Chris Chmura was quoted in a recent Richmond Times-Dispatch article by David Ress:

The Federal Reserve's Open Markets Committee did pretty much as expected yesterday, leaving its key interest rate target unchanged between zero and 0.25 percent and sticking to plans to purchase government bonds and asset-backed securities.

Analysts and economists liked what they saw when they parsed the Fed's statement for signs of where it thinks the economy is going. And that is up, if slowly, said Christine Chmura, president of the Richmond-based economic consulting firm Chmura Economics and Analytics.

She said the committee's statement that it is looking for gradual recovery, with prices remaining stable, echoes what many economists are saying these days.

Still, "It's good that we hear that," she said, especially from the powerful group that sets the nation's interest-rate policy.

"Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustained economic growth in a context of price stability," the Fed said in the statement issued yesterday afternoon after the committee's two-day meeting.

Jamie Cox, managing partner with Harris Financial Group, said the statement marked an important turn.

"We have been dealing with the threat of deflation," he said, referring to a spiral of falling prices and layoffs that feeds upon each other. "Today, the deflation scare is over."

Chmura said the statement likely means short-term interest rates will remain down, keeping consumer's borrowing costs low. And the committee's view that there's enough slack in the economy to keep inflation down was likely to keep a lid on mortgage rates by calming bond markets, she said.

This post was contributed by Meredith Walker, who writes about the online college directory. She welcomes your feedback at MeredithWalker1983 at gmail.com.

This is a question that economists the world over have been pondering ever since unemployment, foreclosures and bankruptcies reached all time highs in 2008 and 2009. With many people still out of work and businesses, even major ones, closing left and right, it’s hard for some to see the light at the end of the tunnel. 

Yet most don’t see a particularly dark future ahead for the global economy. In a poll by CNN of 21 delegates at the World Economic Forum, most believed the economy would recover next year, and some even believed things would settle down by the end of this year. CNBC correspondent Carmen Wong Ulrich believes that we’re more than halfway there. And the average person? While the vast majority see the economic crisis lasting well into this year and beyond, some are optimistic in stating they believe we’ve already hit bottom and are slowly moving towards improvement. 

Yet according to statistics, this is one of the longest economic recessions since the Great Depression, lasting almost 18 months with no definitive end in sight. Can the end really come as soon as this year? 

The vast majority of indicators seem to point to no, but things do appear to be improving, though incredibly slowly. Jobless claims are still in the 600,000 range and that doesn’t even begin to take into account those who are underemployed and not making a living wage at the jobs they do have. For a major change to occur, jobs not only need to stop being cut from businesses but new ones need to be created in significant numbers as well as people don’t spend when they don’t have jobs and consumer confidence is a big part of economic recovery. Unemployment has dropped in the past few months, but not by a significant amount. Still, it may be a start and somewhere to work from. 

Of course, for a real turnaround to be made, big changes need to happen in the housing and stock markets as well, where prices have been dismal in the past few months, with the stock market reaching epic lows in March. So far, neither of these is making any sustained or dramatic improvements, indicating that economic recovery may be further away than anticipated and more patience will be required to pull through these tough times. 

The second quarter 2009 edition of the Virginia Economic Trends features the expansion plans of the Robert Russa Moton Museum in Farmville, the site of a 1951 student walkout which was part of a string of events leading to the landmark Brown v. Board of Education Supreme Court decision. The museum is an anchor site of the Civil Rights in Education Heritage Trail in Southside Virginia. The expansion project and the expected increase in visitors to the museum will bring economic benefits to this area of the state in addition to the educational and cultural benefits.

The Southside region of Virginia has seen increased unemployment due to the recession and the Danville metropolitan area is a good example of this. The unemployment rate in Danville has been in double digits since October 2008. As of March 2009, the unemployment rate was 12.1%, below the peak of 12.9% reached in January. The national unemployment rate in March 2009 was 8.5%, its peak in the current recession to that point. Among Virginia’s metro areas, Danville had the highest unemployment rate in March followed by Blacksburg (9.1%) and Bristol (8.8%).

