Nebraska’s economy has improved in recent months, following the initial shock of the 2020 pandemic and associated lockdowns, said the Federal Reserve Bank of Kansas City in a report Wednesday.
Unemployment edged lower, and consumer spending appeared to rebound somewhat, but economic disparities persisted in Nebraska over time, the Bank said.
The pandemic likely exacerbated some of those disparities more recently as its effects have been most pronounced on low-wage jobs concentrated in the services sector, the report said. Addressing these economic disparities may remain a significant challenge for the state in the years ahead.
UNEMPLOYMENT LOW, CLUMPED IN CITIES
Prior to the pandemic, Nebraska had one of the lowest unemployment rates in the country, the Bank said. From late 2014 to early 2020, Nebraska’s unemployment never exceeded 3.1%. Despite a significant increase in job losses early in the pandemic similar to other states, Nebraska’s unemployment rate remained among the lowest in the nation.
Following the Great Recession of 2007-09, household income in Nebraska advanced at a pace slightly faster than the nation, the report said. From 2010 to 2019, median household income increased 28% in Nebraska versus 18% in the US overall.
In 2018, half of Nebraska households earned an income greater than $73,000, up from less than $55,000 in the late 1990s when adjusted for inflation, the Bank said.
Despite broad economic progress since the recession, there still were significant economic disparities well before the onset of the 2020 pandemic, the report said.
When assessing labor markets at a local level based on neighborhoods, large portions of the state had unemployment rates less than 3%, the Bank said. In fact, unemployment was less than 3% in more than half of these groups during the five-year period ending in 2018.
However, that assessment also reveals a number of areas where unemployment rates were greater than 8%, a rate even higher than the months of peak unemployment during the 2020 pandemic, the report said. Disparities in local unemployment rates were especially pronounced in the state’s largest metropolitan areas of Omaha and Lincoln.
The prevalence of high unemployment neighborhoods in Nebraska has been less than other parts of the nation, but still notable, the Bank said. Through 2018, 12.5% of neighborhoods in the state had an unemployment rate in excess of 8%.
Nationally, more than 25% of neighborhoods had an unemployment rate higher than 8%, the report said, underscoring the overarching environment of low unemployment in Nebraska despite the variation.
Similar to regional employment disparities, household incomes also varied significantly throughout the state, the Bank said. Incomes in Omaha and Lincoln were significantly higher than those in rural areas.
However, significant disparities have remained even in Omaha and Lincoln, the report said. In eastern Douglas County, for example, household incomes were less than $60,000 a year in most neighborhoods, in contrast to a large number of neighborhoods in West Omaha with incomes greater than $100,000
CATTLE, BEEF RECAP
Fed cattle trading this week was seen at $107 per cwt on a live basis, up $2 to $3 from last week. Dressed-basis trading was seen at $167 per cwt, up $3.
The USDA choice cutout Wednesday was up $0.58 per cwt at $217.74, while select was up $0.55 at $207.54. The choice/select spread widened to $10.20 from $10.17 with 119 loads of fabricated product and 37 loads of trimmings and grinds sold into the spot market.
The CME Feeder Cattle Index for the seven days ended Tuesday was $142.58 per cwt, up $0.22. This compares with Wednesday’s Oct contract settlement of $141.35 per cwt, down $1.57.