Public Economics Commons^™

Recession Emerges As The Most Like Scenario, Eric Thompson

Business in Nebraska

The U.S. economy faces the prospect of a second recession as the Federal Reserve Bank continues to raise interest rates to confront inflationary forces. These forces include elevated asset prices and a wage-price spiral. Further interest rate increases are likely given a challenging environment to reduce inflation. Challenges include limited migration and a slow-growing labor force, trade restrictions, regulatory restrictions that limit energy production and raise the minimum wage as well as excessive federal government spending. Federal spending through the CARES Act, Coronavirus Supplemental Appropriations Act, American Rescue Plan, and Infrastructure Investment and Jobs Act continue to fuel excess demand. …

Growth Likely In A Time Of Uncertainty, Eric Thompson

Business in Nebraska

The U.S. economy continues to recover from the recession which occurred during March and April of 2020. Demand has been strong for both goods and services. At the same time, supply constraints are a concern in the economy, contributing to both higher prices and in some cases lost production within industries. Supply constraints are evident in both inputs (supplies) and labor. Labor force growth has been anemic in the last two years given slow population growth and a roughly 2 percent decline in the labor force participation rate. Looking forward, the baseline outlook is for the U.S. economic recovery to …

Nebraska Recovers From The Pandemic Economy, Eric Thompson

Business in Nebraska

The Covid-19 Pandemic threw the U.S. economy into a severe and sharp recession during the first half of 2020. A combination of government “shutdown” restrictions and private actions led to a particularly severe decline in economic activity in late March and April. The lifting or reduction of government restrictions across the United States led to a fast recovery in subsequent months, especially as businesses and consumers learned to adapt to their new operating conditions. However, the rate of recovery has slowed recently as the spread of Covid-19 has accelerated and many businesses have curtailed travel, maintained “work from home” policies, …

Producer Services: An Engine For High-Wage Job Growth, Spencer Cook, Eric Thompson

Business in Nebraska

Producer services providers are firms that sell services primarily to the business community rather than to individuals and households. Many producer services businesses are classified in the Professional, Scientific, and Technical Service (PSTS) industry. Accounting firms, consultants, and computer design services are prominent examples of PSTS businesses that are worth studying for three reasons:

1. SUPPORT OF OTHER INDUSTRIES: PSTS industries supply the broader business community, making them a critical segment of the economy.

2. RAPID HIGH WAGE JOB GROWTH: Many PSTS industries are rapidly growing and pay high wages. The producer services sector, in fact, is the principal source …

The Nebraska Economy Responds To The Covid-19 Pandemic, Eric Thompson

Business in Nebraska

The Nebraska economy will contract in 2020 but the rate of decline will not be as rapid as nationwide. The economic structure of Nebraska is more focused on production and transportation than the national economy and less focused on hard-hit industries such as hospitality, entertainment, automobile parts and assembly, and oil production. Nebraska also may benefit from a higher quality workforce, which is better able to adapt to changing economic conditions.

Employment will drop by 2.4% in Nebraska in 2020, much less than the national rate of decline. Employment will rebound by 2.0% in 2021 and 1.4% in 2022. With …

Finally, Nebraska: A Synthetic Control Analysis Of Legislative Structure, William B. Hankins

Research, Publications & Creative Work

I estimate the impact of Nebraska’s 1937 switch from a bicameral to a unicameral legislature on state-level government expenditures. Using the synthetic control method I create a counterfactual Nebraska from a weighted-average of other potential control states and compare spending in this “synthetic Nebraska” to spending in the real Nebraska. Relative to the synthetic control, Nebraska experiences a sharp decrease in expenditures per capita immediately following the switch to a unicameral legislature, however, the difference appears to diminish over time. Placebo tests show that if the change in Nebraska’s legislative structure were randomly assigned amongst the sample of states, and …

Consumers Support A Slowing Economy, Eric Thompson

Business in Nebraska

Nebraska will record moderate economic growth during the forecast period but will lag U.S. growth. Like the national economy, growth Nebraska’s goods producing sector will struggle. Farm incomes will be flat from 2020 to 2022 after improving this year. Manufacturing employment also is expected to drop. However, most other sectors will expand, including services, finance and construction. Projected growth rates for 2020 to 2022 are presented in Table 1.

