Economics - WNY Economic News

The mission of Western New York Economic News is to provide analysis and forecasts of economic trends in the Buffalo-Niagara Falls Metropolitan Statistical Area and contrast these trends with those in New York State and the nation. The newsletter is prepared by George Palumbo, PhD and Mark Zaporowski, PhD, members of the Economics and Finance Faculty at Canisius College, Buffalo, NY.

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2018 WNY Economic News

Volume 21, Number 1

The BEA earnings report, which has historically served as the basis for our projection of the region’s economic health, has been released for the year 2016. This issue of WNY Economic News focuses on the relationship between the regional economies of Western New York and the national economy. The trends in local employment and earnings are analyzed on the basis of both CES and QCEW measures.

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2017 WNY Economic News

Volume 20, Number 3

Though the current business cycle expansion is eight years of age, three years longer than the average post-WWII expansion, revisions of average GDP and GDI growth rates over the last three quarters point to an acceleration of economic growth. Three month Treasury bill yields have continued their climb since the fall of 2016, as the Federal Reserve has continued the process of raising its federal funds target rate. While the Fed has expressed an interest in returning interest rates to more normal levels in the future, its behavior has been tempered because it does not wish rising interest rates to be responsible for slowing down economic growth or possibly returning the economy to recession.

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2017 WNY Economic News

Volume 20, Number 2

The US economic recovery continues at a steady, if unspectacular, pace.  Unemployment rates have fallen to the range generally proclaimed to be “maximum employment consistent with stable prices.” Inflation rates are low in relative terms and within the acceptable range. Income and earnings growth has been slow, but the growth in employment has spread the benefits of the recovery across most economic classifications.  The Fed is proceeding with a slow upward adjustment of federal funds rates.  Within the Western New York region employment growth continues, though at rates substantially lower than those occurring throughout the rest of the US.

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2017 WNY Economic News

Volume 20, Number 1 

The BEA earnings report, which has historically served as the basis for our projection of the region’s economic health, has been released for the year 2015.  This issue of WNY Economic News focuses on the relationship between the regional economies of Western New York and the national economy.

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2016 WNY Economic News 

Volume 19, Number 3

Over the past three quarters (2015:Q4 – 2016:Q2) real GDP growth has been 0.9%, 0.8% and 1.1%, respectively.  The anemic U.S. growth rate has accompanied a slowdown in world-wide economic activity. The slowdown in GDP has, however, been accompanied by a steady improvement in the U.S. labor market.  An average 182,000 jobs per month have been added to non-farm payrolls so far in 2016, compared to an average of 229,000 in 2015.  In 2015, Erie County employment grew at a rate of 1.1%, nearly three times the average growth rate over the period from 2010 through 2014.  The metropolitan area has finally eclipsed the level of employment from before both the 2001 and the 2008 recessions.  Employment is growing in most industries as are average annual earnings.

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2016 WNY ECONOMIC NEWS

Volume 19, Number 2

Weakness in real GDP growth during the first quarter of 2016 was due to a decline in inventory and non-residential fixed investment, declining state and local government expenditures, and a continuing deterioration in our trade balance. Relatively low oil prices and a weak economy have kept the consumer inflation rate below the 2% Federal Reserve’s target. Without acceleration of GDP growth in 2016, it is unlikely that the FOMC will increase the federal funds rate target to above its present 25 to 50 basis point range. Locally, revised CES data, released in January 2016, suggest that the Buffalo MSA is not growing as quickly as pre-revised data made it appear. While the metropolitan area has finally eclipsed the level of employment from before the 2008 recession, it has not yet returned to 2001 levels.

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2016 WNY ECONOMIC NEWS

Volume 19, Number 1

The slowdown in real GDP in the fourth quarter of 2015 was due to a decline in inventory and non-residential fixed investment and deterioration in our trade balance that is partially attributable to the appreciation of the U.S. dollar relative to our main trading partners.  Oil prices have fallen dramatically (below $30 per barrel at the time this was written) leading to an economy-wide inflation rate that has been below the Federal Reserve’s target.  This is likely to slow the FED’s plan of increasing the federal funds rate to more normal levels in 2016.  WNY employment growth has improved in comparison to that of the nation but wage growth, while positive, has lagged that of the nation. 

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2015 WNY ECONOMIC NEWS

Volume 18, Number 3

Real GDI increased by 0.7% during 2015:Q2 after having increased by 0.4% during the first quarter. The national economy has added an average of 212,000 jobs through the first eight months of 2015 and the national unemployment rate stood at 5.1% in August. Inflation remains below the FED’s target of 2% and is uncomfortably close to negative territory.  This is the main reason why the FOMC has kept the Federal Funds target rate unchanged.  Locally, the recent increase in total non-agricultural employment combined with the reduction in the unemployment rate is good news, since the Buffalo region has rarely recovered as fully as the rest of the nation following recessions.  These measures, as well as the changing composition and level of compensation for labor in the regional market will determine if the Buffalo MSA is finally going to end its sustained period of economic and demographic decline.

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2015 WNY ECONOMIC NEWS

Volume 18, Number 2

The BEA earnings report, which has historically served as the basis for our projection of the region’s economic health, has been released for the year 2013. This issue of WNY Economic News focuses on the relationship between the regional economies of Western New York and the national economy.

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2015 WNY ECONOMIC NEWS

Volume 18, Number 1

This strong growth of real GDP over the past two quarters can be attributed to increasing consumption, residential and non-residential investment expenditures, government expenditures and exports.  This strong performance is taking place in an environment where the European economy is stagnating.  The FED has ended its bond buying program while the ECB is about to embark on its own program.  The actions of OPEC that have led to lower energy prices should reverse the pattern of 40 years of output and price manipulation on their part.  As a result, the tremendous wealth transfers that have occurred from energy consumers to owners of energy inputs in the past will diminish as long as lower oil prices persist.

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