State Economic Watch

The March 4 edition of the Federal Reserve’s Beige Book contained many of the same sentiments expressed in the previous release. Businesses are generally optimistic but rising costs continue to pressure margins.  Seven of the twelve Federal Reserve District banks reported modest improvement in economic activity. Two reported flat economic activity (Boston and St. Louis) and  three noted modest declines (New York, Minneapolis, and San Francisco). One theme that’s consistent across almost all of the Districts is that of the stressed consumer. Low to moderate income consumers are being particularly squeezed by high grocery, energy, and health care costs, with a notable pick-up in requests for food and housing assistance noted in several Districts. One contact in the New York District noted that even higher income consumers were price sensitive and that they “shopped across multiple outlets to find value”. The stress on consumers appears to be bleeding into auto sales, with most...

A new economic report from the University of Virginia's Weldon Cooper Center for Public Service forecasts state GDP growth of only 0.3% in 2026 compared to a 1.5% increase in 2025. The UVA economists see 2026 as an economic trough for the state however, as their forecast calls for state GDP growth of 1.6% in 2027. They also project 10,300 in job losses, or a decline of 0.2%, in 2026, followed by 0.9% growth in 2027. The state’s unemployment rate is projected to increase to 4.4% by 4Q2026, before declining in 2027. The study's authors expect that payroll declines in the government, manufacturing, hospitality, and arts sectors will be partially offset by gains in the healthcare, construction, and transportation sectors in 2026.

Last month, this blog wrote about a report by the Kansas City Fed that noted the surprising strength in agricultural land values, given the weak credit conditions in the farm sector. Now, the Federal Reserve Bank of Chicago is out with a similar study. In its February 2026 AgLetter, the Chicago Fed’s economists found that agricultural land values in the 7th Federal Reserve District increased 6% in 2025, after declining slightly in 2024. At the same time, they found that agricultural credit conditions continued to decline in 2025, with 5.6% of loans “having major or severe repayment problems” in 4Q2025, the highest such figure since 2Q2020, according to the Chicago Fed economists. Of the five states that comprise the 7th district, Wisconsin and Indiana posted the largest agricultural land value increases in 2025.

On Thursday, Indiana Governor Mike Braun signed a bill establishing the Northwest Indiana Stadium Authority “for the purpose of acquiring and financing certain facilities”. The facility in question of course, is a new stadium for the Chicago Bears in Hammond, Indiana. Similar to the financing package put together for the Lucas Oil Stadium development several years ago, the bill authorizes the Authority to issue bonds to finance construction of the stadium. The bonds would be repaid from funds generated by a basket of tourism taxes, event taxes and tax increment revenue. The Bears have not made a final decision yet. A competing site in Arlington Heights, Illinois is also under consideration.

Like results of its Manufacturing Survey, the Federal Reserve Bank of Kansas City’s February Services Survey indicated that services activity in the Tenth Federal Reserve District increased in the month. The top line services composite index (SA) increased to 6 in February from 2 in January, for the third consecutive m/m increase in this measure. The employment index weakened to -5 from -2 in the prior month, but the hours worked and part-time employment indexes improved. The six-month expectations composite index was slightly lower, dropping to 13 from 15 in January, and revenue/sales expectations cooled to 21 from 30, but all three of the employment expectations indexes increased m/m. Finally, capex expectations were a touch higher at 17 compared to 14 in January.

According to the Federal Reserve Bank of Kansas City’s most recent survey , manufacturing activity in the Tenth Federal Reserve District increased in February. The survey’s composite index increased to 5 in February from 0 in both January and December. Almost all of the component indexes (SA) of the survey including production, shipments, and new orders improved m/m, but the employment index fell to -6 in February from 0 in January. However, the average workweek increased slightly from 4 to 6. The six-month expectations indexes all increased measurably in February. The composite expectations index increased to 15 from 7 in January, while the employment index rose to 22 from 3, and the capex index gained 8 points to 13.