November 23, 2014

Nebraska state unemployment rate drops to 3.4%

workerThe state unemployment rate dropped two-tenths of a percent in October.

The Nebraska Department of Labor announced the unemployment rate for October was 3.4%, seasonally adjusted, down 0.2% from September and down 0.4% from the October unemployment rate last year of 3.8%.

“The October increase in non-farm employment continues the year to year growth Nebraska is experiencing,” said Acting Commissioner of Labor John H. Albin said in a written statement released by the department. “This growth should encourage workers who are looking to get back into the labor market.”

Nebraska’s non-farm employment reached 999,517 in October, up by 8,966 over the year and up 6,449 from September, according to the department.

The most employment growth the last month occurred in education and health services; trade, transportation and utilities; and professional and business services.

The Omaha metropolitan area had an unemployment rate in October of 3.2%; Lincoln at 2.3%.

The state unemployment rate is far lower than the national unemployment rate of 5.8%

Statewide average price at the pump under $3

There is good news at the gas pump in Nebraska. For the first time since December 2010 the statewide average price for a gallon of regular unleaded gasoline is under the $3 mark.

AAA Nebraska spokesperson Rose White says the average price for 87-88 octane rated fuel is $2.97. AAA surveyed 176 Nebraska communities and 105 reported gasoline averages of $2.99 or less.

White says gas prices are closely tied to wholesale crude oil costs and in the past 52-weeks prices have fallen from a high of $107 a barrel down to $75.   It takes 30 to 45 days for crude oil to be processed and delivered to local markets so the downward pressure on prices is likely to continue through the rest of the year.

AAA Nebraska’s survey shows the lowest statewide price is in North Platte at $2.87 and the highest in Norfolk at $3.04. The national average is $2.86.

Economist: Fed is shifting how it uses bonds

Economist Ed Seifried

Economist Ed Seifried

Nebraska investors likely heard the Federal Reserve has ended what it calls quantitative easing — or the QE3 program — and has stopped buying bonds.

Economist Ed Seifried, professor emeritus at Lafayette College, spoke at the Ag Bankers Conference in Omaha this week. Seifried says instead of selling bonds to purge money from the economy, the Fed is making a different move.

“Today, when a bond matures and the Federal Reserve gets the cash, they immediately go out and buy another bond,” Seifried says. “So the $3.5 trillion stays a constant level, but beginning soon, we think sometime in late 2015 maybe early 2016, they’re going to suspend buying of the bonds again. So when a bond matures, they’re just going to just let it mature, let the cash come into the Federal Reserve and stay there.”

Seifried says it will take ten years for the treasury bonds to mature and 30 years for the mortgage-backed securities to mature. The hope with this strategy is that inflation won’t rise too fast, but neither will interest rates.

“Should they expect rapid rises in interest rates? I don’t think so,” Seifried says. “To me, you might see at most 2 or 2.5% a year until we get back to normal which is a prime lending rate in the 7, 8, 9% range, and they’re 3% today. I think over a period of three or four years, you’ll see it getting back to normal.”

Seifried says the end of QE3 may actually be a negative for ag commodities because the money that was being pumped into the economy also supported commodity purchases and the low dollar stimulated demand.

By Jerry Oster, WNAX, Yankton

 

Lincoln best city in the US for Veterans, Omaha 6th

In honor of Veterans Day, WalletHub, the personal financial website, ranked 100 of the most populated cities in the U-S on VA health facilities, veterans living below the poverty line and the availability of jobs. Spokesperson Jill Gonzales says Lincoln landed the number one spot and Omaha came in 6th.

Gonzales says they looked at 19 key metrics to rank the best and worst cities for veterans. Those metrics included percentage of military skill-related jobs, availability of VA health facilities and percentage of veterans living below the poverty line.

According to WalletHub, Lincoln placed 4th in economic wellness and 2nd in environment, education and health of veterans. Omaha ranked 56th in economic wellness but 5th in the environment, education and health category. Omaha also ranked 34th in veteran owned businesses per veteran population and 39th for the percentage of veterans living below the poverty line. Omaha ranked 5th in the cost of living and 12th for veteran housing affordability.

Minimum wage hike, health care increase, added costs lead to restaurant closing

opendocument[1]Shortly after voters in Nebraska said yes to an increase in the minimum wage a Burger King in Hastings announced it would be closing.

There were news headlines that the closing was due to the wage hike. Dennis Erickson, president and CEO of Horizon Holding Inc. that owns the location, says that isn’t entirely true.

“In my opinion anyway the headline was really a distortion of the announcement,” according to Erickson. “This was a business decision based on a lot of factors. It wasn’t only the minimum wage increase. It was also the mandated health care and other rising costs we’ve seen over the years.”

Erickson says the Affordable Health Care Act will have a huge impact on not only their operations but many others across the country. He says right now they offer health insurance to managers and shift coordinators at the cost of about $400,000 a year. If everyone working more than 30 hours a week signs up for health care that cost will hit $1.5-million.

Regarding the minimum wage issue, Erickson says only 6% of their employees now earn the current $7.25 minimum wage and all of them are new hires. He says more than 50% of their employees now make more than $8 an hour.

All the employees now at the location that is closing will be moved to another restaurant in Hastings.