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Montgomery County Quarterly Economic Indicators July 2019
1
The purpose of this report is to keep policy makers apprised of changes in
the national and local economies that
the Montgomery County Department of Finance
believes may impact current and/or future revenues and expenditures.
This report is also available through the Internet
on the Montgomery County Web Page:
http://www.montgomerycountymd.gov
For questions regarding this report, please contact:
David Platt
Chief Economist
Montgomery County Department of Finance
101 Monroe Street, 15th Floor
Rockville, Maryland 20850
Phone: (240) 777-8866
Email: David.Platt@montgomerycountymd.gov
Montgomery County Quarterly Economic Indicators July 2019
2
INTRODUCTION
This quarterly report provides an analysis of national, state, regional, and
Montgomery County economic indicators for the second quarter of calendar year 2019, and
completed fiscal year 2019. For this report, data for the second quarter cover the April to
June period of the calendar year, and data for the fiscal year cover the July 2018 to June
2019 period. The data presented in this report are not seasonally adjusted to ensure
comparability among the national, state, regional and Montgomery County economic
indicators. Since the data are not seasonally adjusted, the comparative periods for the
quarterly data are the second quarter of this calendar year and the second quarter of
calendar year 2018. The only data that are seasonally adjusted are the national real gross
domestic product (GDP) and its components.
NATIONAL ECONOMY
According to the advance estimate by the Bureau of Economic Analysis (BEA), U.S.
Department of Commerce, real gross domestic product (GDP) increased at a 2.1 percent seasonally
adjusted annual rate during the second quarter of 2019. That increase followed an increase of 3.1
percent during the first quarter. The deceleration in the second quarter was attributed to downturns
in inventory investment, exports, and nonresidential fixed investment. These downturns were
partially offset by accelerations in consumer and federal government spending. Based on the Wall
Street Journal (WSJ) August survey of sixty economists, the average of the responses expects
economic growth to increase 2.0 percent during the current third quarter, and 1.9 percent during
the fourth quarter of this year. Based on the forecast for the next two quarters of 2019, the survey
of economists by The Wall Street Journal estimates that real GDP will increase 2.2-2.3 percent in
2019. The results of the survey also forecast an increase of 1.8 percent in 2020 and 1.6 percent in
2021. Following its June 2019 meeting, the Federal Open Market Committee (FOMC, Committee)
of the Board of Governors of the Federal Reserve System released its latest economic projections
from 2019 to 2021. Real GDP is expected to increase 2.1 percent in 2019, 2.0 percent in 2020,
and 1.8 percent in 2021.
Data released by BEA for the second quarter showed that the increase in real GDP was largely
attributed to an increase in personal consumption expenditures (↑4.3% - compared to an increase
of only 1.1% during the first quarter). Purchases of nondurable goods increased 6.0 percent and
purchases of durable goods were up 12.9 percent. Exports were down 5.2 percent and real non-
residential fixed investment decreased 0.6 percent which followed a 4.4 percent increase during
the first quarter. Federal spending was up 7.9 percent and state and local government spending
combined was up 3.2 percent However, residential real estate decreased during the second quarter
with residential fixed investment decreasing 1.5 percent which followed a decrease of 1.0 percent
in the first quarter and a decrease of 4.7 percent during the fourth quarter of 2018.
Montgomery County Quarterly Economic Indicators July 2019
3
Real final sales of domestic product (real GDP less the change in private inventories) increased
5.4 percent in the second quarter compared to an increase of 3.7 percent during the first quarter.
Real final sales are a good measure of future production. If the growth rate in real final sales
exceeds the growth rate for GDP over an extended period of time, it indicates a continued
expansion of the national economy. For the second quarter, the percent increase in real final sales
(5.4%) was above the percent increase in real GDP (2.1%) which suggests continued growth in
real GDP through the remainder of 2019.
Sales of existing homes decreased 2.4 percent during the second quarter compared to the
second quarter of 2018. Median home prices for existing homes increased 4.3 percent year-over-
year during the second quarter of 2019 compared to a 4.7 percent increase during the same period
in 2018. The inventory level increased 1.3 percent during the second quarter compared to the same
quarter in 2018. That increase is the fourth consecutive quarterly decrease in inventory levels.
