July 2014 Economic Index Shows Most Sectors Declining

The Humboldt Economic Index.  produced by Dr. Erick Eschker and his team at the Economics Department of HSU, does not show a pretty picture this month.  The leading indicators are, shall we say, mixed.

Lumber is up, but Hospitality, Retail and Home Sales were down in July, as were building permits and help-wanted advertising.  On the positive side, manufacturing orders are up  slightly and UI claims are down. The national jobless rate declined to 6.1 percent in June while the unemployment rate was 7.2, virtually the same as the State as a whole.

Here’s what you’ve been waiting for: gas prices. “Both California and the Northern California region have seen 8% decreases in their average gas prices this month, while Eureka’s average price stayed at $4.25 in June.”  Enjoy the report, and our continued thanks to the HSU team.

One thought on “July 2014 Economic Index Shows Most Sectors Declining

  1. SkyWest stock price has dropped over ten percent in the last two days. They are projecting an annual loss, and have reported a 2Q loss.The airline plans to shrink over the next 18 months in an effort to improve its performance, shedding 156 of the smaller 50-seat regional jets that it flies on behalf of network carriers…Jet fuel prices have skyrocketed from less than $1 per gallon to around $3 per gallon. Business travelers have grown tired of the cramped conditions (and lack of first class seats) on 50-seat jets. Recently, pilot shortages have become yet another headache for 50-seat-jet operators.reported a second-quarter net loss of $14.7 million, reversed from a $20.7 million net profit in the 2013 June quarter. Compounding expenses noted by the company for the second-quarter performance included increased flight crew costs related to implementation of FAR117 flight and duty rules [the so-called “rest rules”]; pilot attrition and turnover; and training/start-up costs associated with the company’s newly added Embraer E-175 regional jet aircraft.SkyWest also cited “lower than anticipated performance incentive bonuses under our flying contracts … [and] unfavorable flying contract settlements [resulting, in aggregate] in $9.8 million lower revenue [year-over-year]” as one of the major factors behind the quarter’s financial outcome.As of June 30, SkyWest’s fleet included 501 50-seat regional jets, 211 65-to-76-seat regional jets and 42 30-seat turboprops. By the end of the year, SkyWest expects to reduce its 50-seat regional jet fleet by 10.2%.

    “In the second half of 2014, SkyWest expects 56 of its unprofitable 50-seat aircraft contracts will naturally expire and the aircraft will be returned to lessors,” the company said. “SkyWest also expects an additional 101 unprofitable 50-seat aircraft contracts will naturally expire and be removed from service by Dec. 31, 2015.”

    So why would SkyWest get RDD (Redding) to pursue a federal grant for a minimum revenue guarantee (MRG) slush fund to pay for a switch from EMB-120 30 seat prop jobs to a 50 seat RJ dinosaur.

    http://www.redding.com/business/local-business/grant-would-help-skywest-run-regional-jets-in-redding_39914937

    comments may be visible to non-subscribers.

    In the end, it looks like economics rule.

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