The autumn season brings full tilt to Chicago’s convention and tourism activity. Out on the sidewalks of downtown Chicago, office workers such as me find themselves dodging out-of-towners who are gazing upward at the tall buildings. This year, sidewalk hazards of this sort are especially abundant. The professional building gazers [...]
The Midwest automotive belt faces an extraordinary challenge of work force transition; namely, profound structural change in the auto sector on top of the cyclical impact of a deep national recession. At an upcoming conference, the Federal Reserve Bank of Chicago will partner with the Brookings Institution’s Metropolitan Policy [...]
By Emily Engel, Senior Associate Economist and Britton Lombardi, Associate Economist
Waukegan, IL, has responded to the challenges of a diminished manufacturing base by looking to its assets and opportunities. Over the past decade, the U.S. has experienced steep declines in manufacturing jobs, especially in Midwest towns—the heart of the [...]
Demographer William H. Frey calls to our attention a striking turnaround in population growth in the central cities of metropolitan areas. Since the 2005-06 peak of the housing construction boom in the United States, the growth rates of central cities have begun to gain ground on surrounding suburban areas. [...]
In part, American households have adjusted to local economic shocks by picking up and moving to regions where job and income opportunities are more abundant. Some of these movements have been broad and steady, such as the shift in population westward from the east over the past two centuries, and [...]
by Thomas Klier
A few weeks ago, at the Detroit Branch of the Federal Reserve Bank of Chicago, we held a workshop that discussed the significant challenges in meeting the federal government’s new fuel efficiency standards. To help meet these challenges, the President recently signed into law a “cash-for-guzzlers” [...]
by Thomas Klier
A recent symposium at our Detroit Branch addressed the automotive industry’s challenges in meeting stricter fuel efficiency standards. The 2007 energy bill set a new target of 35 miles per gallon for the corporate average fuel efficiency (CAFE) of new vehicle sales . [...]
By Martin Lavelle and Bill Testa
Despite the fact that the U.S. is Canada’s largest trading partner and vice versa, northern border crossing conditions have sometimes been given short shrift. Today, in some places along the border, freight and travelers use outdated infrastructure in a post 9/11 world where security [...]
Since at least the 1960s, central cities of large metropolitan areas have experienced challenging times. In many cases, large shares of the population and jobs have shifted from these central cities to their suburbs. More recently, over the past two decades, central cities’ travails have eased somewhat; the declines in [...]
In the current environment of automotive plant shutdowns, the pursuit of economic adaptation and revival has become urgent for many communities whose livelihoods largely depend on the automotive industry. On April 15, knowledge experts, policymakers, and community representatives gathered at a conference event in Chicago. Its purpose was to [...]
By Bill Testa and Britton Lombardi
The U.S. work force has been “upskilling” in recent decades, that is, average work force skills have been climbing. Evidence suggests that such upskilling has been taking place broadly across U.S. industries, including manufacturing. However, manufacturers have been especially disappointed by what they see as [...]
By Rick Mattoon
Throughout the nation, state governments have been crying uncle as revenues have hit a tailspin and expenses for Medicaid and public welfare have accelerated. Estimates of the cumulative deficit facing state governments exceed $100 billion, and the National Association of State Budget Officers is calling this the [...]
By Bill Testa and Vanessa Haleco-Meyer
Longtime Midwest residents may be befuddled by ongoing comparisons of the current national recession with those of 1974-75 and 1981-82. While the headlines suggest this recession compares, so far, with the deepest recessions of the past 50 years[1], we in the [...]
The manufacturing sector exerts an outsized impact on the Midwest economy—especially during cyclical downturns. Regional jobs and income are approximately 30 percent more concentrated in manufacturing in the Seventh District than in the nation as a whole. The District’s economy is even more concentrated in durable goods production--both capital goods, [...]
by Bill Testa and Vanessa Haleco-Meyer
Government agencies regularly report statistics that reflect state and local labor market conditions. These measures are far from perfect in their accuracy, and they often seem to conflict. Yet, these measures currently agree to a negative view of the labor markets in the Seventh Federal [...]
By Britton Lombardi and Bill Testa
Attracting immigrants to the Midwest may be an especially lucrative objective from a regional economic development standpoint. As discussed in previous blog entries, the growth performance of metropolitan regions has been strongly linked with the educational attainment of its work force, especially college [...]
For half a century or more, the industrial belt of the Great Lakes and Midwest has lagged counterpart regions in much of the South and West. Large midwestern metropolitan areas arguably offer the best prospects for relief from this historical pattern. The reasons are rooted in a fundamental restructuring of [...]
By Rick Mattoon
It is hardly a secret that most state governments are facing tough times. Indeed, state governments are reporting that slower economic activity is affecting revenue collections. A recent fiscal survey by the National Conference of State Legislatures found a combined $140 billion deficit over the current and [...]
This year’s Nobel Prize in Economics was awarded to Paul Krugman for his insights into spatial concentration of economic activity and the relationships among industry clusters, firm or industry-specific economies of scale, and patterns of international trade. In illustrating the flavor of his theoretical work at his Nobel Prize [...]