Chris Chmura was recently quoted in an article by Emily Dooley of the Richmond Times-Dispatch:

EMILY C. DOOLEY TIMES-DISPATCH STAFF WRITER

Published: June 9, 2009

The Richmond region has lost more jobs than any other metro area in the state, an economist said yesterday.

From when employment -- the number of jobs -- peaked in the Richmond area in August 2007 through March 2009, the region lost 26,000 jobs. The job losses included thousands resulting from the bankruptcies of Circuit City Stores Inc., LandAmerica Financial Group Inc., and Qimonda AG.

The Hampton Roads area's employment hit its highest mark in July 2007. Northern Virginia's peak came a year later. Both regions have lost 20,000 jobs since their employment peaked.

Despite the time differences, the numbers can be compared because they represent the duration and depth of the recession in a given area, said Christine Chmura, president and chief economist at the Richmond firm Chmura Economics & Analytics.

But there also is a bright side: The layoffs should not be so severe in the months to come.

"We're still declining . . . but the worst of it is behind us," Chmura said while presenting the Virginia Economic Forecast funded by the Thomas Jefferson Institute for Public Policy for the past 10 years.

Virginia also is doing better than the nation. From March 2008 to March 2009, Virginia employment fell by 2.4 percent. During that same period, employment fell by 3.5 percent nationwide, the report said.

Chmura said she expects the recession to end during the fourth quarter of this year or early in 2010.

The reason: The stock market is performing well; inventories of goods are declining, indicating that demand will renew a need for supply; federal stimulus money will begin or already has filtered into the public; and consumer confidence is rising.

"The fastest rate of decline is behind us," Chmura said.

Read the rest of the article here.

The Thomas Jefferson Institute for Public Policy published the following new release announcing their 10th annual Virginia Economic Forecast, which was written by Chmura Economics & Analytics.

Dr. Christine Chmura, one of the state's top private economists, said today that Virginia is doing better economically than the country overall during this current recession.  In the 10th annual Virginia Economic Forecast, published by the Thomas Jefferson Institute for Public Policy and released Monday morning at the Virginia Chamber of Commerce office in Richmond, Dr. Chmura projects the recession continuing through this year before a slow recovery begin the second half of 2010.

Employment has declined 2.6% since its peak in December 2008.  This compares favorably to the national employment decline of 3.7%.  Virginia home prices fell 1.2% in 2008 over 2007 while dramatically falling 4.6% in the 4th quarter of 2008 - the largest quarterly decline since tracking of home prices began in 1976.

Chmura forecasts a 1.6% decline in employment in Virginia for 2009 and expects employment increases to begin in the second half of 2010.  Housing permits will decline 18.8% in 2009, after falling 33.9% in 2008.  Housing permits will grow by 5.5% in 2010.

Each year this Jefferson Institute's Annual Economic Forecast highlights a current public policy issue and this year it focused on Climate Change. Chmura's report states that there continues to be debate within the scientific community on the extent and the causes of climate change.  This year's Economic Forecast discusses the economic impact of proposed actions to confront climate change - those that make economic sense and those that do not.  Dr. Chmura served on the Governor's Climate Change Commission.

The Thomas Jefferson Institute is Virginia's premier non-partisan public policy foundation which refers to itself as a "solutions tank" since it seeks alternatives to current government programs and policies.

This forecast was also covered by the Richmond Times-Dispatch on June 8th:

Despite recent announcements of hundreds of layoffs at DuPont Co. and Reynolds Packaging Group, the worst of the job cuts appear to be over in Virginia, an economist said today.

"We're still declining . . . but the worst of it is behind us," said Christine Chmura, president and chief economist at the Richmond firm Chmura Economics & Analytics.

Chmura also said she expects the recession to end in Virginia during the fourth quarter of this year or early in 2010.

Her comments were part of an annual Virginia Economic Forecast that the Thomas Jefferson Institute for Public Policy has presented for the past decade.

