Unemployment may yo-yo. The housing market may be sluggish. But at least one sector of the local economy is showing slow but sure improvement.
Data released by the city of Duluth in recent days show tourism tax collections up 2.5 percent in May — the most recent month available — over May 2009. Moreover, revenues were up 4.5 percent over what the city had expected to bring in.
This continues a months-long trend of improvements.
So far this year, revenues from lodging, food and beverage taxes also are up a total of 4.5 percent compared to the same period last year.
Those tourism tax collections from January to May are putting $203,211 more in city coffers than the city had budgeted. That’s about $2.6 million coming in instead of about $2.4 million.
It’s not a staggering bonus. but it’s a heck of a lot better than the 8 percent drop in revenues the city saw in the first five months of recession-plagued 2009, compared to 2008.
For months, a major drop in the the Northland’s unemployment rate had been expected as the Iron Range mines geared back up towards full production and some other sectors started seeing recovery.
But while jobless numbers on the Range slowly dropped, the unemployment rate throughout the region held steady or even increased, frustrating some.
That is, until the April stats came out Monday with the big payoff many economic observers were waiting for. It shows unemployment in Northeastern Minnesota dramatically dropping from 9.6 percent in March to 8.2 percent in April.
The foundation had been laid months ago for this good news, not only with the callback of many laid-off workers but with the number of jobs slowly growing, pointed out Drew Digby, regional labor market analyst for the Department of Employment and Economic Development.
It takes about seven weeks for economic changes to work themselves into the stats, he explained.
While we have a ways to go to get to pre-Recession jobless levels of around 6 percent, there’s reason to celebrate Duluth’s current 7 percent rate and what’s happening in other Northland cities: Hibbing’s rate is 8.4 percent, down from a high of 18.4 percent last June and Virginia is at 9.5 percent, down from July’s high of 17 percent.
Besides an improving economy, the increase in employment can be attributed to an early start to seasonal hiring due to employer confidence and maybe even the early spring. A later hiring of census workers here than in some other areas also contributed to the April numbers, Digby said.
During a recent stop in Duluth, a top official with the Minnesota Chamber of Commerce had some interesting observations about Allete.
"Allete is very different form other utilities," said William Blazar, the chamber’s senior vice president for public affairs and business development. "Their customer base is dominated by very few customers."
He was referring to the big manufacturing companies that use the bulk of Allete’s energy: six taconite companies on the Iron Range and several paper mills, he said.
"They probably use more than half the company’s load," he said.
Compare that to Xcel energy, which serves the Twin Cities and has hundreds, maybe thousands of major customers, Blazar said.
But when Minnesota’s taconite production plummeted more than 50 percent in 2009, Allete’s market also shrunk dramatically.
Blazar noted that Allete was able to recover most of its lost margin by selling power in the wholesale market, probably to other utilities.
So the taconite companies returning to full production has more repercussions than putting people back to work and boosting local economies. It means a returning market for Allete. Moreover, the addition of Mesabi Nugget as an Allete customer and potentially PolyMet and Essar Steel means even more market expansion for Allete, he said.
Unemployment didn’t go down in April as expected. It went up.
After holding steady at 9.7 percent for three months, the nation’s unemployment rate rose to 9.9 percent in April, according to numbers released today by the U.S. Labor Department.
That’s edging back toward the Recession’s high point of 10.1 percent, reached in October 2009. Pre-recession jobless numbers were below 5 percent.
But the news isn’t all bad.
The number of Americans entering the job market increased and nearly 300,000 jobs were created, marking the fourth straight month of job growth.
"I was quite pleased with the numbers," said Tony Barrett, an economist at the College of St. Scholastica. "They exceeded my expectations. I know the unemployment rate’s up. But that’s because people who have been out of jobs for a long time and hadn’t been looking, have seen the improvement and they’ve started to look. It’s somewhat of a positive sign."
So are the 290,000 jobs created, overwhelmingly in the positive sector, he said.
Ultimately you measure an economic recovery by the jobs that are created which creates income which creates consumer demand and so the economy goes, he said.
"So this is what we needed to see," he said. "We had a couple of months previously of smaller gains that were barely adequate," he said. "But this number was a very significant and positive number."
Are you more frugal since the economy took a nosedive?
Chances are you are.
