Our business cycle index is a simple statistic that tracks the current state of the regional economy. The index is calculated from a number of data series that moves systematically with overall economic conditions. It is important not to focus on the magnitude of the index, but rather the direction. One may infer a rise in the index as an expansion of economic activity in the region and a decline in the index as a contraction in economic activity. Regional indexes are computed using data on employment, retail sales, tourism-related spending, and the unemployment rate. Three national cyclical recessions (denoted in grey) and two major hurricanes (denoted in black) are presented on the graph below for reference.
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The index for the Pensacola MSA appears to be stabilizing since the recent recession. Between the third quarter of 2011 and the third quarter of 2012 approximately 450 jobs have been added in the Pensacola MSA. The unemployment rate has dropped from a seasonally adjusted rate of 9.91% in the third quarter of 2011 to 8.43% in the third quarter of 2012. Retail sales seasonally adjusted are starting to stabilize after the recent recession. Although the BP Deep Horizon oil spill affected tourism spending in 2010, the Northwest Florida region is experiencing a recovery in the industry.