Jobs report points to still weak economy
A weak jobs report released Friday shows the national economy is still struggling to recover two years after the official end of the recession. Though indications are the local and regional economy continues to expand, economists worry that growth could stall in the second half of this year.
According to the U.S. Department of Labor, the economy added just 18,000 net jobs in June, the fewest in nine months. The unemployment rate rose to 9.2 percent, the highest rate of the year.
Businesses added just 57,000 jobs last month. That was the fewest in more than a year. Governments cut 39,000 jobs. Over the past eight months, federal, state and local governments have cut a combined 238,000 positions.
According to the website missourieconomy.org, which tracks unemployment and other economic indicators across the state, Missouri’s unemployment rate in May (the last month for which state-wide numbers are available) was unchanged at 8.9 percent. Pettis County has seen notable swings through the spring, with a high of 8.5 percent in March, a full point drop to 7.5 percent in April and a half-point increase to 8 percent in May — still more than a full point below the national rate and nine-tenths of a point lower than the state as a whole.
Although job creation remains sluggish, economic activity, as represented by state and county tax receipts, continues to improve over last year.
On July 1, State Budget Director Linda Luebbering announced that Fiscal Year 2011 ended with net general revenue collections increasing by 5.9 percent compared to Fiscal Year 2010, from $6.77 billion last year to $7.18 billion this year; and net general revenue collections for June 2011 increased by 47.2 percent compared to those for June 2010, from $492.2 million to $724.4 million.
Pettis County Presiding Commissioner John Meehan said Friday that year-to-date revenues are up $218,000 over the same time period last year. Meehan credited “a proactive and cooperative attitude among county government, the city of Sedalia, and the other communities in Pettis County,” with helping encourage the growth of established businesses and in attracting new businesses to the area.
However, Meehan stressed that conditions remain uncertain, especially on the national level as pro-jobs legislation and stimulus spending have been curtailed as lawmakers debate budget bills and raising the nation’s debt limit.
“We certainly look better overall than we did this time last year, but all that could still change. We just don’t have a crystal ball to make those kinds of predictions,” Meehan said.
Signs of a potentially slowing recovery, fueled by higher energy prices and the effects of a slew of natural disasters were highlighted in a report released last week by researchers at the Creighton Economic Forecasting Group.
Creighton has conducted the monthly survey of supply managers in nine states since 1994 to produce leading economic indicators of the Mid-America economy. States included in the survey are Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.
“Higher energy prices, and supply disruptions related to the Japanese tsunami and to floods in the Mid-America region are clearly slowing growth in the economy and cooling rapid commodity price growth,” Creighton University Economics Professor Ernie Goss said.
The Creighton report found that for the third time in the past four months, the Business Conditions Index for the nine-state Mid-America region fell. The overall index, based on a scale of 0 to 100 with 50 percent representing neutral growth, is a mathematical average of indices for new orders, production or sales, employment, inventories and delivery lead time.
The index, based on a monthly survey of supply managers, predicts positive but slowing growth for the next three to six months.
The regional index plummeted to 54.9 from May’s 60.2. While this is the 19th consecutive month that the index has been above the growth neutral 50.0, the index is trending downward.
Since bottoming out in December 2010, the Missouri economy has added almost 18,000 jobs for a 0.7 percent gain.
Looking ahead six months, economic optimism, as captured by the June business confidence index, tumbled to 52.3 from May’s 60.4 and April’s 57.5.
The Associated Press contributed to this report.
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