The following article was originally published in the Richmond Times-Dispatch. It has also been featured on Bacon's Rebellion

Christine Chmura
June 2, 2009

The national recession continues to take its toll on the Richmond metropolitan area.

About 28,000 people in the region have lost their jobs since the area hit peak employment in August 2007.

With the area’s concentration of finance and insurance companies, it’s not surprising that the job loss in the Richmond area is larger than any of the other metro areas in the state.

Northern Virginia shed 18,000 jobs from its peak, Hampton Roads is down by 15,000, and the entire state is off by 94,000 from peak employment.

The current recession is turning out to be worse than the previous two in most regions across the state.

Northern Virginia is an exception, where employment declined only 1.6 percent through March 2009 from its peak employment in July 2008.

During the 1990 recession, which was partially driven by the overbuilding of office space and the downsizing of defense, Northern Virginia lost 4.4 percent of its jobs.

The Richmond area has already chalked up a greater percentage of losses compared with the last two recessions by looking at five economic indicators.

Employment in Richmond is down 4 percent — or 28,000 people — from its peak. The percent decline is the same as in the nation but much higher than the 2.6 percent drop in the state.

Employment in the finance, insurance and real estate industries alone declined 10 percent in the area during the past year.

Auto registrations, a proxy for auto sales, dropped by almost half since its peak early in 2005.

The mild 2001 recession saw an 18.9 percent contraction in auto registrations in the region. Without exception, auto sales in all 11 metro areas across the state have contracted more in the current recession than the last two.

The drop in retail sales, which translates into sales-tax revenue declines, provides some insight into why Gov. Timothy M. Kaine is considering more budget cuts.

With the recession expected to last six to nine more months, the current 7.1 percent drop in retail sales in Virginia from its peak in October 2007 is likely to surpass the 7.1 percent drop that occurred in the 1990 recession.

With Richmond employment decreasing more than in the state, it’s not surprising that sales have dropped further in the current recession than in either of the previous two.

Neither is it unexpected that residential building permits dropped more in the current recession than the previous two in every metro area in the state, because the recession started in the housing sector.

Richmond is no exception, with permits dropping 75 percent so far since the peak in early 2006.

The rising trend in initial unemployment claims provides a leading indicator of the labor market and affirms that the recession will continue as most economists expect. Claims so far in this recession are up 156.1 percent in the Richmond region.

Although every recession has unique drivers, they all result in layoffs and declines in sales.

As this recession begins to wind down over the next few months, the pace of the losses should decline. And barring unforeseen events, this column will be reporting about the recovery early in 2010.

Christine Chmura Christine Chmura is president and chief economist at Chmura Economics & Analytics. She can be reached at (804) 649-3640 or via the Chmura Economics website.

Carol Hazard of the Richmond Times-Dispatch writes:

Nine of Virginia's 10 metropolitan areas -- including Richmond -- experienced smaller unemployment lines in April from March, according to a report released yesterday by the Virginia Employment Commission.

Despite that drop, the rate is expected to increase this year statewide and nationally -- but not at the fast pace that it has in the past several months.

The unemployment rate in the Richmond area was 7.6 percent in April. That's down from 7.8 percent in March but still more than twice the 3.3 percent rate a year ago in April.

Virginia's unemployment rate was 6.6 percent in April, down from 6.9 percent in March but up from 3.2 percent in April 2008, according to the report. The U.S rate was 8.6 percent in April, down from 9 percent in March but up from 4.8 percent a year ago.

The numbers were not adjusted for seasonal fluctuations. The seasonally adjusted April rate in Virginia remained at the March level of 6.8 percent.

William E. Mezger, the employment commission's chief economist, said seasonal factors are the reason for the monthly fall in the unadjusted unemployment rate, attributing the improvement to hires in leisure and hospitality during the Easter holiday.

"The rate usually does fall in April," he said.

"We had a little bit of hiring activity in professional and business services in April, mostly in Northern Virginia," Mezger said. Most of the 1,800 added jobs in that sector were for accountants and computer programmers.

The April rate did not reflect any increases in construction, which is typical for this time of year. "We didn't get any pickup in construction," Mezger said. "That actually went down, and that is most unusual at this time of year."