However, the National Association of Realtors (NAR) forecast the sales of existing homes to
decrease 0,2 percent in 2019 but increase 4.5 percent 2020. The Mortgage Bankers Association
(MBA), on the other hand, forecast that sales of existing homes will increase 0.6 percent and 1.5
percent in 2019 and 2020, respectively.
Monthly national employment, as measured by the survey of establishments (Current
Employment Statistics), averaged 151.6 million (not seasonally adjusted) during the second
quarter of this year – an increase of nearly 2.4 million or 1.6 percent from the second quarter of
2017. Employment reached over 150.3 million in fiscal year 2019 – an increase of over 2.5 million
or 1.7 percent from fiscal year 2018.
1.5%
3.7%3.0%
2.0%
-1.0%
2.9%
-0.1%
4.7%
3.2%
1.7%0.5% 0.5%
3.6%
0.5%
3.2% 3.2%
-1.1%
5.5%5.0%
2.3%3.2% 3.0%
1.3%0.1%
2.0% 1.9% 2.2% 2.0% 2.3% 2.2%3.2% 3.5%
2.6%3.5%
2.9%
1.1%
3.1%2.1% 2.0% 1.9% 1.9% 1.7% 1.8% 1.6%
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%20
10:I
20
10:I
I
20
10:I
II
20
10:I
V
20
11:I
20
11:I
I
20
11:I
II
20
11:I
V
20
12:I
20
12:I
I
20
12:I
II
20
12:I
V
20
13:I
20
13:I
I
20
13:I
II
20
13:I
V
20
14:I
20
14:I
I
20
14:I
II
20
14:I
V
20
15:I
20
15:I
I
20
15:I
II
20
15:I
V
20
16:I
20
16:I
I
20
16:I
II
20
16:I
V
20
17:I
20
17:I
I
20
17:I
II
20
17:I
V
20
18:I
20
18:I
I
20
18:I
II
20
18:I
V
20
19:I
20
19:I
I
20
19.I
II (
est.)
20
19.I
V (
est.
)
20
20:I
(est.
)
20
20:I
I (est.)
20
20:I
II (
est.
)
20
20:I
V (
est.)
Pe
rce
nt C
ha
ng
e
Year:Quarter
Percent Change in Real GDP
SOURCE: Bureau of Economic Analysis, U.S. Department of Commerce. Hatched bars from Wall Street Journal survey conducted August 2019.
NOTE: Percent changes are at annual rates.
Montgomery County Quarterly Economic Indicators July 2019
4
The unemployment rate during the second quarter stood at 3.5 percent (not seasonally adjusted)
and was an improvement from the 3.8 percent in the second quarter of 2018. For fiscal year 2019,
the unemployment rate declined 0.3 percentage points from 4.1 percent in fiscal year 2018 to 3.8
percent in fiscal year 2019. The July WSJ survey expects the jobless rate to be at 3.7 percent by
December 2019 but increase to 3.9 percent by December 2020 and 4.0 percent by December 2021.
The economic projections by the FOMC in June suggest that the unemployment rate will be at 3.6
in 2019 but increase slightly to 3.8 percent by 2021.
Inflation, as measured by the personal consumption expenditure (PCE) index, the preferred
measure of inflation used by the FOMC, is expected to increase from 1.8 percent in 2019 to 1.9
130,203 131,005133,082
135,209137,565
140,447143,122
145,520147,769
150,310
120,000
125,000
130,000
135,000
140,000
145,000
150,000
155,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
No
nfa
rm E
mp
loym
en
t (i
n t
ho
usa
nd
s)
Fiscal Year
Total U.S. Nonfarm Employment(in thousands)
SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance
9.8% 9.3%8.5%
7.8%6.8%
5.7%5.0% 4.7% 4.1% 3.8%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Un
em
plo
yme
nt
Ra
te
Fiscal Year
U.S. Unemployment Rate
SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance
Montgomery County Quarterly Economic Indicators July 2019
5
percent in 2020. The July WSJ survey suggests that inflation, as measured by the consumer price
index (CPI), will decrease slightly from 2.03 percent in December 2019 to 1.99 percent by
December 2020.
