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Facts and Figures Relevant to Economic Development in Clinton County, New York

Job Losses Begin to Taper Off

by Paul Grasso - June, 2009

The New York State's Department of Labor (NYSDOL) recently reported a seasonally adjusted private sector job count of 7,125,200, which represents a monthly decline of 15,600 jobs, or  0.2 percentage points. While the state's private sector job count has dropped for eight consecutive months, the job losses are beginning to moderate.

	March 2008	March 2009	April 2009
Clinton	6.3%	10.5%	9.5%
New York State	5.0%	7.8%	7.7%
United States	5.0%	8.5%	8.9%

Since the state's private sector job count peaked in August 2008, New York has lost 189,000 private sector jobs, and has retained just over fifty percent of the 400,000 jobs added during the state's last economic expansion from 2003-2008. New York State's unemployment rate, after seasonal adjustment, fell to 7.1 percent in April 2009. The rate outside of New York City in April was 7.4 percent, down from 7.6 percent in March 2009.

"While it is gratifying to see that the state's unemployment rate showed little change during April, it would be premature to say that the end of the recession is in sight," said Peter A. Neenan, Ph.D., director of the Division of Research and Statistics.

Since April 2008, the number of nonfarm jobs (private plus public sectors) in New York State decreased by 180,800 or 2.5 percent, and the number of private sector jobs decreased by 161,600 or 2.2 percent. Nationally, the number of nonfarm jobs decreased by 3.8 percent and the number of private sector jobs decreased by 4.7 percent between April 2008 and April 2009. New York is demonstrating more success of late in holding on to nonfarm jobs when compared to national trends.

Since the recession began in December 2007, 5.7 million jobs have been lost nationally. By April of 2009, New York gained jobs in education and health services, while job losses in other sectors showed declines:

The Bureau of Labor Statistics releases six different numbers every month - U-1, U-2, U-3, U-4, U-5, and U-6. U-3 is the "official unemployment rate". The U-6 figure includes "discouraged workers." These are people who have stopped looking for work because they feel that the effort is a waste, and that there are no jobs available for them. Discouraged workers have looked for a job sometime in the past 12 months but have not been able to find one. The U-6 measure also includes "marginally attached workers," those who are not currently looking for work, but have attempted to look for a job sometime in the recent past and would take a job if offered. These "marginally attached workers" are not included in the "official" unemployment number because they have not looked for work in the past 4 weeks.

The USDOL has not released the May U-6 figure, but the April figure was 15.8% up from 8.9% in April 2008.

Another measure of how the economic meltdown is affecting Americans is the Misery Index. In the 1960's, Arthur Okun, an economic adviser to President Lyndon Johnson, created what he called The Misery Index. It is simply the unemployment rate added to the inflation rate. Okun assumed that both a higher rate of unemployment and worsening inflation both create economic and social costs for a country. A combination of rising inflation and more people out of work implies deterioration in economic performance and a rise in the misery index. The April Misery Index is 8.16%, calculated on an unemployment rate of 8.9% and an inflation rate of -0.74%. The all-time high is 21.98% in June 1980 and the all-time low is 2.97% in July 1953.

The Nelson A. Rockefeller Institute of Government reported that nationally state tax revenues fell by a whopping 12.6% in the first quarter of 2009. The Institute reported that the bulk of the decline was due to a drop in personal income tax revenues, which dropped nearly 16% year-over-year. The Institute reported that this was the largest decline in personal income tax revenues since 2002, which is when the last recession took place.

The report broke overall tax revenues down into three major categories: personal income tax, corporate income tax, and sales tax. Increased unemployment has resulted in a decline in personal income tax revenues as businesses face declining revenues and reduced consumer spending has led to a decline in sales tax revenue.

In New York, tax revenue is down across the aforementioned three categories. Personal income tax revenue is down 20.8%, corporate income tax revenue is down 36.8%, and sales tax revenue is down 5.6%.

 

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