th

ou

san

ds

of em

plo

yees

Leisure and hospitality services

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

37.2

37.4

37.6

37.8

38.0

38.2

38.4

38.6

38.8

39.0

39.2

11/1

212/1

21/1

32/1

33/1

34/1

35/1

36/1

37/1

38/1

39/1

310/1

311/1

312/1

31/1

42/1

43/1

44/1

45/1

46/1

47/1

48/1

49/1

410/1

411/1

4

Perc

en

t ch

an

ge o

ver

year

ago

Th

ou

san

ds

of em

plo

yees

Other services

-0.6%

-0.4%

-0.2%

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%

243

244

245

246

247

248

249

11/1

212/1

21/1

32/1

33/1

34/1

35/1

36/1

37/1

38/1

39/1

310/1

311/1

312/1

31/1

42/1

43/1

44/1

45/1

46/1

47/1

48/1

49/1

410/1

411/1

4

Perc

en

t ch

an

ge o

ver

year

ago

Th

ou

san

ds

of em

plo

yees

Government

FISCAL DISPARITIES ACROSS STATES

Page 10

A s the U.S. economy continues to improve five-plus

years into recovery, state governments finally are

experiencing sustained if relatively small growth in reve-

nues. This growth means policymakers can begin to set

more lasting spending priorities in terms of allocating re-

sources. With the current situation in mind, the start of

2015 provides an opportunity to review Mississippi’s rela-

tive fiscal standing.

One method of evaluating a state government’s ability to

generate revenues and provide services is the representa-

tive revenue system and the representative expenditure

system. These approaches use a set of average tax and

expenditure policies to compare how well state govern-

ments can raise revenues and provide services relative to

other states. The procedure also serves as a way to meas-

ure the needs in each state by calculating the total per

capita expenditures for a set of “standard” services pro-

vided by state and local governments across the country,

which allows for a determination of the needs per person

in each state.

The last comprehensive study of this kind was completed

in 2006 by the Urban Institute in conjunction with the

Federal Reserve Bank of Boston for fiscal year 2002.

While initially such a study may appear somewhat dated,

similar studies were conducted during the 1990s and their

findings indicated little change in the general trends over

time. Thus, the 2006 study can yield insights when as-

sessing the current relative fiscal situations of the states.

The Urban Institute study defines a number of terms that

are useful in understanding its findings. The first such term

is tax capacity, which reflects how much tax revenue a

state government could collect by levying the average or

representative tax rate on every potential tax source in

the state. The representative tax rate is a national average

of all state tax rates and is weighted by the size of the tax

base in a particular state. Thus, a state’s revenue capacity

equals its tax capacity plus all revenue from other poten-

tial sources collected at representative levels. If a state’s

actual revenues are greater than its revenue capacity, then

the study describes the state as having a high revenue ef-

fort. Similarly, the study defines expenditure need as how

much a state must spend in order to provide the national

average level of services to its residents. The number of

individuals living in poverty in a state relative to the rest

of the country affects the expenditure need calculation,

which is adjusted for population differences and other

factors. Expenditure effort is the counterpart to revenue

effort and is con-

sidered high when

a state spends

more than its ex-

penditure need.

In other words, a

state is spending

more money than

is required to

meet the repre-

sentative level of

services. As noted

above, these

measures are cal-

culated on a per

capita basis. Final-

ly, a state’s fiscal

capacity as de-

fined in the study

compares its rev-

enue capacity to

its expenditure

need. Thus, if a

state’s revenue

MISSISSIPPI ’S BUSINE SS

Source: Urban Institute and Federal Reserve Bank of Boston

capacity is low, and/or its expenditure need is high, then

the state has a relatively low fiscal capacity.

Figure 22 provides a description of revenue capacities by

state for fiscal 2002. By construction, the revenue capacity

of the U.S. equals 100. The values indicated for each state

are indices relative to the U.S. average. Not surprisingly,

Mississippi has the lowest revenue capacity of any state

with an index value of 72. In fact, most of the states with

the lowest revenue capacities are located in the South-

east. States with the highest values for revenue capacity

tend to be located in the Northeast. However, sparsely

populated states do not necessarily denote low revenue

capacities; both Alaska and Wyoming have some of the

highest index values for revenue capacity because of their

ability to generate revenues from their natural resources.

Figure 23 depicts expenditure needs by index values for

each state. As with the index for revenue capacity, the

U.S. value equals 100 by construction. Mississippi ranks

first in terms of expenditure need with an index value of

113. The six states with the highest expenditure need in-

dices are found in the southern half of the nation. Most

states with relatively low expenditure need values are

found in the Midwest and Northeast. As noted above,

expenditure need

reflects the

amount necessary

for a state to

spend in order to

provide the typical

level of services of

a state govern-

ment.

While the findings

for Mississippi re-

vealed in Figures

22 and 23 are

somewhat ex-

pected, Figure 24

depicts a more

unanticipated re-

sult. As the map

indicates, the reve-

nue effort index

for Mississippi is

one of the highest

among all states,

ranking sixth.

Again, a high reve-

nue effort index means a state’s actual revenues exceed

its capacity to generate revenues. In other words, Missis-

sippi generates more revenues than it would under the

representative system used in the study. Other states

with relatively low revenue capacities, such as Louisiana

and West Virginia, also have relatively high indices for rev-

enue effort.

Finally, Figure 25 depicts fiscal capacity by state. As ex-

pected given the previous findings, the index value for

fiscal capacity for Mississippi is the lowest of all states. Its

value is 64 and the next lowest index value is 70 for Ar-

kansas. A low fiscal capacity can result from low revenue

capacity, high expenditure need, or both. As Figures 23

and 24 indicate, both measures are responsible for the

relatively low value for fiscal capacity for Mississippi.

In conclusion, according to the authors of the Urban Insti-

tute study on fiscal disparities, its findings provide at least

three insights on the relative economic positions of U.S.

states. Fiscal capacity, revenue capacity, and expenditure

need indicate how well a state funds its needs from its

own resources. The revenue effort measure provides a

way to view different categories of revenue sources and

what alternatives could be imposed to the current struc-

FISCAL DISPARITIES ACROSS STATES , CONTINUED

Page 11

JANUARY 2015

Source: Urban Institute and Federal Reserve Bank of Boston

FISCAL DISPARITIES ACROSS STATES , CONTINUED

Page 12

ture. Lastly, the

expenditure effort

measure indicates

whether a state is

spending more or

less than expected

given its de-

mographics. One

caveat to keep in

mind is the aver-

age levels of tax

and expenditure

policies calculated

by the study are

not necessarily

optimal for any

particular state.

Each state can be

assumed to have

some minimum

level of services

that its policymak-

ers believe it

should provide,

but such a level of

services is likely

not equal to the

representative

levels assumed by

the study. Never-

theless, as the au-

thors of the study

note, the relative

comparisons of

states would be

similar for whatev-

er representative

tax and expendi-

ture rates are se-

lected.

MISSISSIPPI ’S BUSINE SS

Source: Urban Institute and Federal Reserve Bank of Boston

Source: Urban Institute and Federal Reserve Bank of Boston