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The purpose of this bulletin is to provide local leaders with information on key economic trends that make up the current economic climate. These trends are significant because they impact the availability of funds for education, health care, and other public services at the national, state, and local levels.
This bulletin is issued twice each calendar year - summer and winter - and presents information about changes in the gross domestic product, employment and unemployment, consumer prices, retail sales, housing, industrial production, and stock market performance. Other pertinent trends are described as well. In addition, a brief summary of projections for the economy is presented. Finally, comments on both the Federal and State Budgets are offered. We will continue to issue regular monthly Information Bulletins on the Consumer Price Index.
This is the tenth issue of the Current Economic Climate. Your comments and suggestions on this series of Information Bulletins are most welcome. Please contact Dan Kinley or Neil Foley at NYSUT Research and Educational Services with your feedback and comments.
No. 200817
Released April 2008
Highlights
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The annual growth of the Real Domestic Product for 2007 was 2.2 percent which compares to 2.9 percent for 2006, 3.1 percent for 2005 and 3.6 percent for 2004.
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The national unemployment rate for December 2007 was 5.0 percent which is higher than the 4.4 of December 2006 and the 4.8 of December 2005.
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The New York State unemployment rate for December 2007 was 4.9 percent which is higher than the 4.1 percent of December 2006.
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New York State employment for December 2007 was at 8,841.4 million jobs which is up from the December 2006 employment level of 8,772.4 million jobs.
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The manufacturing industry in New York State has lost 406,400 jobs from December 1990 to December 2007, a loss of 42.8 percent.
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The Consumer Price Index – United States City Average for December 2007 was 4.1 percent higher than the index for December 2006.
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According to the Congressional Budget Office, the Federal budget deficit for 2008 is expected to rise over the $163 billion deficit for 2007 to an estimated $219 billion.
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The New York State Division of the Budget in its 21 Day Amendments to the 2008-09 Executive Budget has estimated that revenues for 2008-09 will be lower by $384 million.
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While pointing to a soft economy marked by a higher unemployment rate, the financial market problems associated with sub-prime mortgages, higher energy prices and the slowdown in housing, the Federal Reserve Chairmen Ben Bernanke said before Congress in February 2008 that the Federal Reserve Board has reduced the federal funds rate by 2.5 percent since September 2007, and that the Board is monitoring the economy carefully and will take actions necessary to promote moderate economic growth and mitigate risks to economic activity.