Missouri responds weakly in economic recovery

JEFFERSON CITY, Mo. -- While the nation's economy has shown some signs of recovery, Missouri remains stuck in a recession, state officials said Friday.

Missouri's economy is lagging behind those of its neighbors and likely is "some months away" from showing significant improvement, said Joe Driskill, director of the state Department of Economic Development.

"The data we've seen for Missouri indicates we are still suffering from the results of this recession," Driskill said. "Any recovery will likely have trouble getting established and experience some ups and downs before prolonged growth occurs."

When officials last assessed the state's economy, in November, they said Missouri was generally on par with the national trend, which was downward.

But the state and national trends now diverge.

"Missouri is one of the slowest states to pull out of the recession," said Carol Fischer, director of the state Department of Revenue.

By comparison, Federal Reserve Chairman Alan Greenspan said Wednesday that the nation's economic future is looking brighter.

The driving force behind Missouri's struggling economy is its poor labor market, particularly large job losses in the manufacturing sector, Driskill said.

Missouri lost 52,100 jobs over the year ending in February, a 1.9 percent employment loss that was among the worst in the nation, he said. Manufacturing jobs accounted for 60 percent of the loss.

Adding in March employment figures released Friday, the state's cumulative job losses had grown to 59,600. Missouri had a 5.3 percent unemployment rate for March, up slightly from the previous month but still below the national unemployment rate of 6.1 percent.

State economic officials said unemployment typically declines in March as jobs resume in activities affected by weather, such as construction.

Other factors contributing to Missouri's struggling economy, according to a report by the Missouri Economic Research and Information Center, include:

Stagnant retail sales in recent months. Sales dropped sharply after the Sept. 11 attacks and rebounded in October, largely because of interest-free vehicle promotions, but have remained flat in the past four months.

The 0.2 percent increase in retail sales in March was due entirely to higher gasoline prices, the report said. Fischer said it appears that consumers are opting for discount and wholesale stores over retail or department stores.

A decline in the growth of Missourians' personal income to a nearly flat level. Personal income grew at 0.7 percent between the first and second quarters of 2001 on a seasonally adjusted annual basis. Between the second and third quarters, that growth rate dropped to 0.3 percent -- half the national rate, the report said.

State officials, however, did point to one positive sign among Missouri's economic indicators -- the state's purchasing managers' index, which measures such things as new business orders, production, inventories and prices.

The state's PMI score of 59.4 in March was up from 53.3 in February and above the regional average. Typically, a score above 50 indicates an expanding economy in the next three to six months, the report said.