JACKSON — The economy is showing signs of life in Mississippi with retail sales rising and tax revenues stabilizing, but unemployment is still hovering near 10 percent, according to the June 2010 issue of the Mississippi Economic Review and Outlook.
The publication is compiled by the Center for Policy Research and Planning at the Mississippi Institutions of Higher Learning. This issue presents the state economic forecast from 2010 to 2015, and includes detailed employment forecasts by sector (a probability of 60 percent is estimated for the state forecast). National and international developments impacting the state economy are examined.
“This recovery hardly deserves the name, but it is still good news that Mississippi’s economy is finally turning the corner,” senior economist Dr. Marianne Hill said of the state’s economy.
Retail sales have been rising, job loss is slowing, tax revenues are no longer plunging, and the value of residential building permits issued has stabilized. Still, the unemployment rate is hovering near 10 percent, tax revenues are below estimate for fiscal year 2010, and federal stimulus funds are running out.
Rural areas are suffering more from unemployment than urban areas; and some industries have been hit harder than others. Employment dropped more in construction than in any other sector, sinking 12 percent in the first quarter in comparison to the same period last year. The oil spill in the Gulf and tornadoes this spring have added to the economic challenges facing the state.
Nationally, gains in job creation and in output are strengthening. A double-dip recession is unlikely, although global financial instability and weak demand continue to threaten a smooth recovery. Indicators remain mixed, as is usual during a recovery: nonresidential construction continues to drop, while housing starts are up. Consumer spending is rising, but local and state government spending is down.
Unemployment rates vary greatly by region and industry. The South’s unemployment rate was just above the national average of 9.7 percent in March, while the unemployment rate in manufacturing was 13 percent and in construction was 25 percent. Blacks had unemployment rates above that for whites, and female heads of household had unemployment rates above the overall rate for men.
The recovery lacks strong drivers on the demand side and so is forecast to be slow. Consumers are recovering from a 22 percent fall in their net worth, and are increasing their spending only gradually. Business enjoyed an increase in profits in the first half of the year, but investors remain cautious about expanding facilities.
The financial reform package nearing a final vote may not have adequately addressed the “too big to fail” problem, and the healthcare reform bill is likely the first of many steps towards addressing rising health care costs.