He said the lower monthly rate is not a sign that unemployment could be subsiding. Rather, he said he expects jobless claims to rise in May and June as college and high school students look for work in a tight labor market.

Also, with General Motors and Chrysler suspending manufacturing operations, more layoffs are expected from automobile suppliers, Mezger said.

In the Richmond area, some Circuit City Stores Inc. and Qimonda employees were still on the payroll in March.

"They were gone by April," Mezger said.

Operations were shut down at both bankrupt companies. Circuit City, a consumer electronics retailer, was liquidated, closing its last stores in March.

Those job losses here were offset by an uptick in tourism activity, Mezger said.

Danville, with the highest unemployment rate in the state, was the only metro area with an increase in jobless claims, rising to 12.4 percent in April from 12.1 percent in March.

Mezger said the rise there was because of curtailed manufacturing, with unpaid work days taken during the Easter holiday.

"When we are in a recession, unemployment will continue to go up," said Christine Chmura of Chmura Economics & Analytics in Richmond. "Even after a recession ends, the unemployment rate will rise for a couple of months until firms see an increase in demand that is sustained."

She said she expects the recession to end in the first quarter of next year, although some economists are predicting the economy will grow again in the fourth quarter of this year.

Although the unemployment rate will move upward in Virginia and the U.S. this year, it will not move as fast as it has been, Chmura said. "But it will continue to inch higher."

A study performed by Chmura Economics & Analytics was featured in an article by Susan Elzey:

BY SUSAN ELZEY
SPECIAL TO THE REGISTER & BEE
Published: May 23, 2009

Although Clifton Glasscock, the general manager of Buffalo Wild Wings in Danville, knew that VIR benefitted his business, he said Friday he was a little surprised to learn just how much money VIR brings into the community.

An economic impact study by Chmura Economics & Analytics released Thursday reported that the financial impact of VIR on the surrounding region brought in $77.5 million annually, with $44.9 million coming from visitor spending, of which Danville gets 51 percent and Pittsylvania County gets 27 percent.

Halifax County, where VIR is located, gets the remaining 22 percent.

“We get a phenomenal amount of people in during the VIR events,” Glasscock said. “We have several race teams who come, and we get to overstaff a bit. You definitely mark your calendar for their events.”

He said that March is always the restaurant’s biggest month due to college basketball’s March Madness, but VIR’s Big Kahuna Race in mid-August has made August the second best month.

“Last year we went out, did advertising and had a wing-eating contest as well as sponsoring the Fan Party Night,” he said.

Ham’s General Manager Shaun Robertson also keeps track of the VIR calendar, knowing he will have to add extra staff.

“Race teams come in throughout the weekend to relax in our nice atmosphere after a hard day,” he said. “We greatly appreciate all they do and hope they continue to keep growing.”

Ham’s has been in Danville for 14 years now, and Robertson said he has seen the influence from VIR since it opened 10 years ago.

In fact, the proximity of VIR was one of the considerations when Buffalo Wild Wings selected Danville as a location three years ago.

“In our business, being sports-related, we do look at the sports markets,” Glasscock said. “We considered the Martinsville Speedway, VIR, Averett University and all the high schools in the area.”

Hotels, as well as restaurants, are recipients of the spending VIR visitors bring to the community.

Vickie Barber, general manager of Courtyard by Marriott in Danville, said that visitors to VIR bring in 3 percent of the hotel’s annual revenue.

She also puts VIR events on the calendar and knows she will need extra staff at those times.

“VIR is instrumental in bringing in business during the race weekends,” she said. “VIR is a good group, and we have always enjoyed a good working relationship with everyone there and the teams who come in.”

Niles Daly, president of Daly Seven Inc., which owns the Courtyard, said Friday that VIR helps round out their business on the weekend.

Laurie Moran, president of the Danville Pittsylvania County Chamber of Commerce, called VIR a “tremendous asset” to the region on Friday.

