March 6, 2015

Easing of mortgage requirements

Many Nebraskans were impacted when the housing bubble burst around 2007 and residents and banks foreclosed on many homes. After that mortgage companies and banks put in place strict rules on mortgage eligibility for consumers and home sales plummeted. Frank Packard-Reed is a real estate expert and says they are starting to ease lending requirements.

Packard-Reed says, “Fannie and Freddie have come up with a 3% down program so you can finance up to 97% of the property. It has gotten a little easier because you can borrow more but there are still a number of underwriting standards in place.” 

Packard-Reed says buyers still have to show proof of a job and income can make the down payment and monthly payments on the home.

Economist says Wal-Mart wage hike will pressure competitors

The nation’s largest employer announced last week they are increasing their starting pay to $9. Wal-mart also announced that will increase to $10 in 2016. Creighton University Economist Ernie Goss says Wal-Mart is a $272-billion dollar corporation and this move will not have a big impact on their bottom line. However, Goss says this is not good news for their competitors.

Goss says, “They are going to raise productivity or they are going to have to reduce profits or increase prices. I think they are going to increase productivity. I think it is going to push Target and Costco, two major competitors, to raise their minimum.”

Goss says this is good for consumers, the economy and for taxpayers. He says this wage increase will reduce the number of people receiving the earned income credit on their income taxes and reduce the number of people receiving government benefits like the Supplemental Nutrition Assistance Program – or food stamps.

Goss says Wal-Mart’s motivation to increase their starting wage is to cut the turnover rate, increase productivity by attracting higher quality employees and to stem the push for unionization.

State economy poised for mid-year spurt (AUDIO)

JobsThe forecast for state economic growth this year has brightened.

The Bureau of Business Research at the University of Nebraska-Lincoln has seen the leading economic indicator grow for two months in a row.

Director Eric Thompson says it is broad-based growth.

“It’s in things like construction and manufacturing, especially manufacturing that isn’t closely tied to agriculture, but it’s also in our services,” Thompson tells Nebraska Radio Network.

Agriculture had been spurring state economic growth the past couple of years, but has hit a plateau. Other sectors, primarily in the Omaha and Lincoln metropolitan areas, have taken up the slack and now carry the state economy.

Thompson says growth has been spread throughout the economic sectors with insurance, banking, health care, even retail joining construction and manufacturing as showing promise as we move from winter into spring and summer.

Thompson says the bureau’s survey of 500 businesses indicates most expect sales to grow this year with job growth following.

Nebraska remains in a better economic condition than the nation as a whole.

“Our economy is in a stronger place in a sense that the recession, while it was difficult in Nebraska, was not as steep as you saw in many other parts of the country,” according to Thompson. “So, I think we’ve fully recovered from the recession.”

According to the Bureau of Business Research, business expectations and initial claims for unemployment insurance showed solid improvement. Building construction permits rose slightly.

The full Nebraska Monthly Economic Indicators report and a Technical Report describing the indicators are available at the Bureau of Business Research website, you can go to it by clicking here.

AUDIO:  Brent Martin reports [:45]

UNMC – Nebraska Medicine’s $4.2B impact on Nebraska’s economy

The University of Nebraska Medical Center and Nebraska Medicine have a combined $4.2-billion annual impact on Nebraska’s economy.

University of Nebraska Medical Center Chancellor Dr. Jeffrey God says they recently hired a national consulting firm, Tripp Umbach to conduct a study on how both entities benefit the state’s economy.

Dr. Gold says, “Our work impacts Nebraskans every day. Although our primary goal is to improve the lives of Nebraska through clinical care, education, research and community outreach, we’re proud to be such a strong contributor to the state’s economy and take that responsibility seriously.”

The report shows that in fiscal 2013-14, Nebraska Medicine and UNMC created and supported 28,927 jobs in the state. Combined they generate $99.1-million per year in state and local taxes. The study also showed that about $1 in every $25 in Nebraska’s economy is generated by UNMC and Nebraska Medicine and the Nebraska Medical Center generates one in every 35 jobs in the state.

UNMC graduates working in the state generate an economic impact of $3.9-billion. Based on profession, physicians have a $2.7-billion impact or $1.3-million per graduate. That is followed by dentists with $534-million, pharmacists with $339.9-million, advanced practice registered nurses at 147-million, physician assistants at $134-million and physical therapists at $111.4-million.

Mid-America business index sees modest growth ahead

January’s Mid-America Business Conditions Index rose slightly to 54.8 compared to December’s 54.4.

Creighton University Economist Ernie Goss conducts the monthly survey of business managers and expects modest growth in the months ahead due to slowing energy and agriculture sectors.

Goss says drops in the energy sector will have an impact on employment numbers in several regional states including North Dakota and Oklahoma. He predicts the next unemployment report will show about 200,000 new jobs but says many of them will be part time and low wage.

Goss says about one-third of those surveyed in January are concerned about a drop in customer demand. He says about 1/5th were concerned about rising regulatory costs and another 1/5th is concerned about the cost of the Affordable Health Care Act.

The energy and agriculture sectors continue to slow while others continue to show gains. He expects only modest economic growth in the months ahead.