Weekly Economic Trends and Indicators

Last week, we looked at the year-in-review from the national perspective. This week, the focus is on the Quad Cities economy. While the national economy had an excellent year, the Quad Cities economy struggled with job losses in the first half of the year. However, the second half of the year saw an improvement. The strong national economy and lower interest rates compared to the last 12 to 18 months are starting to give a boost to the local labor market.

As we have discussed over the last several months, the concentration of manufacturing in the Quad Cities means that we are more sensitive to economic factors that cause manufacturing expand or contract more than other sectors. After a negative shock from COVID-19, manufacturing rebounded strongly. Low interest rates and economic stimulus boosted manufacturing jobs in the Quad Cities to the highest level in over 10 years by the end of 2022. As interest rates rose in 2023, and throughout 2024, manufacturing came down from that peak. Part of the reason was simply mean reversion—the post-COVID expansion boosted jobs higher than was sustainable. However, there was also weakness in specific sectors that led to more job losses than expected.

In the second half of 2024, the labor market showed signs of turning around. The seasonally adjusted 3-month average nonfarm payroll employment growth for the metro area is now on the positive side, up 0.3% in November. Because this statistic is a moving average, it is a better indicator of the trend than simply looking at the monthly numbers. The growth rate by this measure is now at the highest level since early 2023. After the declines of the first half of 2024, this is a very positive note on which to end the year.

As we reported earlier in the year, housing appreciation in the Quad Cities continued at a good pace. That pace continued into the second half of the year with about 3.7% appreciation over the 12-months ending in October, slightly above the U.S. average according to the National Association of Realtors.

Even with above average home price appreciation, the inflation picture was also very positive for 2024. In the Midwest, the Consumer Price Index (CPI) rose at a rate of 2.6% for the 12-months ending in November. Lower prices for energy and consumer goods offset the housing gains.

If the current trends continue at the national level, it should provide good support for the Quad Cities economy. Strong productivity growth and lower interest rates are most critical to support the region’s continued expansion in 2025.

Next week: Inflation update