Nearly three-fourths of us have become more frugal. And most of us are less willing to take risks with our money, according to a national survey released this week.
While the economy maybe improving, it found Americans are still reeling from the Recession. A whopping 84 percent of Americans are worried about their finances, the March survey for Kiplinger’s Personal Finance magazine found.
Women are more worried than men. And singles are in worst financial shape than married folks, it showed.
Forget about building assets, more are just striving to achieve financial stability. We’re more concerned about losing our job these days than about credit card debt.
Our concerns have clearly shifted. So what are we most worried about?
Not having enough saved for retirement.
But the big question is whether this new frugality will stick. Are our spendthrift ways truly over?
One of the survey’s finding may provide the answer: generousity and thrift are the financial virtues most people now want to pass on to their children.
Well, this is hopeful news.
Manufacturers in Minnesota are more optimistic about 2010 than they were in 2009, according to a survey of 500 manufacturing companies in the state.
One quarter expect to see economic growth in 2010, compared to 19 percent last year. Forty-four percent expect their firm’s annual gross revenues will increase. Only 23 percent expected higher revenues last year, the research sponsored by Enterprise Minnesota found.
Many said the recession has made them better. It’s prompted them to better focus, change operations and to innovate which has positioned them for future growth.
But a diminishing availability of credit is a looming concern. Thirty-seven percent — three times more than last year — have been experienced tight credit. Nearly 30 percent say it’s had a significant impact on their business.
New unemployment data shows small increase from Duluth to the nation.
The increases are all less than three tenths of a percent, but underscore a tenuous recovery.
Duluth’s unemployment rate increased to 7.0 percent in December from 6.9 percent in November. The number of unemployed only slightly increased from 3,137 to 3,179 month to month, with the larger changes coming in the labor force and jobs.
The number of people employed or seeking jobs fell more than 500 from 45,690 to 45,125, and the number of people employed fell about 600 from 42,552 to 41,946.
In St. Louis County, unemployment increased to 8.1 in December from 7.9 in November. The county shed 380 jobs, the labor force diminished 1,300 and unemployment remained relatively unchanged.
Hibbing’s unemployment fell for the sixth straight month to 10.9 percent, while Virginia’s rate remained at 10.7 from month to month.
Minnesota saw its unemployment rate increase to 7.3 in December from 7.0 in November. The rate in the nation increased to 9.7 from 9.4.
All unemployment percentages are seasonally unadjusted.
Chances are, more of us do these days. We’re looking a bit shaggier. And those telltale roots? They’re showing more.
In an earlier blog posting this week, we told you how (go figure) jobs for manicures and pedicures has actually grown during the recession. Although money may be tight, today’s woman is still striving to take care of herself, trying to reduce stress and doing what makes herself feel good. After all, today’s woman believes she’s worth it.
"If they can squeeze out ways to do things for themselves, they’re doing it," says Lila Hickok, owner of La Peinado in Superior.
But Hickok has also noticed another trend during the recession:
Clients are spacing out their appointments more for other services than they used to. They’re going an extra couple of weeks or more between haircuts, even longer between color treatments.
Hmmm, sounds familiar. How about you?
Since it’s a new decade, it’s time to catch up on the tech advancements we missed in the aughts.
Without further ado, Twin Ports Business is now on Twitter.
Here’s the first tweet: "The latest business news and economic tidbits in Northeastern Minnesota from the Duluth News Tribune’s Twin Ports Business. Now on Twitter."
We’ve set it up for RSS feeds to go from our blog to Twitter, so you can never, ever miss a post.
Tweet, tweet, tweet.
Just seven days into the new year, pump prices have surged past 2009 highs as winter storms and a flood of speculative money send oil prices higher.
With the average gallon of gas is now a shade under $2.71, a typical motorist using 50 gallons of fuel a month will pay about $135 a month to fuel up. Last year at this time consumers were paying only about $85 per month.
There are early signs of a recovering economy and job figures due Friday may further that trend, yet consumers have pared way back on energy spending.
It’s not clear how much of an energy burden can be carried with unemployment hovering around 10 percent.
Americans are now spending about $1 billion a day on gasoline with most paying 90 cents to a dollar or more per gallon than they did a year ago.
In less than a month, crude prices have jumped 20 percent and yesterday peaked above last year’s high. That has dragged pump prices to new 15-month highs.
Reporting from the Associated Press.