Trends

March 10-23, 2022 The Business Times News Page 19 Trends

INDICATORS AT A GLANCE t New business filings in Colorado, 35,625 in the fourth quarter, down 2.9% from the fourth quarter of 2020. n Business filings Contributors Opinion A tale of two trends While real estate transactions fall, dollar volume climbs in Mesa County Phil Castle n Confidence t Consumer Confidence Index 110.5 for February, down 0.6. s Leeds Business Confidence Business Briefs The Business Times Two trends continue in the Mesa County real estate market — decreasing transactions and increasing dollar volume. Business People Index for Colorado, 58 for the first quarter, up 1.9. t National Federation of Independent Business Small Business Optimism Index 95.7 for February, down 1.4. It’s a function in part of low supplies pushing prices higher in the face of continued demand, said Annette Young, administrative coordinator at Heritage Title Co. in Grand Junction. “That basically is the story of the day.” But Robert Bray, chief executive officer Almanac n Foreclosures of Bray & Co. Real Estate in Grand Junction, s Foreclosure filings in also sees the return of some seasonality to Mesa County, 20 in the local market with slowing in the winter February, up from 2 in months. Rising interest rates on mortgages February 2021. also could exert more of an effect later this t Foreclosure sales in year, he said. “Stay tuned.” Mesa County, 1 in Young said 336 real estate transactions February, down from worth a total of $140 million were reported 5 in February 2021. in Mesa County in February. Compared to n Indexes the same month last year, transactions fell 3.4 percent and dollar volume rose 14.8 percent. s Conference Board Employment Just 13 transactions accounted for a Trends Index, 119.18 for combined $26.3 million, Young said. They included the sale of February, up 1.03. the Mesa View mobile home park for $4.3 million, Ramada Inn t Conference Board Leading Economic Index 119.6 for January, down 0.3%. property for $3.8 million and 14 acres of commercially zoned vacant land for $3.6 million. For the first two months of 2022, 712 transactions worth a total s Institute for Supply Management Purchasing Managers Index for manufacturing, 58.6% for February, up 1%. of $303 million were reported. Compared to the same span in 2021, transactions fell 8.1 percent and dollar volume rose 27.3 percent. According to numbers Bray & Co. tracks for the residential real estate market in Mesa County, 220 transactions worth a total n Lodging of more than $90.5 million were reported in February. Compared s Lodging tax collections in to the same month last year, transactions decreased 16.7 percent Grand Junction, $249,070 and dollar volume increased 7.6 percent. for January, up 70% from January 2021. n Real estate t Real estate transactions in Mesa County, 336 in February, down 3.4% from February 2021. s Dollar volume of real estate transactions in Mesa County, $140 million in February, up 14.8% from February 2021. n Sales s Sales and use tax collections in Grand Junction, $7.5 million for January, up 23.8% from January 2021. s Sales and use tax collections in Mesa County, $4.6 million for January, up 19.4% from January 2021. n Unemployment t Mesa County — 4.6% for December, down 0.1 t Colorado — 4.8% for December, down 0.3. t United States — 3.8% for February, down 0.2. For the first two months of 2022, 439 residential transactions worth a total of more than $180.3 million were reported. Compared to the same span in 2021, transactions dropped 14 percent and dollar volume jumped 8 percent. Young and Bray said low inventories and the resulting lack of selection hamper sales. And though it’s a seller’s market, some people are reluctant to put their homes on the market for fear they won’t be able to purchase another home into which to move. There were just 190 active residential listings at the end of February. That was a 10.8 percent drop from the same time last year and one of just four months over the past decade in which listings have dropped below 200, Bray said. Meanwhile, home prices continue to increase. The median price of homes sold during the first two months of 2022 rose to $372,000. That’s a 26.1 percent increase over the same span in 2021. “I just don’t see how that sustains itself,” Bray said, adding he expects price appreciation to slow later this year. Bray attributed decreasing transactions in part to seasonal slowing that’s returned two years after the onset of the COVID-19 pandemic. That means real estate activity likely will warm up along with the spring and summer weather, he said. Many buyers are purchasing new homes with cash from the sale of their previous homes. But for those using financing, rising interest rates could play a bigger role, Bray said. Higher prices combined with higher interest rates could push some buyers — first-time buyers in particular — out of the market. Meanwhile, property foreclosure activity has picked up in Mesa County, Young said. For the first two months of 2022, 26 foreclosure filings were reported. That’s up from just two for the same span in 2021. Still, the three resales of foreclosed properties during the first two months of 2022 constituted less than 1 percent of overall transactions — far lower than the 10 percent threshold Young considers indicative of a health market. F A measure of optimism among small business owners continues to decline even as concerns mount over inflation, supply chain disruptions and labor shortages. “Inflation continues to be a problem on Main Street, leading more owners to raise selling prices again in February,” said Bill Dunkelberg, chief economist of the National Federation of Independent Business. “Supply chain disruptions and labor shortages also remain problems, leading to lower earnings and sales for many.” The NFIB reported its Small Business Optimism Index fell 1.4 points to 95.7 in February. It was the second consecutive month the index dropped below 98, the average reading over the past 48 years. The small business advocacy group bases the index on the results of monthly surveys of members, most of them small business owners. For February, six of 10 components of the index retreated. Asked to identify their single most important business problem, 26 percent of those who responded to the survey upon which the February index was based cited inflation. That proportion has climbed four points since December to the highest level since the third quarter of 1981. Another 22 percent of respondents cited quality of labor and 11 percent cited labor costs.

