Report finds signs of slowing Southeast Missouri economy

A rising unemployment rate indicates a slow down in Southeast Missouri's economy, according to the latest newsletter from the Center of Economic and Business Research at Southeast Missouri State University.

While data from April to May indicate that total employment rose by nearly 2 percent from the previous quarter and unemployment decreased by almost a percentage point, those statistics are deceiving, said center director Bruce Domazlicky.

He said employment normally increases during the second quarter because of seasonal factors. By comparing total employment in Southeast Missouri to the second quarter in 2007, that increase is .2 percent.

Additionally, Domazlicky said the unemployment rate is 6 percent, .7 percent higher than the same time period in 2007.

"As anyone knows, when unemployment goes up the local economy is impacted," said Domazlicky, who also is an economics professor at Southeast. "And in Cape Girardeau County we have a good mix of industries such as higher education and health care that are able to ride out recessions. Industries such as automobiles and appliances may have a harder time making it."

Unemployment figures reflect the fact that the region is not immune to economic difficulties the rest of the nation is facing, Domazlicky said. He added that Southeast Missouri's unemployment rate mirrors the national average of 6.1 percent.

Domazlicky said residents in Southeast Missouri are cautious about spending and he expects that to be reflected when the sales tax data is released. He said some indications are that sales tax receipts are slowing and turning negative in some cases. With little or no growth, Domazlicky said the downturn more than likely will negatively impact local government budgets in the next six to 12 months.

"When retail sales are down that means less revenue for governments to use for programs," he said. "That will in turn force governments to make decisions on how they spend less money in the best way they see fit."

Look for more later in the day at semissourian.com and in Wednesday's print edition of the Southeast Missourian.

bblackwell@semissourian.com

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