Some Good News For A Change

General Mills will be expanding its existing Albuquerque plant early next year. The $100 million addition will manufacture snack products. The current plant manufactures breakfast cereals.

When complete, the new facility will employ an additional 60 people. That isn't much in the grand scheme of things but the $100 million construction budget will be very welcome to a construction industry that has fallen on hard times lately.

Another Casualty of the Credit Crisis...

...and this one hurts.

Eclipse Aviation Corporation, the first company to successfully navigate the technological maze and create a very light passenger jet, told its workers today that it could not pay checks for the period just ended on November 12th.

Eclipse has been seeking a loan of between $200-300 million. Not surprisingly, it has been unable to raise the funds.

New Mexico Unemployment - September Data

Normally I give a synopsis of the data but this month the Employment News Release (of 10/23/08) appears to not believe the figures -- so I will quote instead:

New Mexico's seasonally adjusted enemployment rate was 4.0% in September 2008, down from 4.6% in August but up from 3.4% a year ago. The national rate was 6.1%. The state's unemployment rate drop in September likely resulted from a statistical sampling anomaly.

The New Mexico economy is weak but the national economy appears to be even weaker. New Mexico employment sectors with the closest ties to the national economy are among those that are underperforming.

Albuquerque's economy, being connected to the national economy through several large national employers, has started to lose jobs.

Not good news, to put it mildly.

When Bad News Is Good

The foreclosure rate in Albuquerque rose to .9% in August... up from .5% in the same month of 2007. Once again, however, the national figure makes us look like the Belle of the Ball. The August rate for the nation was 4.4%.

Leave Us Alone -- Please!

A long-running joke in this state is that many people (including some post offices around the country!) seem to think we are actually a part of Mexico. The latest unemployment figures for the state and Albuquerque/Rio Rancho make that look like a good idea.

We are still in far better shape than most. But, the economic sectors of our economy most closely tied to the national economy are the ones that are doing the worst. Manufacturing, financial and professional/business services are all underperforming.

• The state's unemployment rate in August was 4.6% -- up from 3.4% last year.
• Job growth stands at .06% -- an increase of 4,700 jobs from a year ago.

• Albuquerque/Rio Rancho's unemployment rate was 4.7% -- up from 3.4% last year.
• Over the year, employment has declined .2% -- a loss of 600 jobs. That is the first net loss we have suffered since 2002. Some of the winners and losers:
  
• Construction lost 800 jobs.
• Professional & business services lost 800 jobs.
• Leisure and hospitality lost 400 jobs.
  
• Government services added 1,200 jobs.
• Education and health services added 1,100.
• Information (where movie jobs are slotted) added 400 jobs.
  

Heading for the Basement

The door slammed - hard - on home construction in the Albuquerque/Rio Rancho area in August.

• A mere 76 permits were pulled in the metro market. That contrasts sharply with August of '07 when 272 permits were obtained.
• The drop from July of '08 was just as dramatic... 196 permits were pulled last month.
  

Congratulations - Part II...

How do you like owning the financial sector of the United States? Before you get too cheerful about that, remember you are going to pay a lot for something that is worth very little....

How much? Current 'worst case' scenarios are up to a trillion dollars. But, I think we have already reached that figure and then some. Fannie and Freddie guarantee more than $5 trillion and we own them. And now, of course, we are guaranteeing up to another $700 billion.

Where will you and I get the money. Print it, of course. And the last time I checked that was called inflation: Big time.

Congratulations...!!

...you (and I and every other person in the U.S.) now own a very, very large chunk of Wall Street's financial sector:

• Bear Stearns (We guarantee $30 billion)
• IndyMac (FDIC insurance kicks in as bank fails)
• Fannie Mae and Freddie Mac (government takeover... no matter what the spin)
• AIG (same)

Cost to you and I and everyone else... depends on who is counting, of course, but if the tab is less than a couple of trillion(!) dollars I am going to be elated. And, very surprised....

Fannie and Freddie and You and I

Following the 'take over' of the two mortgage giants, rates have fallen off the table. All the Fed's previous rate cuts are now acting on mortgage rates. That was the intention when the cuts were announced, of course. Rates did not fall due to fears of ongoing instability in the credit markets. (Which of course did happen.)
Now that we have stepped in to bail out Fannie and Freddie, we may see lower rates for awhile. Hey -- why not? We (all of us taxpayers) will be paying for the carnage... we might as well get something out of it.

We'll see...

Forbes Magazine has been a consistent booster of Albuquerque and the latest comment from that direction is no exception. Job growth is projected to be 1.6% through 2012 (no mention of when that will start) and housing starts are going to be on the upswing by 2009.