Subsequent to the July 30 - 31 meeting of the FOMC, they stated that “information received
since the FOMC (Committee) meeting in June indicates that the labor market remains strong and
that economic activity has been rising at a moderate rate. Job gains have been solid, on average,
in recent months, and the unemployment rate has remained low. Although growth in household
spending has picked up from earlier this year, growth of business fixed investment has been soft.
On a 12-month basis, both overall inflation and inflation for items other than food and energy are
running below 2 percent. Market-based indicators measures of inflation compensation remain
low; survey-based measures of longer-term inflation expectations are little-changed.” Based on
the review of the outlook for the economic activity and the labor market, the Committee voted to
lower the target range for the federal funds to 2.00-2.25 percent.
Following its June meeting, the FOMC released its latest forecast of rate increases - the “dot
plot”. The median of responses indicated lowering the target federal funds rate from 2.4 percent
in 2019 to 2.1 percent in 2020, but increasing the target range to 2.4 percent in 2021 and 2.5 percent
thereafter.
After the July 30-31 meeting of the FOMC, the Chicago Mercantile Exchange’s implied
probability data, the next rate decrease would occur in September followed by another decrease in
December. The August WSJ survey projects on average that the federal funds rate will be 1.99
December 2019 and 1.85 percent by December 2020.
After experiencing strong performance during the first quarter of 2019 that followed a
correction during the fourth quarter of 2018, the returns in the stock market decelerated during the
second quarter. The Dow-Jones Industrial Average (DJIA) was up a modest 2.60 percent in the
second quarter compared to an increase of 11.2 percent in the first quarter; the Standard & Poor’s
500 (S&P 500) increased 3.8 percent compared to an increase of 13.1 percent increase in the first
0.00%0.25%0.50%0.75%1.00%1.25%1.50%1.75%2.00%2.25%2.50%2.75%3.00%3.25%3.50%3.75%4.00%
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Oct-15
Jan-16
Apr-16
Jul-16
Oct-16
Jan-17
Apr-17
Jul-17
Oct-17
Jan-18
Apr-18
Jul-18
Oct-18
Jan-19
Apr-19
Jul-19
Oct-19
Jan-20
Apr-20
Fed
Fu
nd
s R
ate
Date
Effective Federal Funds Rate (solid bars) and Federal Funds Futures (hatched bars)
SOURCES: Federal Reserve Bank of St. Louis (solid bars) and the
Chicago Mercantile Exchange (hatched bars) as of August 12, 2019
Montgomery County Quarterly Economic Indicators July 2019
6
quarter; the NASDAQ also continued to increase in the second quarter with an increase of 3.6
percent compared to an increase of 16.5 percent during the first quarter; and the Russell 2000
increased a modest 1.7 percent in the second quarter that followed an increase of 14.2 percent in
the first quarter. Overall, all four indices increased during the first half of 2019. Since the end of
the second quarter, all four indices experienced modest increases in July.
STATE AND REGIONAL ECONOMY
According to the latest data from BEA, real gross domestic product, or gross state product, for
Maryland increased 1.8 percent during the first quarter of this year compared to an increase of 1.2
percent during the fourth quarter of last year and an increase of 0.4 percent during the first quarter
of 2018. The increase was attributed to a 12.9 percent increase in retail trade, a 4.8 percent increase
in the information sector, an 8.5 percent increase in the finance and insurance industry, and a 6.6
percent increase in health care and social assistance.
According to payroll employment data from the Bureau of Labor Statistics (BLS), U.S.
Department of Labor and based on the survey of establishments, monthly payroll employment in
the State of Maryland averaged 2.775 million during the second quarter of 2019 – an increase of
0.5 percent from the second quarter of 2018. In fiscal year 2019, payroll employment in Maryland
reached nearly 2.752 million - an increase of 0.6 percent from fiscal year 2018.