“It provides a huge economic benefit, as the recent study indicated,” she said. “The Chamber has fielded numerous inquiries in recent years from prospective businesses and persons wishing to relocate because they had come to VIR and fallen in love with the community. That’s a huge benefit to our region when we have businesses and people moving here as a result of the great experience they had at VIR.”

On May 23, 2009, Emily Dooley of the Richmond Time-Dispatch writes:

Virginia's jobless rate remained steady from March to April, but economists say it's too early to celebrate the end of the recession.

While the nation's seasonally adjusted unemployment rate rose 0.4 percentage points to 8.9 percent in April, Virginia's stayed at 6.8 percent, according to Bureau of Labor Statistics.

"Even though the unemployment rate was unchanged in Virginia, the underlying numbers show that the economy is still contracting," said Christine Chmura of Chmura Economics & Analytics in Richmond. "We still have 4,000 more people unemployed."

Layoffs continued in Virginia in April, but the labor force also grew to 4.17 million, up 189,000, according to BLS data.

The subtractions and additions equaled out.

"Basically you got some layoffs in April . . . but then had some people go to work," said William F. Mezger, chief economist for the Virginia Employment Commission.

"I don't think the recession is over by any means," he added.

Nationwide, 44 states, including Virginia, and the District of Columbia lost jobs in April. California was hit worst with 63,700 jobs lost.

As for the unemployment rate, 21 states saw decreases between March and April; 18 states saw increases. In 11 states, the rate did not change.

Michigan, with an unemployment rate of 12.9 percent, had the highest jobless rate in the nation. At 4 percent, North Dakota had the lowest rate, according to the BLS data.

Virginia has the 15th-lowest jobless rate, Mezger said.

"This is actually good news," said Jay Schwartz, president of the Henrico County-based staffing and searching firm Richmond Group USA.

Schwartz said it could mean the recession has ended or the stimulus money is taking effect. "You can't spend that much money and not have an impact," he said.

Mezger expects the unemployment rate to increase in May and June when high school and college students begin looking for work, along with the 284,000 other unemployed people in the state.

"At this point, it doesn't look like it's going to be a particularly good year for summer graduates and seasonal employment," he said.

Economists expect the recession to end either in the fourth quarter of this year or in the first three months of 2010. Even then, it will take awhile for unemployment rates to go down.

Businesses, until they are sure of a recovery, may opt for temporary workers. Schwartz said that's when calls for contract employees may increase.

"Employers don't want to hire people until they're convinced they'll have enough demand to keep that person on the payroll," Chmura said. "It's easier to pick up those people and let them go."

A study done by Chmura Economics & Analytics was mentioned in the Bluefield Daily Telegraph:

BLUEFIELD, Va. — Despite the national economic downturn, Tazewell County officials say they are still on target to advertise the first phase of the planned Bluestone Regional Business and Technology Park for construction this summer.

“We are hoping to bid it out late spring or early summer,” County Attorney Eric Young said. “Phase one would be the intersection with (Route) 460, the entrance to the park and water, sewer and roads to the business parcels. I believe broadband is already on the 460 corridor.”

Young said the national recession hasn’t slowed the project.

“Actually, I think the IDA (Industrial Development Authority) is optimistic that we will get better bids now than we would have a year ago,” Young said. “There is still interest in the park. We actually have one industry the IDA is looking at right now that is interested in taking baby steps.”

The Bluestone, which is being developed near Bluefield, Va., is a 680-acre mixed-use development that will include sites for new businesses and industry, a workforce training center, offices, a hotel and conference center, retail stores, residential units, walking trails and even a possible nine-hole golf course.

Young said the IDA has advertised and received proposals for interim financing for the construction of the park.

The county is still working to clear a number of environmental hurdles that have delayed the start of construction on the project by almost more than a year. Young said it his understanding that most of the environmental issues have been or are being resolved.

Target industries for the mixed use development include technology-based, advanced manufacturing and energy businesses.

A 2006 study by Chmura Economics & Analytics found the Bluestone project could generate $45 million in annual sales and output for the county and employ almost 900 people in both the public and private sectors.