The Missouri Economy: In Transition or Decline? David M. Mitchell Associate Professor –Dept. of Economics Director—Bureau of Economic Research and the.

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Presentation transcript:

The Missouri Economy: In Transition or Decline? David M. Mitchell Associate Professor –Dept. of Economics Director—Bureau of Economic Research and the Center for Economic Education Missouri State University

The Missouri Economy in Brief

Missouri Regions and Major MSAs

United States and Missouri Housing Price Comparison

Housing Price Index for Major Missouri Cities (1995:1 = 100)

Missouri SA Employment (HH survey)

Missouri Employment (SA)

Missouri SA employment Jan 00 to Oct 09

Missouri Employment SA Jan 00 to Oct 09

Employment by City/Rural (Jan 1990 = 100)

Which MO Industries have lost jobs? Percent of job losses by Industry

Job Loss Comparison (Dec 07-Oct 09)

Mo Professional and Business Employment

Missouri Construction Employment

Missouri Manufacturing Employment

Change in Missouri Employment (Nov 2007 to Oct 2009)

US and Missouri Employment (Jan 2000 = 100)

Missouri Employment (Long Run)

Missouri Unemployment Rate by County

Missouri Unemployment Rate (SA)

United States and Missouri Unemployment Rates Compared

Change in Real Taxable Sales (YTD)

Change in Real Taxable Sales ( YTD)

Every lost job in Missouri diminishes taxable sales by $16,435 or decreases in sales tax revenue of approximately $1,477. Every job lost in Missouri diminishes total tax collections (income and sales tax) by about $3,600— therefore, we see a decrease of approximately $570 million. This does not include the decrease in gas tax, alcohol, etc. or the increase in costs for greater AFDC, food stamps, Medicaid, unemployment compensation, etc.

Also, consider what employment would be at if we didn’t have the ‘bowl effect’ and had grown at the rate in the 1990s. Assume no recession, and employment would be 3,427,000 today—an additional 700,000 jobs or $2.5 billion in the state budget or an increased $11.5 billion in taxable sales compared to today. With the same percentage drop in the current recession? Employment would be 3,058,000 or an increase of 325,000 jobs compared to today—an additional $1.2 billion in the state budget or an increased $5.3 billion compared to today

Missouri Real Taxable Sales (SA)

Forecast of Missouri for 2010 Based on US GDP growing at 2.1% and US unemployment rate of 9.6% Mo Employment will decline another 5,040 to million Mo Unemployment Rate of 10.1% Missouri Taxable Sales—flat Missouri Tax Revenue—down 4%

Missouri and the Midwest GSP as a percent of US GDP

Actual vs. Projected Missouri Personal Income (Sept dollars)

Cumulative percent actual MO PI is below Projected PI

Growth of Missouri PI less Growth of US PI

Missouri Gross State Product as a percent of US GDP

Missouri GSP (Real and Projected)

Cumulative percent actual MO GSP is below Projected GSP

Growth of Missouri GSP less Growth of US GDP

US and Mo Employment Comparisons

Actual and Projected Missouri Employment

Difference between Projected and Actual Jobs

Growth of Missouri Employment less Growth of US Employment Seasonally Adjusted Year over Year

Understanding the Problem The Missouri economy has been in a state of decline for over 50 years Had the Missouri economy grown at the same rate of the nation, its Gross State Product would be 35% larger than today. Furthermore, had the Missouri economy grown at the same rate as the nation, its Personal Income would be 20% larger than today