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hi and welcome to today's engaging for missouri webinar i'm alice roach from the division of applied social sciences at the university of missouri and i'll be your host today with each of these 30-minute webinars we intend to share research-based insights that leaders like you can apply in your own work to benefit and strengthen the state's agriculture and food system hospitality sector and communities today alan spell will share an update of key economic measures as the state and businesses reopen before i invite alan to begin i want to share a few housekeeping notes first we'll close the webinar today with a question and answer session those of you who connected to today's webinar via your computer can submit your questions in the chat screen so to open that just click the chat button that you see at the bottom of your zoom window if you join today by phone then you can email me your questions at roacham missouri.edu second all attendees are muted and may not start their video third if you encounter any technical problems today during the webinar then you can either let me know by submitting a comment in the chat screen or you can also send me an email at roacham missouri.edu and i'll do my best to help you troubleshoot fourth we will make a recording of today's webinar available to you you can look for an email from zoom that shares more about where you can access that recording sometime tomorrow additionally you can also access an archive of all of our previous engaging for missouri webinars on our division's youtube channel so now we'll transition to the topic of today's webinar which is titled missouri economy indicators an update of key measures as the state reopens presenting is alan spell who is an assistant extension professor of regional economic development so thank you alan for presenting today if you could please unmute your microphone and start your video then we can begin today's presentation all right thank you alice well thank you for attending today and i will uh i will cover a lot here in the next 20 minutes so a lot of charts that will show and i hope you've had some coffee it'll take a lot to get through but uh i do want to encourage you to download the pdf or get the pdf after this because there's a lot of information that'll go fast and so don't worry if you can't write it all down so we're going to talk about economic indicators as current as we can given the situation that we have right now our economy uncertainty is is the one word that describes it the protection protocols will they work to to reduce cases is a vaccine coming what about the federal spending that congress is looking at now to to do again all of this is causing uncertainties that are that are obviously hurting uh consumer demand and business demand uh we we know that gdp this year will go down uh we don't know about how much but the the estimates are from six to eight percent for the us and the world now and that's important from the world perspective a lot of times when we have recessions it may just be a handful of countries that are having uh issues right now it's a global challenge with almost all countries showing decline and so that's a that's a bigger impact that's gonna mean that no no matter how well uh the united states does we also have the the world um that's that's going down the decline so that's gonna impact this as well what does six percent mean well for missouri six percent in one year represents three years of gdp growth real growth so that's very impactful and that's a large number um so it's very important for our economy to understand this so to help understand that every couple of weeks we're putting out briefs uh this is the tenth that we put out this past monday around business openings we started back in march to try to put out really easy to read two-page briefs around some of the indicators that might be impacting workers in our industry so let's first look at consumer spending it's the largest part of our gdp about two-thirds of it and right now consumer spending is uh down from missouri by about four percent as of mid july now that estimate comes from a private data vendor affinity solutions who tracks credit card transactions so it's it's um you know it's private sector data not from federal sources we'll talk a little bit more about some of the caveats with with this data but it is a very current measure used by a lot of sources for the u.s it was down six percent so you can see from basically a january time frame where we were at around normal and again these are seasonally adjusted figures so they're going to be adjusted for that seasonality we saw the big drop in april and then by june by late june we had gone back up closer to those uh january levels uh back and forth a little bit this is jumpy data but we're seeing in july those numbers go down a little bit and that's largely due to the consumer confidence hit that we're seeing with the the increase of covet uh health concerns now by industry it differs uh that four percent decline that we're seeing right now that's that uh that middle bar there that you're seeing well that's not every industry and grocery stores are doing better they're 10 above their um their time in january apparel in general merchandise stores and think about your walmarts and stuff like that that are doing a little bit better health care is down uh five percent restaurants and hotel 30 entertainment rec 47 and then transportation 49. so we're seeing it differ obviously by industries as we dive into some of the figures some more you obviously see those impacts replicated in jobs and other things so how are workers doing well right now unemployment insurance claims are are just at a level that we've never seen before 217 000 average continuing claims in the month of june uh but that's coming down and there's there's you know some uh challenge and understanding continuing claims because there's different uh claimants now than we've had before we've had some gig economy workers that can now claim we also have some