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National, State and Regional Economy
The national economy continues to recover slowly. In the fourth quarter of calendar year 2010, the gross national product increased by an estimated 2.8 percent over fourth quarter 2009. This was the sixth consecutive quarter of positive GDP growth. On an annual basis, the GDP grew by 2.8 percent from 2009 to 2010. U.S. unemployment decreased in January for the second consecutive quarter, from 9.4 percent in December to 9.0 percent.
The national consumer price index for January is up 1.6 percent from the previous year, a slight increase from 1.5 percent in December, but the recent Federal Reserve bond buyback program, rising commodities prices, and political upheaval in the Middle East have increased concerns about the potential for inflation. In his recent twice-annual monetary policy report to Congress, Fed Chairman Ben S. Bernanke was cautiously optimistic about the national economic outlook and asserted that the Fed will monitor for and be prepared to respond to inflation.
The recent events in the Middle East have affected fuel prices. As of March 2nd, the national average price of $3.38 per gallon for regular gasoline is 19 cents higher than last week, 29 cents higher than last month, and 68 cents higher than last year. Consumer spending is thought to be affected when prices reach approximately $3.50 per gallon. It is unknown whether the jump in prices will be a short-term result of temporary uncertainty or will be sustained if oil supplies eventually become significantly affected.
Housing and commercial construction continue to lag behind other segments of the economy. January construction spending was 5.9 percent below the previous year and 0.7 percent below the December estimate. The decrease from January 2009 reflects a 10.5 percent decrease in private construction partially offset by a 2.9 percent increase in public construction. Private construction represents 61.9 percent of total construction in January 2011, down from 65.1 percent in January 2010.
Alexandria's Economy and Revenues
The City’s local economy largely reflects national trends. Unemployment decreased from 4.6 percent in November to 4.4 percent in December . The local unemployment rate was 4.6 percent in December 2009 and reached a calendar year 2010 high of 5.4 percent last January and February.
The consumer price index for both the Washington, D.C. metropolitan area and the national average grew slightly in January. The regional CPI increased 2.3 percent over the previous year as compared to 2.1 in December 2010, while the national CPI grew by 1.6 percent as compared to 1.5 percent in December.
Local construction activity coincides with national data, indicating that spending on non-residential construction is at a recent low and that the decrease in residential construction appears to have leveled off. Two new residential building permits were filed in January, bringing the cumulative fiscal year total to 29 as compared to 13 at this point in FY 2010 and 26 at this point in FY 2009. Only one new commercial construction project has been filed in FY 2011 at a value of $300,000. The value of commercial construction projects underway at this point was $11.5 million in FY 2010 and $58.0 million in FY 2009. By the end of 2011, based on projects in the pipeline, it is expected that the value of new multi-family construction will exceed 2010 levels.
Local sales tax revenues increased over last year by 5.0 percent in December as compared to 4.6 percent in November. Meals tax revenues per one percent of tax also increased by 5.0 percent over last year in November as compared to 5.0 percent in October. In December, the number of hotel rooms rented decreased slightly by 0.3 percent from last year; however, taxes based on sales increased by 1.5 percent, indicating that room rates increased slightly.