Kingsport-Bristol, Johnson City sales tax collections plunge in Oct.


By DON FENLEY

Oct

Percentage change for year-over-year seasonally adjusted sales tax collections. Data source: MTSU Bureau of Economic Research Center. Click graphic for a larger version.

Tri-Cities retail sales tax collections continued a two-month plunge in October and crossed the line into negative territory.

According to a MTSU Business and Economic Research Center report, year-over-year collections in the Johnson City MSA were down 2.3%. The decline in Kingsport-Bristol was down 7.3%.

The remaining East Tennessee MSAs were positive on the when October’s collections were compared to the same month last year. Knoxville was up 1.9% and Morristown lead the region with a 3% increase.

Jackson and Cleveland joined the Tri-Cities as the only four MSAs in the state showing collection declines last month.

While Tri-Cities collections were out of step with most Tennessee MSAs they closely followed the Gallup Economic Confidence Index. That metric shows Americans’ confidence in the U.S. economy sank for the month of October amid the partial U.S. government shutdown and partisan bickering over the federal debt limit. For the entire month, Gallup’s Economic Confidence Index was down 16 points, the sharpest monthly drop since Gallup began tracking economic confidence daily in 2008. Confidence improved after leaders in Washington reached a deal to end the shutdown, but it has not yet recovered to pre-shutdown levels.

The index in October is the lowest for an entire month since it registered -38 in December 2011, as Americans’ confidence slowly recovered from the 2011 U.S. federal debt crisis and subsequent downgrading of the nation’s credit rating. Confidence is significantly worse than it was in May of this year, when it reached -7, its monthly peak.

The Economic Confidence Index began to decline in mid-September, as the fiscal negotiations and partisan brinkmanship intensified. It plummeted to -34 in the first week of October as the partial government shutdown began on Oct. 1, registering the sharpest weekly decline since Lehman Brothers collapsed in September 2008, and grew worse the following week. Confidence slowly inched up after the government shutdown ended on Oct. 17, finishing at -29 for the week ending Nov. 3, but has not yet recovered to mid-September levels.

Gallup’s Economic Confidence Index is based on two components: Americans’ assessments of current economic conditions in the United States and their perceptions of whether the economy is getting better or worse.  The full report on the index with charts and methodology can be found a by CLICKING HERE.

Tri-Cities collections began falling in September after hitting a 2013 high in August.

The September-October report reversed a three-month period when the three-county Johnson City MSA was outperformed by Kingsport-Bristol.  However, it was the first negative year-over-year for Johnson City since May. Both MSA’s were positive for five months and negative for five months when compared to collections for the same months in 2012.

Comments

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