challenges with with the data in terms of people being able to back date some of this information so it's a it's a hard number to track down but i did want to isolate it in regards to the last recessions i think that's really important so i use the bureau of labor statistics figures and you can see in 2009 time period where we were at in terms of our peak at around 120 000 average claims in a week now we're at a much much higher level so of course we spiked really fast because we closed the economy down and we're starting to reopen and we'll see some of those numbers here in a minute but the question obviously is how fast will that unemployment go down how fast those claims go down we're seeing now in the last couple of weeks some worries that this might last longer than we initially thought about unemployment for the state in june was was at eight percent just under eight percent compared to the u.s at 11. so that was down from 10 in may um and and we've tracked generally below the u.s rate and a lot of um a lot of our unemployment rate figures for a long time so that's not an unusual trend the unemployment was mostly impacting occup accommodations and food service workers health care and retail services and you can think of health care probably a lot of that is is temporary with offices closing ambulatory care offices closing um but they're they're likely going to get that that employment back these are specialized skills they're going to hire those people back as those offices reopen accommodations food services and retail are a little bit different story we obviously saw a big increase last month in jobs back in those industries and i'll i'll show you that here in a minute but uh you know the question is will this be a prolonged recession where um those people uh who are generally making less money there's a lot of jobs in those sectors but they're making less money will they be impacted by shifts in our economy and unfortunately by a prolonged covenant health concern so in june last time we had data from the bureau of labor statistics and our office american missouri we saw employment jump pretty substantially 71 000 in a month now an average month you know in in a regular business cycle we're talking uh 2 000 jobs or so a month so this is really a tremendous uptick in may uh in may and june we gained back about 123 000 total jobs in march and april we had lost about 346 so that's about 36 percent of those jobs came back up now i've broken it down or i've shown you some information here by some of our largest employing sectors and i think that's important healthcare is our largest employment sector and as you can see at 415 000 jobs in june it was down slightly from the month before so is government another large employment industry so those two pretty much unchanged uh over that month professional business services up a little bit our third largest employing industry and then retail manufacturing and leisure and hospitality those had some substantial um increases retail uh up nearly 20 000 jumped down to leisure hospitality up nearly 36 000. we're still down over the year but you can see a lot of those retail and leisure hospitality jobs coming back up in june now july numbers will be out in a little bit here and a couple of weeks and then we'll get to see what's happening in july these numbers are also subject to revisions so a lot of the census and bls data is really good but it does get revised and so just be aware of that how are business is doing well one way to measure this is a new survey that census puts out now about every week that covers um households and also businesses this is some information from the business pulse survey the last data as of yesterday was for june 27th so the that week of the 21st through the 27th we have um a chart here where we're comparing missouri versus the us and you can see from april all the way to june that that idea of has your company felt a negative effect now that's a lot of that's a there's a lot of ways that you can feel a negative effect but it's a good overall um idea of of how businesses are seeing this um this thing play out so back in april uh nearly nine out of ten uh firms were feeling negative effects and that number's gone down to about eight and ten for missouri uh again this will be our watching as as we move forward also to kind of go along with that we see declining revenue they ask about revenue did it decline from the week prior and as you can see back in april and may to the left there about seven and ten said our revenue declined from the week prior that number has gotten better now at the end of june we're at four out of ten saying that their revenue has declined again something to keep watching as we move forward this is a large scale survey so it's uh it's it's a good overall idea of how businesses are doing recently the department of revenue and a lot of agencies uh have been putting out a lot more information uh than in the past which has been absolutely critical in this time of understanding our economy so really appreciate that and department of revenue now has some monthly data on taxable sales so this is reported by comp you know this is this is money that's that's sent to the state for revenue so it's a really a good capture of what uh sales are doing this is as of april so it's not as you know we're still waiting for information for the coming months but this will be something that's updated uh every month so in april versus april of 2019 so over the year uh total taxable sales were down uh almost 14 now you can see by some of the categories down there um leisure and hospitality 80 uh food services 46 educational services 82 and a lot of that's going to be private sector education services there retail 1.2 so down not down retail as a whole largely from april of 2019 you can kind of see some of those figures there which is important because as we look at some other data here um it can show you some mixed stories and it's kind of hard to always take to know what's exactly going on and this is an example of that so this is taxable