-3.2%
3.7%3.2%
5.1%
3.8%3.9%
2.3%
5.9%
-2.0%
4.5%
0.8%
1.9%
0.7%
-3.8%
2.3%
-4.9%
5.0%
-2.8%
1.2%1.2%
-1.6%
5.8%
3.4%
-2.6%
3.5%
1.1%1.4%
2.5%3.1%
5.9%
2.1%
3.6%
-0.7%
2.9%
1.2%
2.8%
0.4%
3.7%
-0.9%
1.2%1.8%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
2009:Q1
2009:Q2
2009:Q3
2009:Q4
2010:Q1
2010:Q2
2010:Q3
2010:Q4
2011:Q1
2011:Q2
2011:Q3
2011:Q4
2012:Q1
2012:Q2
2012:Q3
2012:Q4
2013:Q1
2013:Q2
2013:Q3
2013:Q4
2014:Q1
2014:Q2
2014:Q3
2014:Q4
2015:Q1
2015:Q2
2015:Q3
2015:Q4
2016:Q1
2016:Q2
2016:Q3
2016:Q4
2017:Q1
2017:Q2
2017:Q3
2017:Q4
2018:Q1
2018:Q2
2018:Q3
2018:Q4
2019:Q1
Pe
rce
nt C
han
ge
Year: Quarter
Percent Change at Annual Rate in Quarterly Real Maryland Gross State Product
SOURCE: Bureau of Economic Analysis, U.S. Department of Commerce
Montgomery County Quarterly Economic Indicators July 2019
7
According to the labor force data, the State’s resident employment increased 1.2 percent from
3.075 million during the second quarter of 2018 to 3.112 million in the second quarter of this year.
The State’s unemployment rate decreased from 3.9 percent in the second quarter of 2018 to 3.6
percent in the second quarter of this year. On a fiscal year basis, employment increased 0.7 percent
and the unemployment rate declined from 4.2 percent in FY2018 to 3.8 percent in FY2019.
0.0
500.0
1,000.0
1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Em
plo
ym
en
t (t
ho
usa
nd
s)
Fiscal Year
Nonfarm Payroll Employment and Resident Employment (Labor Force)
State of Maryland
Payroll Resident
SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance
7.5% 7.4% 7.1% 6.9%6.2%
5.5%4.7% 4.4% 4.2% 3.8%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Ue
mp
loym
en
t R
ate
Fiscal Year
Unemployment Rate State of Maryland
SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance
Montgomery County Quarterly Economic Indicators July 2019
8
Monthly payroll employment for the Silver Spring-Frederick-Rockville (SSFR) metropolitan
division averaged 600,900 during the second quarter and was slightly above the average
employment level in the second quarter of 2018 (↑0.2%). However, that rate of growth was below
the second quarter growth rate for the State (↑0.5%). On a fiscal year basis, payroll employment
increased 0.3 percent over FY2018 to 596,400. Resident employment, as measured by the
household survey, averaged over 668,300 during the second quarter – an increase of 0.8 percent
over the second quarter of 2018. On a fiscal year basis, resident employment was over 665,300 in
FY2019 – an increase of 0.5 percent.
The unemployment rate for the division is either the lowest or one of the lowest among the 34
national metropolitan divisions and the monthly average was 3.0 percent during the second quarter
of 2019 – slightly below the rate during the second quarter of 2018 (3.3%). For fiscal year 2019,
the unemployment rate was 3.1 percent compared to 3.4 percent in fiscal year 2018. Both the
unemployment rates for the second quarter and the fiscal year were below the State’s
unemployment rates.
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Empl
oym
ent
Fiscal Year
NonFarm Employment and Resident Employment (Labor Force)
Silver Spring-Frederick-Rockville Metropolitan Division
Payroll Resident
SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance
SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance
5.9% 5.6% 5.4% 5.3%4.8%
4.3%3.7% 3.5% 3.4% 3.1%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Une
mpl
oym
ent R
ates
Fiscal Year
Unemployment Rates Silver Spring-Frederick-Rockville Metropolitan Division
SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance
Montgomery County Quarterly Economic Indicators July 2019
9
The resale housing market across the region experienced growth in prices, on a year-over-year
basis, between May 2018 and May of this calendar year. Based on the S&P/Case-Shiller® Home
Price Index for the Washington region, prices in May increased 2.9 percent over the twelve-month
period.
