State Economic Watch

This morning’s release of the December 2025 S&P Cotality Case-Shiller Indices confirms most of the house price data contained in the 4Q2025 FHFA House Price Index report. Nationally, the increase in home prices continues to decelerate, with the S&P Coality Case-Shiller National Home Price NSA Index increasing only 1.3% y/y in December, compared to the 1.4% increase posted in November. The National Index value hit its most recent peak in July 2025 and has been declining since then.  According to the press release, the increase in calendar year 2025 is the weakest since 2011. There continues to be a significantly wide dispersion in regional market data, with only New York, Chicago, Cleveland and Minneapolis posting any kind of meaningful y/y home price gains in December. The sun belt continues to be where most of the pain exists, as Tampa, Miami, Phoenix, and Dallas posted y/y declines of at least 1.5%. Denver and Portland also posted notable declines. On a m/m basis, almos...

Today’s release of the FHFA House Price Index (HPI) report for 4Q2025, indicates continued deceleration in home price appreciation nationally. The national Purchase-Only FHFA HPI (SA, nominal) increased 1.82% y/y in the quarter compared to 2.37% in 3Q2025 and 3.12% in 2Q2025. The quarterly y/y rate of growth in the index has been declining each quarter since its recent peak of 6.53% in 1Q2024 and its historic peak of 18.2% in 3Q2021. The strongest y/y growth in house prices in the quarter occurred principally in the upper Midwest, although parts of the Northeast also saw strong gains, with North Dakota, Delaware, Illinois, Wisconsin, and Michigan comprising the top five states. Nine states posted y/y declines in their respective HPI indexes. Florida saw the largest decline, followed by Montana, Colorado, West Virginia, and Idaho. The below exhibit is from the FHFA release.

A new study from the South Carolina Manufacturers and Commerce organization examines the impact of manufacturing on the state’s economy and the outlook for employment growth in the sector over the next six years. In the report entitled The Economic Impact of Manufacturing in South Carolina , the authors estimate that manufacturing contributes, directly and indirectly, approximately $300 billion to the South Carolina economy. Most of the report is backward looking and focuses principally on defining the state’s manufacturing profile. However, on page 32, the authors begin to discuss the future outlook for the state’s manufacturing sector and identify the 20 manufacturing jobs that they estimate will be in the greatest demand over the next six years. These high growth potential jobs cover a wide range, from mechanics to front line workers to engineers and inspectors. According to the study, employment in these 20 job types collectively is projected to increase 12.6% through 2032. Finall...

According to the latest release of the Business Leaders Survey from the Federal Reserve Bank of New York, the business environment for New York metro area services firms continues to deteriorate. In the new February 2026 survey, the top line business activity index fell ten points m/m to -25.7. The business climate index also fell markedly, decreasing 7 points to -41.7. Additionally, the employment, capex and supply availability indexes were all down moderately, while the wage index ticked higher. Despite all the present gloom, metro area service sector firms remained optimistic about the future, with the six-month forward business activity index increasing five points to +17.5. The employment and capex expectations indexes were essentially unchanged m/m, but remained in modestly positive territory. The below graphic from the press release illustrates the 20-year history of the business activity index.  Source: Federal Reserve Bank of New York

A fond farewell to the monthly state JOLTS report. This morning’s release from the US Bureau of Labor Statistics of December 2025 state JOLTS data is the last monthly report that will be issued. Going forward, the state JOLTS data will be released annually, with the first release scheduled for July 2026. That said, the newly released December figures show little movement in the state job markets. Job opening rates fell in six states led by Vermont, New Hampshire, New York and Rhode Island, but were unchanged in 44 states. Hires rates fell in three Northeastern states, New Hampshire, Maine, and Vermont. Nevada was the lone state to see an increase in the hire rate. Layoff and discharge rates were little changed nationwide, decreasing slightly in Idaho and New Jersey, but increasing in Michigan. The below graphic illustrates the range of job opening rates nationally in December. Source: US Bureau of Labor Statistics

As part of his State of the State address, Illinois Governor JB Pritzker is expected to propose a new statewide zoning law called Build Up Illinois Developments , which would limit the zoning control that local governments currently enjoy. The proposal would reduce restrictions on multi-unit housing in areas that are zoned residential, including allowing the construction of “granny flats”, backyard cottages, and above garage apartments. The proposal also includes $250 million in capital funding to support these new housing initiatives. The Governor’s proposal is designed to address the state’s housing shortage. A study by the University of Illinois concluded that the state would need to see 227,000 housing units constructed over the next five years to meet projected demand.