sales april again down 14 but by counting so um just looking at the map if you if you scan down to the bottom there you see in orange all the way down to 46 declines the change in revenue all the way up to almost 49 uh increase from the year earlier so you can see places hit hard like branson like uh the lake of the ozarks area st louis kansas city madeirasville kirksville up there in the north so you can see places that were hit a lot of the the towns and tourism places that we visit but you can also see some counties that did not have as big of a loss of taxable sales in some of our rural areas a lot of the north counties are kind of mixed but anyways an interesting understanding of of how this stuff can differ across areas this isn't inflation adjusted but inflation was pretty minor over the years so uh it's it's uh the the counties that are really like purple still could be uh showing the clients and i also want to just kind of say this is taxable sales this is not profits that you know what we got to understand is that there's cost increase for firms as well so this isn't obviously the whole story but it's part of the story eight out of ten businesses are open and that was as of the first week in july there looking at data again from a private data source here so this is not federal agency state agencies this is from a private sector source 83 of those of missouri businesses were open um fewer businesses were open in mid-april um obviously mid-april we were down to sixty percent uh or seventy percent i'm sorry uh but moving up closer to ninety percent uh here more recently and then dropping down a little bit uh and again dropping down a little bit in early july probably also related to the parallel and consumer spending dropping as well 80 was the national average just for comparison uh you can see professional business services close to 100 retail and transportation mostly retail that's going to be down around 84 and then leisure and hospitality at 78. so companies are opening uh trying to get business but of course sales is a different uh story and that calls compared with that now for open businesses and i want to really emphasize this is for open businesses uh revenue was down in january with this measure about seven percent uh for missouri compared to 20 percent or 19 for the u.s a pretty significant difference there we look at um the if we looked at that revenue in uh late june it was it was around uh the same level of january seasonally adjusted but then we've declined a little bit in early july again because of those renewed concerns around coving so we see that for example retail and professional business services are tracking a little bit higher than january actually retail doing um a fair bit better and legion hospitality firms still half of the sales that they had back then health and education down as well i wanted to stop here for just a second and put some caveats to that this is data from one firm who tracks a credit card transactions from from companies that use its business throughout the us a lot of the data sources that we look are look at right now are real-time private sector data sources but the reality is that they don't cover the full spectrum of all businesses so for example closed businesses aren't going to be tracked here and that's going to of course affect total revenue changes the other thing is that this these numbers jump around quite a bit because we're we're trying to gauge things on a you know on a weekly basis and unlike census data bls data where there's been a long long time of analyzing the data analyzing some of the biases of the data and controlling for some of those things some of this data is newer to a lot of us researchers and still you know still uh being understood and so a lot of those caveats with that just saying to um you know to understand that this data will change and we're going to keep track of this to try to help you understand things so a few uh dives into some of the industries how is manufacturing doing manufacturing jobs um are down six percent over the year but uh had some pretty promising gains in june as we showed on the rior slide there so that's good the purchasing managers index which largely covers manufacturing a national survey there's also some regional and statewide surveys that are done if the number is 50 or above that shows that in that manufacturing environment and generally overall economic health tracks with this as well but things are in a positive territory expansionary territory things below 50 are sluggish or contracting economy so down at our little table there we show that june um pmi was neutral around 50. so that's basically a neutral rating but that's up from 42 in may so definitely climbing up nationally tracks around the same but still a neutral number i mean we're not in any growth period really here just more in a neutral point and that kind of goes into that idea of of a lot of concerns with business investment with renewed covered health concerns that could be dampening some of that missouri restaurants just one figure that that tracks uh something is that's interesting is the open table um information around seated uh diners and restaurants as we can see back in um march early march when we were at about you know we're at normal we went to basically nobody from march to late may and then moving back up to now we're at about 66 decline from um from normal levels and as you can see in in july that's kind of tracking down a little bit when it spiked in june and tourism uh tourism is a big thing to unpack there's a lot of industries in that but i do want to applaud the division of tourism for coming out monthly with indicators around the tourism economy this is just one slide of many that they provide information on they use a company tourism economics to help understand this but what i want to point to is really kind of the idea that you know revenue spending of 150 to 170 million a week is just not occurring in the economy according to these calculations here and you can see it obviously dropped almost to 90 down in