Employment will grow by 0.6% to 0.8% per year, below the national rate. Non-farm income will grow between 3.7% and 3.8% each year. This growth readily exceeds inflation and population growth, …

Trends And Tariffs: Nebraska In An Aging Recovery, Eric Thompson

Business in Nebraska

Nebraska will record solid economic growth during the forecast period but will lag U.S. growth. Nebraska’s large farming sector is struggling and will not contribute much to economic growth during the forecast period. Job growth also will be sluggish in transportation and retail trade. Job growth, however, will be stronger in the services, finance, manufacturing and construction. Projected growth rates for 2019 to 2021 are presented in Table 1.

Employment will grow by 0.7% to 0.9% per year, below the national rate. Nonfarm income will grow between 4.4% and 4.5% each year. This growth readily exceeds inflation and population growth, …

Moderate Growth With A Stronger Industrial Sector, Eric Thompson

Business in Nebraska

Nebraska will record solid economic growth during the forecast period but will lag U.S. growth. While Nebraska’s large farming sector has stabilized, it will not contribute much to economic growth during the forecast period. Job growth also will be sluggish in transportation, retail trade and state and local government. Job growth, however, will be stronger in the services, finance, manufacturing and construction. Projected growth rates for 2018 to 2020 are presented in Table 1.

Employment will grow by 0.8% to 1.0% per year, below the national rate. Non-farm income will grow between 3.6% and 3.8% each year. This growth is …

Nebraska Business And Consumer Confidence Indexes: March 9, 2018, Eric Thompson

Leading Economic Indicator Reports

Nebraska consumer and business confidence fell during February 2018, dropping from the near-peak levels seen in January. The Consumer Confidence Index – Nebraska (CCI-N) fell to 101.6 in February from a value of 115.2 in January. The February value remains above the neutral level of 100.0. The Business Confidence Index – Nebraska (BCI-N) fell to 107.4 In February from 112.2 in January. Both monthly readings were well above the neutral value of 100.0 suggesting that business confidence remains strong. When asked about the most important issue facing their business, customer demand was mentioned by 38 percent of respondents. But, there …

Nebraska Business And Consumer Confidence Indexes: February 2, 2018, Eric Thompson

Leading Economic Indicator Reports

Consumer and business confidence rebounded in Nebraska during January 2018. The Consumer Confidence Index – Nebraska (CCI-N) rose to 115.2, well above the neutral level of 100.0 and a value of 93.3 in December 2017. This is the highest level recorded for the CCI-N since it was first released in February of 2016. The Business Confidence Index – Nebraska (BCI-N) rose to 112.2 in January from 107.5 in December. Both monthly readings were well above the neutral value of 100.0. When asked about the most important issue facing their business, customer demand was mentioned by 40 percent of respondents. The …

Nebraska Business And Consumer Confidence Indexes: January 5, 2018, Eric Thompson

Leading Economic Indicator Reports

Consumer and business confidence declined in Nebraska during December 2017. The Consumer Confidence Index – Nebraska (CCI-N) fell to 93.3 in December, well below the neutral level of 100.0. The index had reached a record level of 106.2 in November, but that high level of confidence was not sustained. The Business Confidence Index – Nebraska (BCI-N) fell from 114.1 in November to 107.5 in December. While lower, the December reading remains well above the neutral value of 100.0. When asked about the most important issue facing their business, customer demand was mentioned by 38 percent of respondents. The availability and …

Nebraska Snaps Back, Eric Thompson

Business in Nebraska

Nebraska will fully participate in stronger U.S. economic growth. While the farming sector will continue to face challenges, farm income will rise slightly during the forecast period, and consequently, will no longer detract from Nebraska economic growth. Nebraska will match U.S. job growth, with job growth particularly strong in services, construction, and retail trade. The agricultural processing sector also will expand employment. Projected growth rates for 2018 through 2020 are presented in Table 1.

