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Unemployment in Clinton County Rises Slightly
by Paul Grasso, August, 2009
Some "green shoots" seem to be appearing on Wall Street, but indications of an economic recovery have yet to make their way to Main Street. The New York State Department of Labor (NYSDOL) reported that the state’Äôs unemployment rate increased to 8.7 percent in June 2009, its highest level since October 1992.
In June 2009, the number of unemployed New York residents jumped to 854,200, the greatest number ever on record (with current data extending back to 1976).
Unemployment Statistics (NYSDOL Data)
After seasonal adjustment, New York State's private sector job count decreased over the month by 17,700, or 0.2 percent, to 7,078,300 in June 2009; it has now dropped for ten consecutive months, despite a consistently strong showing in the Education and Health Services sectors. Since the state's private sector job count peaked in August 2008, New York has lost 235,900 private sector jobs, erasing more than half of the 400,000 jobs added during the last economic expansion from 2003-2008. Peter A. Neenan, Ph.D., Director of the Division of Research and Statistics, recently noted that "Labor market conditions continued to deteriorate in June 2009 as the number of unemployed New Yorkers reached its highest level since at least 1976. Nonetheless, the state lost jobs at a slower pace than the U.S."¬Ý
The United States unemployment rate continues to move upward toward the 10% mark for the first time in nearly 30 years.¬Ý Not since September of 1982 has the unemployment rate climbed over the 10% mark.¬Ý In 1982, the unemployment rate remained over 10% for a full 10 months, topping out at 10.8% in both November and December.
While most economists agree that the unemployment rate may still peak around 10%, recent signs of a rebounding economy suggest it won't go much higher. The effects of the federal stimulus package to date have merely mitigated layoffs proposed by the various states. In the absence of such spending, economists have predicted that the unemployment rate could have been between two and three percentage points higher. It will not be until the latter half of this year and throughout 2010 that the job creation provisions of the stimulus bill will have an opportunity to work.
The Associated Press analyzed the revenue side of the federal budget (taxes) and determined that federal revenue continues to fall far short of expectations. This may lead to a federal budget deficit that will grow even further than predicted.¬Ý The AP analysis comes on the heels of a study by the Rockefeller Institute of Government released in April that reported that New York State tax revenues fell by 12.6% in the first quarter of 2009.
Tax receipts are on a pace to drop 18% this year, the biggest single-year decline since the Great Depression.¬Ý At the same time, the federal deficit will grow to a record $1.8 Trillion.
Other figures in an Associated Press analysis underscore the recession’Äôs impact:
’Ä¢ Individual income tax receipts are down 22 percent from a year ago.
’Ä¢ Corporate income taxes are down 57 percent.
’Ä¢ Social Security tax receipts could drop for only the second time since 1940, and
’Ä¢ Medicare taxes are on a pace to drop for only the third time ever.¬Ý
The AP article included this telling graphic:
Declining tax revenues will certainly affect deficits in future years. Of course, the deficit projections are based on growth assumptions benchmarked to today’Äôs economic performance. If the economy is able to rebound sufficiently and early, the compounding effects of reduced deficit projections will reduce bleak federal debt projections.