april and now we're about halfway there so a lot of indicators tracking around lesion hospitality of around that 50 to 60 70 decline we're seeing things improve a lot of course it'll be real subject to to how the economy and the coveted concerns are going to occur moving ahead the challenge right now is that this is the key time for tourism companies to to make money in the summer so this could really be a critical hit for them right looking ahead uncertainty is of course the the word um it's going to continue to impact consumer demand we saw that even with lockdowns or or or closing of the economy by government entities local and state that a lot of times consumer spending hit or dropped before that so really consumers are reacting to the information about the health concerns and they're responding obviously right now to that as we've seen in the last week or so additional federal spending is being talked about and i think that's going to go you know obviously we've realized in the last two to three weeks that this is going to be a longer slog to recover than what we had hoped and uh so they're debating federal spending something will happen you've got an election year coming too so there's no doubt something will happen we just don't know what that'll be exactly yet and then lastly just a couple of points around the long-term economic structural changes that are possible one is e-commerce is definitely going to increase it was already increasing that means distribution centers that means logistics and of course small companies and how do they get into the e-commerce business more remote work not a sea change but a a fair amount of people being able to work remotely and then what does that mean for for downtown businesses and uh especially office rentals and the jobs that go along with that cleaning agencies protection you know security a lot of lower income jobs that are supported in cities by people just living there and working there that could be impacted and then of course the broader idea of moving to lower cost cities and suburbs there's already been analysis that people were moving out of the cities millennials having kids and moving to the suburbs of kind of a longer trend that's that's been repeated before that might be accelerated by that so it might be an opportunity where you have broadband and stuff to attract um people who can work there all right so we're running short of time but i do have a couple of poll questions for you so i hope you can answer uh these questions you only get to pick one so is the the top worry for you loss of jobs and prospects for lower paid hospitality retail workers and let's extend that to really anyone who has a a lower paid job there's plenty of them but they're lower paid small businesses permanently closing um there's obviously going to be some companies that come out of this so is that a top concern or just the longevity of this economic struggle that we're going through so let me know which ones um do you feel are the the most worried to you and we'll give you a minute here and then i'll tell you what we found okay so about half of you indicated that the top issue was this struggling economy um how long is this going to happen and how long is this going to go and i that there's no right or wrong answer obviously um but i think that that really does show the concern especially more recently we've had of thinking that we might have found a way to get to reopen and to to get moving on our economy and realizing that this is going to be a longer slog so okay thank you for that all right let's go to the next uh question the last one here is which of these indicators are most interesting uh to you again no right wrong answer but you only get to pick one so tourism related industries are healthcare manufacturing urban or rural differences industry differences or just generally macro economic indicators like gdp unemployment on bigger trends and stuff so interested to hear what you have to say on that all right macro indicators was the top one by about half followed by urban rule differences so um good good to know that it's it's helpful and i know we've looked at some data obviously today we looked at a lot of macro indicators and we've looked at some urban or rural differences um in the past and so we'll note that and keep trying to find some good data there all right well the last slide before i return to questions just a very quick shout out to to the agencies state agencies are just really putting out a lot more data and research than ever before thank you so much it allows us to do the job we need to do for research and understand our economy to all the data firms that are now providing free information to us to research this and also to just all the universities and non-profits and and other entities that are doing some of this research really is a time of information uh that that is really critical to what we're doing so i really appreciate everyone's help in this effort and for you attending this session today all right alice back to you excellent thank you alan um we do have a couple of viewer questions if you have a question that you'd like to submit please feel free to do that either in the chat screen or you can email me at roacham missouri.edu so the first question alan if you could go back in your slide deck to that map where you illustrate um how unemployment varies by industry uh this question is or rather by counting um this question is getting at the unemployment or the counties with the greatest share of unemployment is there a particular industry that's associated with the high unemployment in those counties yes um a lot to do with retail and um and restaurant and food services and accommodation so those are those are going to be why you see things like taney county and stone county there with branson lecleed down there one thing to know about the unemployment rate is it's a combination of of surveys of the population it's going to a lot of times track where you live as well so sometimes you could be working and uh you know you're living in a different