Employment will grow by 1.1% to 1.2% per year, matching the national job growth rate in 2019 and 2020. Non-farm income will grow between 3.9% and …

Nebraska Monthly Economic Indicators: November 22, 2017, Eric Thompson

Leading Economic Indicator Reports

The Leading Economic Indicator – Nebraska (LEI-N) 1 fell by 0.24% during October of 2017. The decrease in the LEI-N, which is designed to predict economic activity six months into the future, suggests that economic growth will slow in Nebraska during the second quarter of 2018. The fall in the indicator was due to an decline in building permits for single-family homes and manufacturing hours-worked. There also was an increase in the value of the U.S. dollar in October. The increase in the value of the dollar is challenging for Nebraska exporters. In terms of positive components, there was a …

Nebraska Monthly Economic Indicators: October 25, 2017, Eric Thompson

Leading Economic Indicator Reports

The Leading Economic Indicator – Nebraska (LEI-N) 1 rose by 1.86% during September of 2017. The increase in the LEI-N, which is designed to predict economic activity six months into the future, suggests solid economic growth in Nebraska during the first quarter of 2018. The rise in the indicator was due to an increase in building permits for single-family homes and growth in manufacturing hours-worked. There also was a decline in the value of the dollar in September, which is positive for Nebraska exporters. Finally, there were positive business expectations. Businesses responding to the September Survey of Nebraska Business reported …

Nebraska Monthly Economic Indicators: September 20, 2017, Eric Thompson

Leading Economic Indicator Reports

The Leading Economic Indicator – Nebraska (LEI-N) 1 fell by 0.38% during August of 2017. The decline in the LEI-N, which is designed to predict economic activity six months into the future, suggests that the Nebraska economy will grow slowly during the first few months of 2018. The drop in the indicator was primarily due to a decline in manufacturing hours-worked during August. Building permits for single-family homes and airline passenger enplanements also dropped slightly. There were two positive components of the LEI-N. Businesses responding to the August Survey of Nebraska Business reported plans to increase sales and employment over …

Nebraska Business And Consumer Confidence Indexes: September 1, 2017, Eric Thompson

Leading Economic Indicator Reports

Nebraska’s consumer and business confidence fell during August. The Consumer Confidence Index – Nebraska (CCI-N) stood at 100.9 in August, below the reading of 102.5 from July. Notably, the CCI-N remained above the neutral value of 100.0 during August. The outlook of Nebraska businesses remained strong. The Business Confidence Index – Nebraska (BCI-N) stood at 104.2 in August, close to the value of 105.1 during July, and well above the neutral value of 100.0. When asked about the most important issue facing their business, customer demand was mentioned by 35 percent of business respondents. Businesses also faced growing competition in …

Nebraska Monthly Economic Indicators: August 23, 2017, Eric Thompson

Leading Economic Indicator Reports

The Leading Economic Indicator – Nebraska (LEI-N) 1 rose by 0.56% during July of 2017. The increase in the LEI-N, which is designed to predict economic activity six months into the future, suggests that the Nebraska economy will grow through the first month of 2018. Four components of the indicator improved during July. Business expectations were solid and manufacturing hours grew. The value of the U.S. dollar continued its recent decline, a positive sign for Nebraska’s export-oriented businesses. Further, in a positive sign for the labor market, there also was a drop in initial claims for unemployment insurance. In terms …

Nebraska Business And Consumer Confidence Indexes: August 4, 2017, Eric Thompson

Leading Economic Indicator Reports

Consumer and business confidence remained strong in Nebraska during July but fell from June levels. The Consumer Confidence Index – Nebraska (CCI-N) stood at 102.5 in July after a reading of 104.7 during June. Despite the decline of 2.2, the CCI-N remained above the neutral value of 100.0, indicating strong consumer confidence. The outlook of Nebraska businesses also was strong. The Business Confidence Index – Nebraska (BCI-N) fell to 105.1 in July from 109.2 in June. The BCI-N remained well above the neutral value in July, despite the 4.1 point decline, which indicates that business confidence is also strong in …

