Economists see wage, price increases
Thursday, December 19, 2013
King Banaian, economics professor and co-author of St. Cloud Area Quarterly Business Report.
A growing St. Cloud area economy should produce rising wages and prices in the coming months, according to authors of the most recent St. Cloud Area Quarterly Business Report (QBR).
- Job creation expanded 2.2 percent in the year ending October 2013, exceeding its average of 1 percent annualized growth over the previous 15 years.
- Of the 73 area businesses surveyed, 60 percent said their wages and beneifts would increase in the next six months. No businesses expect wage and benefit decreases.
- Twenty-seven percent of firms surveyed expect to increase prices by May 2014, the highest such finding in three years.
"As we have noted in recent reports, local employment has surpassed its prerecession levels," said King Banaian and Rich MacDonald, St. Cloud State economics professors and QBR authors. "Indeed, measured employment of 105,366 in October was the highest level ever recorded."
MacDonald and Banaian argue state and national economic forces will support local economic expansion in 2014. They point to strong national gross-domestic product numbers and production data, and moderately higher earnings and income.
St. Cloud's October unemployment rate was measured at 3.9 percent, the lowest rate since November 2007. Banaian and MacDonald said the unemployment rate would likely rise due to the seasonal nature of St. Cloud labor markets.
National unemployment rates were 7.3 percent for October and 7 percent for November.
The QBR's economic-security thermometer -- the Probabilty of Recession Index -- is the lowest its been since 2011.
Central Minnesota's definitive, survey-based analysis of economic activity is published by Times Media, Greater St. Cloud Development Corp., and these St. Cloud State entities: Center for Economic Education, Department of Economics and the School of Public Affairs.
Read a feature story about QBR authors MacDonald and Banaian. MacDonald's doctorate is from Binghamton University, State University of New York. Banaian holds a doctorate from Claremont Graduate School, Claremont, Calif.
The QBR has been produced four times a year since January 1999. Access past editions at http://repository.stcloudstate.edu/scqbr.
St. Cloud State University