Annette Young Robert Bray

Small business optimism drops as worries mount

A net 68 percent of owners reported raising average selling prices, a record high. Price hikes were most frequent in the retail, wholesale and construction sectors. A net 45 percent reported raising compensation, down five points from a record reading in January. A net 28 percent said they expect to raise compensation in the next three months, however. The proportion of business owners who said they expect the economy to improve fell another two points from January. At a net negative 35 percent, more respondents said they anticipated worsening conditions. A net 27 percent reported plans for capital outlays, also down two points. A net 8 percent said they consider now a good time to Bill Dunkelberg expand, down a point. A net 19 percent of owners reported plans to increase staffing, down seven points. A net 48 percent reported unfilled job openings, up a point. The share of those who said they expect more sales fell three points to a net negative 6 percent. The share of those reporting higher earnings remained unchanged at a net negative 17 percent. Among those reporting lower earnings, 28 percent blamed weaker sales and 28 percent cited higher material costs. A net 2 percent of owners reported plans to increase inventories, down a point. A net 7 percent said existing inventories were too low, unchanged from January. F

U.S. payrolls increase, jobless rate decreases

Job growth continues to accelerate in the United States even as the unemployment rate edges down.

Nonfarm payrolls increased 678,000 in February and the jobless rate decreased two-tenths of a point to 3.8 percent, according to the latest U.S. Bureau of Labor Statistics estimates.

The monthly job gain was the largest since July. The jobess rate has retreated to its lowest level since the onset of the COVID-19 pandemic in the U.S.

Moreover, estimated payroll gains for January and December were revised upward a total of 92,000 to 481,000 and 588,000, respectively.

Still, U.S. payrolls remain 2.1 million lower than the prepandemic level in February 2020.

For January 2022, 6.3 million people were counted among those unsuccessfully looking for work. Of those, 1.7 million have been out of work 27 weeks or longer.

Another 4.1 million people were counted among those working part-time because their hours were cut or they were unable to find full-time positions.

The labor participation rate edged up a tenth of point to 62.3 percent, still about a point below the February 2020 level.

Payroll gains in January were spread out among a number of industry sectors. Employment increased 179,000 in leisure and hospitality, 95,000 in business and professional services, 64,000 in health care, 60,000 in construction, 48,000 in transportation and warehousing, 37,000 in retail trades and 36,000 in manufacturing.

The average workweek lengthened a tenth of an hour to 34.7 hours. The average manufacturing work week lengthened four-tenths of an hour to 40.7 hours.

Average hourly earnings for employees on nonfarm payrolls rose a cent to $31.58. Over the past year, average hourly earnings have increased 5.1 percent.