As measured by the Consumer Price Index for All Urban Consumers (CPI-U), inflation in the
Washington Metropolitan Statistical Area (MSA) increased an estimated 1.4 percent on a year-
over-year basis in June of this year over June 2018. On a fiscal year basis, the CPI-U increased
1.6 in FY2019. Consumer prices excluding food and energy purchases (Core CPI) were up 1.3
percent in the area (on the same year-over-year basis) and up 1.7 percent for the fiscal year.
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%
Jan-
05A
pr-0
5Ju
l-05
Oct
-05
Jan-
06A
pr-0
6Ju
l-06
Oct
-06
Jan-
07A
pr-0
7Ju
l-07
Oct
-07
Jan-
08A
pr-0
8Ju
l-08
Oct
-08
Jan-
09A
pr-0
9Ju
l-09
Oct
-09
Jan-
10A
pr-1
0Ju
l-10
Oct
-10
Jan-
11A
pr-1
1Ju
l-11
Oct
-11
Jan-
12A
pr-1
2Ju
l-12
Oct
-12
Jan-
13A
pr-1
3Ju
l-13
Oct
-13
Jan-
14A
pr-1
4Ju
l-14
Oct
-14
Jan-
15A
pr-1
5Ju
l-15
Oct
-15
Jan-
16A
pr-1
6Ju
l-16
Oct
-16
Jan-
17A
pr-1
7Ju
l-17
Oct
-17
Jan-
18A
pr-1
8Ju
l-18
Oct
-18
Jan-
19A
pr-1
9
Y-o
-Y P
ct. C
hg.
Month.Year
Year-over-Year Percent Change in
S&P/Case-Shiller® Home Price Index
Washington MSA
NOTE: S&P/Case-Shiller price index is a registered trademark of Standard and Poor's.
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
2,0
09.
01
2,0
09.
04
2,0
09.
07
2,0
09.
10
2,0
10.
01
2,0
10.
04
2,0
10.
07
2,0
10.
10
2,0
11.
01
2,0
11.
04
2,0
11.
07
2,0
11.
10
2,0
12.
01
2,0
12.
04
2,0
12.
07
2,0
12.
10
2,0
13.
01
2,0
13.
04
2,0
13.
07
2,0
13.
10
2,0
14.
01
2,0
14.
04
2,0
14.
07
2,0
14.
10
2,0
15.
01
2,0
15.
04
2,0
15.
07
2,0
15.
10
2,0
16.
01
2,0
16.
04
2,0
16.
07
2,0
16.
10
2,0
17.
01
2,0
17.
04
2,0
17.
07
2,0
17.
10
2,0
18.
01
2,0
18.
04
2,0
18.
07
2,0
18.
10
2,0
19.
01
2,0
19.
04
Y-o
-Y
Pct
. C
hg
.
Year-over-Year Percent Change in Consumer Price Index
Washington MSA
All Items
SOURCE: Bureau of Labor Statistics, U.S. Department of Labor
Montgomery County Quarterly Economic Indicators July 2019
10
According to the Stephen S. Fuller Institute (Institute) in its July report, “the Washington
region’s Coincident and Leading Indices were both positive in May building on gains in April.
The Coincident Index registered strong gain in May, its 62nd consecutive monthly over-the-year
increase, and the Leading Index was up slightly in April extending its positive trend to a second
month in contrast with its negative trend dating bank to July 2018. As in April, all of the
Coincident Index’s four components and three of the Leading Index’s components contributed to
this overall positive performance. Still, the Leading Index’s weak but positive performance in
May continues to leave open the question regarding the economy’s future performance.”
The Washington Coincident Index, which represents the current state of the metropolitan area
economy, increased 1.23 percent from April to May and all four components of the index increased
on a month-over-year basis. On the month-over-year basis, May’s Coincident Index increased
2.21 percent from May 2018. Total wage and salary employment, domestic airport passenger
volume, purchases of nondurable goods, and consumer confidence all increased on a month-over-
year basis.
According to the Institute, “the Washington Leading Index, which is designed to forecast the
performance of the metropolitan area economy six to eight months in advance, increased by 0.25
percent in May on a monthly over-the-year basis registering its second consecutive gain and only
the third increase since June 2018.” Three of the Leading Index’s four components contributed
to the increase: consumer expectations, total residential building permits, and durable goods
retail sales.