Back in the 1930s, policy makers perhaps contributed to the economic downturn by sharply lifting tariffs on imports into the U.S.—the infamous Smoot-Hawley legislation passed on June 17, 1930 that raised import tariffs on over 20,000 goods. In response to these policy actions, our trading partners raised tariffs (and nontariff [...]
Downturns in economic conditions often come as a surprise. In fact, time lags between statistical releases and the conditions that they reflect can mean that economic slowdowns are not known until months after they have begun. Statistical information covering individual reasons tends to be worse in this regard.
Today [...]
Sometimes when I am out speaking to groups about the Midwest’s economic future, someone in the audience will assert that the Great Lakes Region’s past glories will ultimately be restored because “they (other U.S. regions) will run out of water and we have plenty of it.” This assertion may be [...]
By Britton Lombardi, Associate Economist
Wage growth continues to grow more sharply for educated workers, but how can states and cities build their work force in this direction?
For one, a “grow your own” approach to enhancing the local supply of educated workers may be helpful. States tend to have [...]
For those of us who are aged 50 and older, it is easy to forget that younger generations did not experience the energy crunch of the 1970s nor the many (often failed) public policy responses to the OPEC oil price run-ups. With today’s similar developments in energy markets, it is [...]
By Rick Mattoon
“The Midwest is failing the challenge of globalization, largely because it’s so balkanized, with each state trying to compete in the global economy. Midwestern states are simply too small, too incompetent, too obsessed with the wreckage of the industrial economy, to deal with the problems of the [...]
By Thomas Klier
For the past 11 years, sales of light vehicles have consistently been above 15 million units per year, representing an unusually strong run for this industry. Toward the end of 2007, the U.S. market for motor vehicles started to slow down. As the price for gasoline kept [...]
By Rick Mattoon
As water levels recede, the region is beginning to take stock of impact from some its worst flooding since 1993. The geographic footprint of this year’s flooding (depicted below) is less extensive than the nine states and 504 counties affected 15 years ago. And as always, an [...]
Few outside the state of Michigan are fully aware of its economic woes. Nationally, the U.S. economic slowdown, housing market decline, and rising gasoline prices have captured the headlines. Even within the Midwest, spring and early summer flooding have dominated our news. Somewhat lost in the shuffle, Michigan payroll jobs [...]
Across the Midwest, perhaps no economic development issue looms as large as the diminishing role of manufacturing. The Midwest’s once rapid population growth and lofty standard of living largely evolved from the industrialization that took place over the past 150 years. Yet, in recent years, job levels in manufacturing have [...]
For nations, gross domestic product (GDP) is the most widely used yardstick to measure economic activity and growth. Conceptually, GDP measures the value of output produced by the market economy within a year or other period. In addition, GDP is defined as output produced within a designated geographic area such [...]
By Emily Engel, Associate Economist
There is a greater concentration in manufacturing among the five states of the Seventh Federal Reserve District than in the nation. For example, as measured by the share of payroll jobs in manufacturing, Indiana ranked first among the 50 states in 2007; Wisconsin, second; Iowa, fourth; [...]
Americans sometimes harbor mixed feelings about investment in enterprises on U.S. soil that are owned and directed by companies domiciled abroad. Yet for the most part, investment from overseas represents a validation of the productive business climate in the domestic economy. Here, our system of law and contracts, along with [...]
Two fine studies have been released this year that can guide the slow-growing Midwest in finding its “way forward.” At a time when national sentiment has been running high to tighten national borders between the U.S. and other nations, both reports strongly argue for lowering restrictions on nearby borders—namely those [...]
By Rick Mattoon
It has become almost hackneyed to proclaim that we live in a knowledge economy driven by innovation. The mantra of current economic development gurus is that the race goes to the smartest and the swiftest. Yet, despite this popular consensus that innovation may be the key factor [...]
What role does migration play in helping regions such as Southeast Michigan adjust to profound economic shocks? For the most part, out-migration is not usually the favored choice of families who have strong social and economic ties to their communities and region. Regions under duress first look to rebuild and [...]
Expanding export activity has taken on added importance in recent years. For example, the newly released Economic Report of the President (ERP) reports that export growth accounted for one-third of U.S. economic growth in 2006 and 2007. Looking ahead to 2008, this export importance will continue as the U.S. [...]
By Rick Mattoon
Plenty of evidence is emerging that state and local governments are headed into a major fiscal pinch. Tax revenues are decreasing across the board, as everything from corporate profits to employment declines. The big question is how well are the states positioned to weather this storm? Is [...]
By Britton Lombardi, Associate Economist
As the U.S. continues to grow into a knowledge-based economy, human capital and ideas earn a higher premium. Therefore, competition for future economic growth and vitality leaves states and large metropolitan areas vying to attract and retain the young, well-educated population within the U.S., [...]
The nationwide falloff in residential investment activity is unfolding along various channels and to varying degrees across U.S. regions. Falling residential activity is being felt in consumer spending, manufacturing production (e.g. construction equipment, appliances, and materials), the financial sector (e.g. mortgage and development financing), real estate (sales) and, of course, [...]