Labor index rises

An index tracking labor trends in the United States has increased, signaling continued job growth in the months ahead.

The Conference Board reported its Employment Trends Index rose more than a point to 119.18 in February with gains in seven of eight components.

Frank Steemers, senior economist at the Conference Board, said hiring and rentention likely will remain challenges for the forseeable future. As the U.S. unemployment rate approaches 3 percent, the tight labor market will push up wages, Steemers said.

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Consumer Confidence Index falls

A measure of consumer confidence has declined for two months in a row on less upbeat expectations for business and labor conditions. The Conference Board reported its Consumer Confidence Index decreased six-tenths of a point to 110.5 in February. A component of the index tracking current conditions increased. But a component tracking the short-term outlook dropped. “Expectations about short-term growth prospects weakened further, pointing to a likely moderation in growth over the first half of 2022,” said Lynn Franco, senior director of economic indicators at the Conference Board. “Meanwhile, the proportion of consumers planning to purchase homes, automobiles, major Lynn Franco appliances and vacations over the next six months all fell.” The New York-based think tank bases the index on the results of monthly household surveys. Economists monitor the index because consumer spending accounts for more than two-thirds of economic activity.

More optimistic assessments of current conditions pushed up the present situation component of the index six-tenths of a point to 145.1.

The proportion of consumers responding to the survey upon which the index was based who said business conditions were “good” fell 1.3 points to 18.7 percent. But the share of those who said conditions were “bad” fell more — 2.7 points to 24.7 percent.

The proportion of consumers who said jobs were “plentiful” fell 1.2 points to 53.8 percent. The share of those said jobs were “hard to get” slipped two-tenths of a point to 11.8 percent.

Less upbeat outlooks for the next six months puled down the expectations component of the index 1.3 points to 87.5.

The share of consumers who said they expect business conditions to improve edged down two-tenths of a point to 23.4 percent. The proportion of those who anticipated worsening conditions fell 1.6 points to 18.1 percent.

The share of those who expect more jobs to become available in the months ahead fell eight-tenths of a point to 21.3 percent. The proportion of those who anticipated fewer jobs increased 1.3 points to 17.9 percent.

While 15.7 percent of consumers said they expected their incomes to increase — down a half point — 12.1 percent said they expected their incomes to decrease. That’s unchanged from last month.

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Leading Economic Index retreats, but still forecasts growth ahead

An index forecasting economic conditions in the United States declined for the first time in nearly a year as concerns mount over the COVID-19 pandemic, higher prices and supply chain disruptions.

The Conference Board reported its Leading Economic Index (LEI) retreated three-tenths of a percent to 119.6 in January. The decline was the first since February 2021.

Over the past six months, the LEI rose 2.6 percent, less than the 4.6 percent gain in the six-month span before that.

Still, separate measures of current and past conditions increased in January. And the index continues to signal improving conditions in the months ahead.

“Widespread strength among the leading indicators still point to continued, albeit slower, economic growth into the spring,” said Ataman Ozyildirim, senior director of economic research at the Conference Board, a think tank based in New York. “However, labor shortages, inflation and the potential of new COVID-19 variants pose risks to growth in the near term.”

The Conference Board projects gross domestic product — the broad measure of goods and services produced in the country — to grow 3.5 percent on a yearover-year basis in 2022.

For January, six of 10 indicators of the LEI advanced — building permits, interest rate spread, leading credit and new orders indexes and new orders for capital and consumer goods. Average weekly manufacturing hours, consumer expectations and stock prices retreated. An increase in average weekly initial claims for unemployment benefits also pulled down the index.

The Coincident Economic Index rose a half a percent to 107.9. The index has increased 1.4 percent over the past six months.

For January, all four indicators advanced — industrial production, nonfarm payrolls, personal income and sales.

The Lagging Economic Index increased seven-tenths of a percent to 110.2. The index has increased 1.2 percent over the past three months.

For January, four of seven indicators advanced, including commercial and industrial financing, consumer credit and the cost of services. A decreased in the average duration of unemployment also bolstered the index. Labor costs pulled down the index. Inventories and the average prime rate charged by banks held steady. F