A new economic report offers some good news for St. Louis... and some just okay news.
The Federal Reserve Bank of St. Louis released its third-quarter St. Louis Burgundy Book on Tuesday. While the housing market in St. Louis is on a definite upswing, the labor market lags behind the U.S. labor market.
The St. Louis residential housing market is showing steady recovery, according to Charles Gascon, a regional economist at the St. Louis Fed. Year-to-date home sales increased 13.6 percent, even faster than the national average. Home prices also rose about 3 percent from a year ago.
"Across the board we’ve seen a lot of houses going on the market and selling quite fast, and they’re selling at prices that are a little bit higher than they were a year ago," Gascon said.
There’s also been an 11 percent year-to-date increase in the number of building permits for single-family homes. Gascon said bankers surveyed expect the demand for mortgages and loans to remain high in the fourth quarter.
"When you kind of combine the whole story from what we’re hearing from bankers with what we’re seeing from real estate contacts, the housing market is looking pretty good and we’re expecting that growth to continue particularly over the next two months, but maybe into next year," he said.
The labor market, on the other hand, is growing at a slower pace. Employment growth for the Fed’s St. Louis zone was slower in the second quarter than in the first. Gascon said while it’s growing steadily, it’s at about half the national rate. Still, he said that’s not as bad as it might seem.
"At the same time if you were to break out national growth across the county, you’d see the West Coast is pulling that national number up a lot higher," he said, "so St. Louis is on par with that sort of central, Midwestern region."
Gascon said government payrolls have been slightly negative to flat in the region, which has weighed on employment growth. The good-producing and private service-providing sectors saw about one percent growth. The one bright spot is the transportation sector. It saw an 11 percent jump in the second quarter.
Even though employment growth is not as fast as in other areas, Gascon said there is more pressure on wages. He said in the last several surveys businesses have reported that wages and costs are going up faster than they had expected.
"Even though we have slow growth the labor market is a bit tighter in St. Louis than it was even a year ago," he said.
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