80.0
85.0
90.0
95.0
100.0
105.0
110.0
115.0
Jan-0
1
Jul-01
Jan-0
2
Jul-02
Jan-0
3
Jul-03
Jan-0
4
Jul-04
Jan-0
5
Jul-05
Jan-0
6
Jul-06
Jan-0
7
Jul-07
Jan-0
8
Jul-08
Jan-0
9
Jul-09
Jan-1
0
Jul-10
Jan-1
1
Jul-11
Jan-1
2
Jul-12
Jan-1
3
Jul-13
Jan-1
4
Jul-14
Jan-1
5
Jul-15
Jan-1
6
Jul-16
Jan-1
7
Jul-17
Jan-1
8
Jul-18
Jan-1
9
Ind
ex
Month-Year
Washington MSA Monthly Coincident Economic Indicator and Six-Month Moving Average
Coincident Six_Month
SOURCE: Center for Regional Analysis(CRA), George Mason UniversityNOTE: Coincident indicator respresents the current state of the economy and includes
total w age and salary employment, consumer confidence, domestic airport passengers, and purchases of nondurable goods.
Montgomery County Quarterly Economic Indicators July 2019
11
MONTGOMERY COUNTY
ECONOMIC INDICATORS
Montgomery County’s economy experienced a mixed economic performance during fiscal
year 2019. The reasons for a mixed performance include an increase in resident employment, a
decrease in the unemployment rate, a decrease in existing home sales, and an increase in median
prices for an existing home. Residential construction experienced a decrease in single-family
homes but an increase in multi-family units. Construction in the number of non-residential projects
decreased but the value of added non-residential projects increased.
Employment Situation
Based on data from the Maryland Department of Labor, Licensing and Regulation (DLLR),
the Bureau of Labor Statistics, U.S. Department of Labor, the County’s resident employment for
the second quarter increased by nearly 4,500 from the second quarter of 2018 (↑0.8%). On a fiscal
year basis, resident employment was 539,000 in fiscal year 2019 compared to 536,000 during the
previous fiscal year – an increase of slightly more than 3,000 or 0.6 percent.
85.0
90.0
95.0
100.0
105.0
110.0
Jan-0
1
Jul-01
Jan-0
2
Jul-02
Jan-0
3
Jul-03
Jan-0
4
Jul-04
Jan-0
5
Jul-05
Jan-0
6
Jul-06
Jan-0
7
Jul-07
Jan-0
8
Jul-08
Jan-0
9
Jul-09
Jan-1
0
Jul-10
Jan-1
1
Jul-11
Jan-1
2
Jul-12
Jan-1
3
Jul-13
Jan-1
4
Jul-14
Jan-1
5
Jul-15
Jan-1
6
Jul-16
Jan-1
7
Jul-17
Jan-1
8
Jul-18
Jan-1
9
Ind
ex
Month-Year
Washington MSA Monthly Leading Economic Indicator
and Six-Month Moving Average
Leading Six_Month
SOURCE: Center for Regional Analysis(CRA), George Mason UniversityNOTE: Leading indicator is designed to forecast economic performance six to eight months in
advance and includes residential building permits, consumer expectations, help w anted index, initial claims for unemployment insurance, and purchases of durable goods.
Montgomery County Quarterly Economic Indicators July 2019
12
The County’s average monthly unemployment rate during the second quarter was 3.0 percent
and below the rate during the second quarter of 2018 (3.2%). In fiscal year 2019, the
unemployment rate was 3.1 percent compared to fiscal year 2018 (3.3%). Throughout fiscal year
2019, the County’s unemployment rate remained one of the lowest in the State.
