Missouri also in recession, says Driskill

JEFFERSON CITY, Mo. -- State economic development officials publicly acknowledged for the first time Thursday that Missouri, like the rest of the country, is mired in an economic recession.

Joe Driskill, director of the Missouri Department of Economic Development, said during a news conference that, according to newly compiled data, the state economy went into recession in March, ending a record 10-year expansion. When the economy will show signs of rebounding is questionable, Driskill said.

"We believe that over the next several months the current economic downturn will continue to have a negative impact on Missouri," Driskill said. "Hopefully by late summer of 2002 the economic downturn will have ended and a recovery will be evident by then."

However, he said unpredictable variables such as additional terrorist attacks on American soil could prolong the recession throughout 2002.

Driskill said results are mixed on how Missouri's economy fares compared to other states. "We are better than some and worse than others," Driskill said.

Definitions of a recession vary. The National Bureau of Economic Research defines it as "a significant decline in economic activity, spread across the economy, lasting more than a few months" with a visible impact on several economic indicators.

In evaluating the situation in Missouri, state economists looked at four general areas: employment, personal income, manufacturing and industrial vitality, and retail trade and taxable sales.

According to their findings, unemployment in non-farm jobs in Missouri rose 2 percent with the loss of 56,700 jobs from January through October. Bollinger County, where unemployment rose 3.4 percent, is one of only nine counties in the state where the growth rate in unemployment exceeded the state average.

Statewide unemployment for October was 4.5 percent. Of 19 Southeast Missouri counties, 17 reported unemployment at or above the state average. Ten of those were among the 21 counties across the state plus St. Louis with unemployment higher than 6 percent. The highest area rates were in Washington County, 9.1 percent; Wayne County, 8.5 percent and Bollinger County, 8.0 percent.

Driskill said that even in the best of times unemployment in Southeast Missouri, especially the Bootheel, tends to be higher than in other areas of the state.

Perry County, at 2.9 percent, and Cape Girardeau County, 3.2 percent, were the only Southeast Missouri counties with rates below the state average.

Income up only slightly

Missourians' personal income rose a scant 0.73 percent between the first two quarters of 2001 compared to national growth of 0.83 percent. During the same period last year personal income in the state rose 2.22 percent.

However, the state ranks 18th in the nation in personal income and is higher than all neighboring states except for Illinois.

Declining industrial production and a loss of nearly 25,000 manufacturing jobs in the last year have been major contributing factors to Missouri economic problems, Driskill said.

"For more than a year, industrial production has been decreasing across the nation," Driskill said. "Although the decrease slowed early in 2001, the decreases have become even worse in recent months."

22 mass layoffs

In the third quarter alone, there were 22 mass layoffs in Missouri, costing 4,603 workers their jobs.

Retail sales have been weakening since early 2000 with sales growth coming to a virtual halt in May, Driskill said. The Sept. 11 terrorist attacks caused consumer confidence, already shaky, to plummet. However, consumer spending rebounded in October largely due to massive discounts by retailers.

Carol Russell Fischer, director of the Department of Revenue, said that while discounts helped convince some consumers to buy now rather than later, the boost could be temporary.

Incentives "sometimes have the effect of pulling retail sales forward from future periods," Fischer said.

mpowers@semissourian.com

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