SEMO report finds unemployment, retail sales up in 3rd quarter

Thursday, January 22, 2009

A new report paints a mixed economic picture for Southeast Missouri.

Though the unemployment rate reached 7.1 percent for the third quarter, the report from the Center of Economic and Business Research found that retail sales performed better than expected.

Economist Bruce Domazlicky, director of the center at Southeast Missouri State University, said about 8,000 fewer people have jobs in Southeast Missouri in the third quarter than in the second quarter, when 403,127 people were employed.

Though the third quarter decrease is due in part to seasonal factors, Domazlicky said, the statistics show the region is shedding jobs.

Unemployment could reach as high as 8.5 percent in the area this year, he said.

"The effect appears to be fairly widespread as well," Domazlicky said. "Even Cape Girardeau County shows no increase in employment from the third quarter of 2007 to the third quarter of 2008, plus its unemployment rate rose by 0.5 percent from the same quarter a year ago."

Unemployment increased in 23 of the 24 counties listed in the report. Bollinger County was the lone county with a decrease in unemployment, dropping from 6.7 to 6.1 percent in the third quarter.

Perry and Cape Girardeau counties had the lowest unemployment rates at 4.5 and 4.7 percent, respectively. Washington County had the highest unemployment rate of 10.2 percent, an increase of 1.1 percent from the second quarter.

Among the notable businesses that closed or announced layoffs in the third quarter were Thorngate Ltd. in Cape Girardeau, Havco Wood Products in Scott City, Colt Beverage in Sikeston, Mo., and Advance Logistics in Jackson.

Even with rising unemployment, retail sales increased during the third quarter. Retailers on average took in $11,831 more than in the second quarter.

Washington County, which posted a double-digit unemployment rate, saw a $2,500 increase in retail sales.

"I was a bit surprised that retail sales actually showed a slight increase in the third quarter," Domazlicky said. "I have to think they will decline in the fourth quarter."

Domazlicky said little prospect of recovery exists until the national economy begins to improve.

Still, he said, the economy may grow by a small margin in the second and third quarters of this year.

"The outlook for an improvement in the last half of the year is based on an improvement in the financial sector," he said. "The effects of monetary policy will start to be felt, such as lower interest rates.

"Higher money growth should eventually work its magic," he said.


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