496,983
506,690509,931
514,958517,901
523,404 525,234529,997
535,799538,818
470,000
480,000
490,000
500,000
510,000
520,000
530,000
540,000
550,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Em
plo
ymen
t
Fiscal Year
Resident Employment (Labor Force) Montgomery County
SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance
5.7% 5.4% 5.2% 5.1%4.6%
4.2%3.6% 3.4% 3.3% 3.1%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Un
em
plo
ym
en
t R
ate
s
Fiscal Year
Unemployment Rates Montgomery County
SOURCES: Bureau of Labor Statistics, U.S. Department of LaborMontgomery County Department of Finance
Montgomery County Quarterly Economic Indicators July 2019
13
Construction Activity
Construction of single-family residential units decreased during the second quarter of 2019
compared to the second quarter of 2018. Construction of single-family homes declined 5.0 percent
but construction of multi-family units increased 15.9 percent. Overall with the increase in multi-
family units that offset the decrease in single-family units, total construction of residential units
increased 13.6 percent in the second quarter over the second quarter of 2018. Residential
construction starts added a total value of $326.3 million during the second quarter compared to
$358.1 million during the second quarter of last year (↓8.9%). On a fiscal year basis, the number
of new residential construction starts increased 21.3 percent in fiscal year 2019 largely attributed
to the increase in multi-family units (↑77.5%) and the total value added was $1,025 million which
was 25.5 percent above FY2018 and largely attributed to the total value added by multi-family
homes (↑49.6%).
During the second quarter of 2019, the number of non-residential starts (projects) increased
nearly 15.4 percent from the second quarter of 2018. The total value increased from $343.6 million
to $446.4 million (↑29.9%). On a fiscal year basis, the number of non-residential projects
decreased 4.2 percent but the total added value increased from $1,137.9 million to $1,535.7 million
from fiscal year 2018 to fiscal year 2019 – an increase of 35.0 percent.
1,056
2,2752,825
3,9954,553
4,9415,230
4,394 4,475
5,429
$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
$1,200,000,000
0
1,000
2,000
3,000
4,000
5,000
6,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Valu
e (
$000)
Un
its
Fiscal Year
New Residential Construction Starts: Units and Value (Montgomery County)
Units Value
SOURCES: McGraw-Hill ConstructionMontgomery County Department of Finance
Montgomery County Quarterly Economic Indicators July 2019
14
Residential Real Estate
During the second quarter of this calendar year, existing home sales decreased 3.6 percent on
a year-over-year basis following a decrease of 0.4 percent during the second quarter of 2018.
However, median sales prices for existing homes increased a modest 1.6 percent during the second
quarter 2018 following an increase of 5.8 percent during the second quarter of 2018. On a fiscal
year basis, sales of existing homes decreased 7.1 percent but median prices increased 2.9 percent.
Retail Sales
Using sales tax receipts as a measure of retail sales activity in the County, retail sales increased
1.8 percent in fiscal year 2019. In FY2019, purchases of nondurable goods, which include food
and beverage, apparel, general merchandise, and utilities and transportation, increased 0.4 percent
during this period and sales of durable goods were up 3.6 percent. The increase in nondurable
goods purchases was largely attributed to the increase in purchases of apparel items (↑8.8%), while
the increase in purchases of durable goods was largely attributed to an increase in automotive
(↑7.2%), building and industrial supplies (↑3.6%), and furniture and appliances (↑1.2%).
CONCLUSION
11,0809,457 9,206
10,255 10,817 11,15012,315 12,644 12,227
11,359
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017 FY2018 FY2019
Sale
s
Fiscal Year
Sales of Existing Homes
Montgomery County
SOURCES: Metropolitan Regional Information System, Inc.
Montgomery County Department of Finance
$402,752$416,843
$436,289 $431,411 $435,303$453,520 $457,864
$468,996$461,387
$469,917
$300,000
$320,000
$340,000
$360,000
$380,000
$400,000
$420,000
$440,000
$460,000
$480,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Sale
s Ta
x Re
ceip
ts ('
000$
)
Fiscal Year
Total Sales Tax Receipts Montgomery County
SOURCES: Maryland State ComptrollerMontgomery County Department of Finance
Montgomery County Quarterly Economic Indicators July 2019
15
The major economic indicators confirm that the County’s economy experienced mixed
economic performance during fiscal year 2019. Employment measured by the survey of
households increased 0.6 percent, and the unemployment rate at 3.1 percent was a decrease from
fiscal year 2018. Residential construction increased for multi-family homes but decreased for
single-family homes. Sales of existing homes declined 7.1 percent but median prices were up 2.9
percent during the fiscal year compared to last fiscal year.
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