Nebraska Monthly Economic Indicators: July 26, 2017, Eric Thompson

Leading Economic Indicator Reports

The Leading Economic Indicator – Nebraska (LEI-N) 1 rose by 2.75% during June of 2017. The rapid increase in the LEI-N indicates that the Nebraska economy will grow quickly at the end of 2017. All components of the indicator rose during June. Business expectations were strong while the value of the U.S. dollar fell, a positive sign for Nebraska’s export-oriented businesses. There also was a sharp increase in building permits for single-family homes during the month.

Nebraska Business And Consumer Confidence Indexes: July 7, 2017, Eric Thompson

Leading Economic Indicator Reports

Consumer confidence rose sharply in Nebraska during June 2017 while business confidence remained very strong. The Consumer Confidence Index – Nebraska (CCI-N) stood at 100.4 in May but rose to 104.7 during June, which is well above the neutral value of 100.0. The outlook of Nebraska businesses remained very strong. The Business Confidence Index – Nebraska (BCI-N) fell to 109.2 in June, well above the neutral value and just below its May value of 110.2. Business confidence has been very strong in Nebraska throughout the first half of 2017. When asked about the most important issue facing their business, customer …

Nebraska Monthly Economic Indicators: June 21, 2017, Eric Thompson

Leading Economic Indicator Reports

The Leading Economic Indicator – Nebraska (LEI-N) 1 fell by 0.51% during May of 2017. This is the second consecutive monthly decline in the LEI-N. The declines followed three months of rapid increase from January through March of 2017. Taken together, the LEI-N values imply a moderation in economic growth in Nebraska in late 2017 after strong growth midyear. Among the components of the indicator, business expectations were strong during May while the value of the U.S. dollar fell, which is a positive sign for Nebraska’s export-oriented businesses. However, manufacturing hours, building permits and airline passen

More Balanced Economic Growth, Eric Thompson

Business in Nebraska

There has been a re-balancing of both global and domestic economic growth during 2017. Globally, growth is improving in Europe and China, yielding more balanced international growth. Within the United States, growth also has become more balanced across industries. As in past years, the service sector, supported by growth in employment and real wages, has grown steadily with increases in retail trade, business services, personal services and construction activity. However, in recent months, there also has been improved growth in the industrial sector, with a rebound in the energy sector, and more business investment in capital equipment. The result is …

Nebraska Business And Consumer Confidence Indexes: June 2, 2017, Eric Thompson

Leading Economic Indicator Reports

Consumer confidence fell in Nebraska during May 2017 while business confidence remained very strong. The Consumer Confidence Index – Nebraska (CCI-N) fell to roughly neutral during May. The CCI-N stood at 102.5 in April but fell to 100.4 during May, which is only slightly above the neutral value of 100.0. The outlook of Nebraska businesses remained very strong. The Business Confidence Index – Nebraska (BCI-N) rose to 110.2 in May, above its April value of 109.1 and well above the neutral value. Business confidence has been very strong in Nebraska during the first five months of 2017. When asked about …

Nebraska Monthly Economic Indicators: May 24, 2017, Eric Thompson

Leading Economic Indicator Reports

The Leading Economic Indicator – Nebraska (LEI-N) 1 fell by 0.88% during April of 2017. The decline followed three months of rapid increase in January through March, implying a moderation in the outlook for the Nebraska economy in late 2017. Among the components of the indicator, business expectations were strong during April while the value of the U.S. dollar fell, which is a positive sign for Nebraska’s export-oriented businesses. However, manufacturing hours, building permits and airline passenger counts all declined during April, while initial claims for unemployment insurance rose.