Vermont’s economic performance continued to improve nicely in 2018. This article will review key economic performance indicators, including employment, wages, house prices and total income. In all cases, Vermont will be compared to both the USA as a whole and New England.
Other than poverty rates, all of the data in this article is derived from the Federal Reserve Bank of Boston’s Monthly Economic Update/ State of Vermont and the Vermont Department of Labor Economic and Labor Market Data as of the second quarter, 2018.
Vermont’s unemployment rate continued to fall in 2018, to 2.8%. This rate is significantly below the US average of 3.7% and suggests strongly that Vermont has a very tight labor market.
Paradoxically, while the unemployment rate hit multi-year lows, total non-farm employment in Vermont actually shrank a little bit. Vermont’s shrinking and aging population is resulting in a smaller total workforce. A shrinking workforce makes Vermont somewhat unique. In both the US as a whole and New England, total non-farm employment grew in the 1.5% to 1.7% range over the same period.
A shrinking overall work force combined with very low unemployment rates means there is a very limited supply of labor in Vermont. Should these conditions continue, the low availability of labor could become a drag on Vermont’s future economic performance.
Not surprisingly, Vermont’s tight labor market has led to stronger wage growth in 2018. As of June 2018, average wages were up 4.1% from a year ago, to $46,186. While this is a very welcome development, Vermont continues to lag the rest of the country. Average wage growth in the USA was 4.9%. Vermont remains very much in line with the New England states, where average wage growth was 4.2%.
Total Personal Income
Total Personal Income is the sum of all wages, compensation, interest, dividends, rents and net transfer payments received by the residents of Vermont. As of June 2018, Vermont’s Total Personal Income was approximately $33.5 billion, up 3.1% over the same period a year ago.
The reduction in total non-farm employment noted above has a negative impact on Vermont’s Total Personal Income (there are simply less people making a wage). While Vermont’s Total Personal Income grew at 3.1%, the country as a whole and New England grew at 4.6% and 4.2%, respectively.
2018 is looking to be a very good year for Vermont homeowners. Vermont’s average house price index (which is based on actual transactions) was up 4.8% over the 12-month period. After a long period of stagflation, this is a very welcome development for Vermonters.
Unfortunately, owning a home in another state would have been even better. The average house price indices for the USA and New England were up 6.6% and 5.2%, respectively.
The number of people living in poverty remains stubbornly high in Vermont at 11.3%. Vermont’s poverty rate remains below the US average of 12.3%, but is the second highest within New England (Rhode Island at 11.6% is the highest and New Hampshire at 7.7% is the lowest). The average poverty rate for the New England states is 10.3%.
The table below summarizes the key economic performance information discussed above.
Vermont’s Key Economic Performance Indicators as of June 30, 2018
|Unemployment Rate||2.8%||3.7%||3.6%||Federal Reserve Bank Boston|
|Growth in Non-Farm Employment||(0.9%)||1.7%||1.5%||Federal Reserve Bank Boston|
|Average Wage Growth||4.1%||4.9%||4.2%||Federal Reserve Bank Boston/Vt. Dept. Labor|
|Growth in Total Personal Income||3.1%||4.6%||42%||Federal Reserve Bank Boston|
|Growth in House Price Index||4.8%||6.6%||5.2%||Federal Reserve Bank Boston|
|Persons in Poverty||11.3%||12.3%||10.3%||US Census Bureau|
The current economic performance in Vermont is stronger than it has been since the Great Recession of 2008/2009. While Vermont is clearly lagging much of the country in terms of growth rates, the results in Vermont are positive, accelerating and very welcome.
In the next several articles, The Informed Vermonter will take a much more detailed look at economic conditions in Vermont both before and after the Great Recession of 2008/2009, with a particular focus on housing and wages.
Before moving on, here are some selected key facts & figures about Vermont that readers may find interesting:
|-Number State Employees||8,237||8,432||8,396|
|-State Owned Land (Acres)||1,741||1,697||1,732|
|LAW & ORDER|
|-Number State Agency Law Enforcement Officials||374||395||na|
|-Number Sherriff Dept. Officials||131||137||na|
|-State Police Vehicles||528||496||516|
|-Total Corrections Population||9,809||9,692||9,809|
|-Paving Projects (miles)||220||203||na|
|-Gallons Maple Syrup Produced||1,990,000||1,980,000||1,940,000|
|-Ski Visits to Vermont||3,200,000||3,900,000||4,000,000|
Source: Vermont Fiscal Year 2018 Comprehensive Annual Financial Report
- Key Facts & Figures: 2017 Update: https://theinformedvermonter.com/key-facts-figures-2017-update/
- Vermont’s Personal Income Profile:https://theinformedvermonter.com/key-facts-figures-vermonts-personal-income-profile/