State Economic Watch

Another month, another low information State Employment Report . Today’s release from the US Bureau of Labor Statistics shows little change in state employment markets in August. Only four states posted m/m increases in nonfarm payrolls in the month, the largest on a percentage basis being a 0.6% gain in New Mexico. No single sector dominated in New Mexico, but most of the gain was concentrated in construction, health & ed, and government. The remaining 46 states saw no material change in employment. The y/y numbers told a similar story, with eight states posting payroll increases and 42 staying flat. The largest y/y percentage gainers were Louisiana, New Mexico, and South Carolina, all at 1.6%. Louisiana saw gains from construction, while New Mexico benefited from increases in health & ed and government. South Carolina saw gains across almost all of the employment sectors, especially health & ed and leisure & hospitality. The District of Columbia continues to suffer fr...

Manufacturing activity in the Philadelphia area expanded in September but at a slower pace than in August according to the Federal Reserve Bank of Philadelphia’s Manufacturing Business Outlook Survey . The top line general business activity index fell to 37.8 in September from 47.4 in August. New orders and shipments were essentially unchanged m/m, but the employment indexes declined, with the employee count index falling to 11.8 from 27.9 in the previous month, and the average workweek index dropping to 18 from 26.5. The forward-looking six-month expectations indexes were mixed but strong, with the general business activity index falling to 52.9 from 73.6, while employment expectations indexes moved higher. The capex six-month expectations index fell modestly in September to 37.1 from 48.2. Finally, 68% of respondents estimated that their total production increased in 3Q2026 compared to 2Q2026.

Here’s an article from West Virginia Watch via News From The States that requires a couple of readings in order to follow the logic. According to the article, the director of the West Virginia Office of Energy told state lawmakers on Tuesday, that the development of data centers will actually improve the state’s water quality issues, telling Delegates that “the whole issue on water has been mischaracterized”. The idea here seems to be that data centers will generate revenue that can be used to pay for water infrastructure projects. Not surprisingly, this appears to have been met with a certain level of skepticism.

Conditions in the New York-Northern New Jersey service sector appear to have weakened in September according to the results of the Federal Reserve Bank of New York’s Business Leaders Survey . After being briefly above zero during the summer, the top line business activity index returned to negative territory, dropping to -8.7 in September from +0.5 in August. Similarly, the business climate index declined 10.2 points m/m to a pessimistic -35.9. It should be noted that the business climate index hasn’t been in positive territory since 2021. Employee count also shifted from positive to negative, falling 7.3 points to -4.9 in September, while wages held steady. The six-month forward expectations indices all moved lower m/m, with the forward-looking business activity index falling 4.3 points to +5.0, and the business climate expectations index moving 2.5 points lower to -19.0. The forward-looking employment and capex indexes also declined m/m but remained in positive territory. However, t...

Senators Tim Kaine and Mark Warner have introduced a bill to reduce traffic at Washington National Airport (DCA) in order to improve safety. The bill would cap arrivals to no more than 28 in a 60 minute period, establish limits to reduce flight clustering, and eliminate 30 flight slots over five years. The proposed legislation is in response to the mid-air collision near DCA last year that killed 67 people. You can find a link to the press release from Senator Kaine’s office here . 

The employment situation in New Mexico isn’t expected to improve anytime soon, according to the new Consensus Estimate from the state’s Consensus Revenue Estimating Group. The forecast calls for annual growth in state nonfarm payrolls of less than 1% through the forecast period (FY31), with employment growth of 0.1% estimated for FY26 compared to 1.2% in the previous forecast (December 2025). The new August forecast attributes this reduction, in part, to cuts in the federal workforce instituted over the past year. However, the out years don’t look much better, with payroll growth of 0.6% projected for FY27 and 0.2% for FY28. Real state GDP growth of 1.9% is forecast for FY26, 1,5% for FY27, and 1.3% for FY28.