Jackson Free Press

The Mississippi Institutions of Higher Learning released a report today indicating that another downturn in the national economic recession is unlikely, and that Mississippi's recovery is showing a slight improvement.

"This recovery hardly deserves the name, but it is still good news that Mississippi's economy is finally turning the corner," said IHL Senior Economist Marianne Hill, who pointed to a rise in retail sales, a drop in job losses, the number of issued residential building permits and stabilizing tax revenues.

However, the state's unemployment rate still averages 10 percent, and tax revenues are still below expected estimates for fiscal year 2010--while stimulus funds approved through the American Recovery and Reinvestment Act of 2009 are rapidly running dry.

The IHL report "Mississippi Economic Review and Outlook" reveals that the nation has enjoyed a net increase in jobs since January and the growth rate of gross domestic product has expanded at a rate of 3 percent for three quarters in a row. Even retail sales have picked up with consumers boosting their spending by 3.6 percent in the first quarter of this fiscal year. However, the report does not predict payroll employment to meet pre-recession numbers for another three years, and even this estimate may be too optimistic.

Mississippi, by comparison, has unemployment figures of 11.5 percent in March, compared to the South's average of 9.8 percent, putting Mississippi at 7th highest unemployment in the country.

Some counties are faring better than others. Metro counties maintained a 7.1 percent to 11.1 percent unemployment rate, with Hinds at 9.7 percent. Coastal counties, including Pearl River, Stone, George, Hancock, Harrison and Jackson counties averaged between 10.8 percent and 8.8 percent unemployment in March. Those March numbers, unfortunately, do not reflect a potential drop in revenue due to the April BP oil spill in the Gulf.

Many of the state's counties suffer higher unemployment. Holmes County, for example, has an unemployment rate of 21.8 percent, and the Delta counties average 15 percent unemployment.

The state's foreclosure rate was up in the first quarter of fiscal year 2010, although that 3.1 percent foreclosure rate is still below the 4.6 percent national average.

The report predicts that the Gulf oil spill will "add to the economic challenge facing the state," particularly in light of the fact that the state's tourism and seafood industries were only beginning to achieve pre-Katrina revenues. The drop in the price of the euro is also working against the state by decreasing European exports. Exports had already dropped 14 percent in 2009 and were gearing up for an improvement before the faltering economy of Greece sent the euro into a slump.

The report also looks at the challenges of financial reform currently in debate in Washington, and estimates that legislation in its current form does too little to regulate derivatives trading. Derivatives trades in financial products such as mortgage-backed securities, which--unlike bank deposits--are not backed by federal money, "were behind the crash in the fall of 2008," the report says.

The report states that third-party oversight of derivatives trading through a monitored exchange is necessary for transparency, but questions banks' desire to own and operate the exchanges. It also points out that the current shape of the Washington legislation allows purchases of derivatives over the phone, eliminating third-party oversight altogether.
It also predicts that national health-care reform, which legislators passed in March, will affect government expenditures in 2014, forcing many states to steer more tax dollars to state healthcare systems.

Hill said the estimate still qualifies as positive news, however modest, and said the document projections offer more realistic numbers.

"Look at actual revenue compared to estimated revenue and how it was this May compared to last May. It was under a 4 percent drop, which was lower than last May. But the reason the drop looked so bad (last May) was that the estimate was higher for that May--the thinking being that by this point in the year we would be coming out of the recession at a faster pace," Hill said.

Previous Comments

ID

158268

Comment

This is good news; however, Holmes and some of the other Delta counties have always had very high unemployment rates. Once machinery took over cotton farming and a few very small plants went bellly-up; this was the end of any un-employment numbers being in lower double digits.

Author

justjess

Date

2010-06-21T14:39:36-06:00