county than you're working in so you can imagine um that has some impacts as well st louis city um the very city right there with people who were going downtown uh and having you know lunch during their work day so they're not doing that and so that's going to be a lot of your restaurant type workers great thank you you also discuss how tourism spending has changed what are your thoughts on missouri's 15 million dollar program for promoting tourism and its potential impacts well i'm glad to see it i mean one of the things that you know especially for rural areas and uh you know and in their cities too st louis and kansas city are big tourism places being right there on the edge of our economy it is it is a industry that supports a lot of jobs uh it is uh you know branson's known lake of the ozarks known throughout the u.s and midwest so really big areas of focus force and jobs for people granted a lot of the jobs aren't aren't the highest paying jobs but still jobs or jobs in a lot of these places and they're very well you know very well part of the economy there so i think um efforts around that are are um are a good thing i know that uh you know obviously travel um you know travel in the in the spread of covid is is a is a very big concern um so it's it's got to be done um with a lot of smart things put in place but um i'm glad to see them addressing that great um you described that 83 of missouri small businesses were open in early july what do we know about the 70 or rather 17 of the firms that closed at that time so are there closures more temporary or are some of them closing permanently it's a combination i think most were planning it to be temporary um and uh and that's you know that was um really the hope but um unfortunately i think some of the these are going to be permanent i think i heard the other day the international or the the restaurant association predicting about one in ten restaurants would permanently close out of this so if you can imagine you know restaurants now being you know eighty percent open for example um then uh you know maybe we're not going to get back to that 100 when i get to 90 of those companies back the uh the you know a lot of smaller restaurants in particular just really don't have a lot of cash on hand to to weather you know three or four months decline um and as we can see recently it's gotten worse uh with with the spread of covet and the health concerns so it really it really is a concern about will that 17 fully open and a lot of times those jobs are going to be in these service industries like restaurants like hotels retailers as well retailers that are that are larger like the walmarts of the world are aren't going to go away you know they're going to be okay but those companies are are the smaller companies are going to be the ones that are really going to struggle especially if they don't have an e-commerce presence sure we have time for one last question you mentioned movement to lower cost locations as a possible long-term structural change for the u.s economy so to what extent have consumers already started making permanent moves and what are they considering other than just cost of living when they do make those moves and like are they willing to move outside of the state where they're currently living for example yeah that's a good question you know it's interesting because on the one hand a lot of you know so a lot of the people who can work remotely are in the knowledge sector so you think of of people typically with higher education degrees doing things that they can do from an office and can be anywhere and those type of people can pick up from san francisco and move to austin texas for example they can they can pick up and move substantially across the country to a lower cost environment but they still a lot of times with the knowledge workers still want to be close enough to a city where there's options for other jobs and there's also just other knowledge workers in their same industry so so you know expecting uh google workers to go out to very small rural counties are probably not realistic um the but there there is one there's there's already already been some studies of of the last half of the of this decade of people moving starting to move out to the suburbs when they're having children and so forth anyways that's already started to happen a little bit the suburbs are the natural place where where we've done it for generations we've moved out to lower cost living yet we still have the restaurants some of the things that we like to access right there so that's going to probably continue and accelerate but it does bring this opportunity for knowledge workers to move out even farther locales and that's again going to really depend on fast and dependable internet speed but also some cultural resources some place of living resources quality of life resources that they're going to also want to have too so it's not just it's not just broadband but it's a combination of those things unfortunately some people just can't do that you're in our service industry you're going to have to be where the work is sure well thank you so much for your time today alan and for sharing your presentation and thank you to our audience too when you exit zoom you'll see a post webinar survey will load in your browser if you could please consider responding we'll use the results to improve the webinar experience and also brainstorm future webinar topics again you should receive a recorded copy of today's webinar via your email within about a day from now and also within that email you'll receive a link to where you can go and download the slides from today so please join us for our next engaging for missouri webinar on wednesday august 12th i'm at that time dr john cromartie who is a geographer with the usda's economic research service will share a presentation titled new privacy measures for the 2020 census potential implications for ers research and usda rural development programs so thanks again for joining us and have a great wednesday and thanks again alan thank you