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The Delaware economic outlook showed improvement in August after signs of a downturn in July.
The leading index of the Federal Reserve Bank of Philadelphia was up nine-tenths of one percent in August after showing a decline of six-tenths of one percent for the month of July.
The July numbers suggested a contraction of the economy in 2017. However, by August the index rose and the outlook from the Philadelphia Fed changed to a forecast that the “expansion in the state’s economy through the first quarter of 2017. “
The index estimates the performance of the economy for the next six months.
An upturn in building permits contributed to the more bullish outlook.
The indices from the Philadelphia Federal Reserve pointed to growth throughout its region,, which includes much of Pennsylvania, a portion of New Jersey and the entire state of Delaware.
“The consensus seems to be that the index is volatile. My takeaway is that Delaware is headed for a slower economy but not a contraction,” said John Stapleford, who heads DECON First, an economic consulting firm based in Newark. “Employment has been flat. Wage earnings have been growing slower than the U.S., due to the type of jobs coming on line). Transfer payments are once again growing faster than wage earnings. And there has been a recent uptick in initial claims for unemployment and total unemployed.”
Delaware has received conflicted signals before, including a warning a year or so ago from Moody’s that the state might be headed for a recession.
The downturn did not occur and the state showed growth in 2016.
However, the state has seen sluggish tax and fee revenues that led to an estimate of a more than $160 million budget shortfall going into 2017.
