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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. This information is important to local union leaders because ultimately, the ability to make investments in critical public services at all levels -- national, state, and local -- could be impacted by the general health of the national economy. In New York State, the state’s economy is very dependent upon the financial services sector; therefore changes in the economic climate could impact the state’s ability to provide funds for education, health care, and other public services. All of this impacts on the Resources available to school districts.
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 ninth 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 comments and suggestions.
No. 200711
Released September 2007
Highlights
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The Real Gross Domestic Product rate of change fell to 0.6 percent in the First Quarter of 2007 and then rose to 3.4 percent for the Second Quarter of 2007. Current forecasts for all of 2007 place the annual rate of Real GDP growth at 2.0 percent, and 2.8 percent for 2008. These would be the lowest annual rates since 2003.
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The unemployment rate for the United States for June of 2007 was 4.5 percent which is the lowest since 2001
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The unemployment rate for New York State for June of 2007 was 4.7 percent, which is up from the June 2006 rate of 4.5 percent.
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There were 8.7 million workers employed in June of 2007 in New York State which is the highest number in over 10 years.
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The changing nature of the New York State employment picture is marked by the loss of manufacturing jobs – 443,000 jobs since 1990, and the increase in jobs in health care and social assistance – 385,300 jobs since 1990.
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Inflation has diminished from June of 2006 to June of 2007. For New York – Northern New Jersey Area, the inflation rate for June 2006 over June 2005 was 5.6 percent. The same rate for June 2007 over June 2006 was 2.5, a reduction of slightly more than half the rate of the previous period.
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The price of gasoline has risen to $3.10 per gallon in June of 2007 which is a gain of just more than 100 percent since June of 2003 when gasoline was $1.53 per gallon.
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The federal budget deficit is projected to be $214 billion for 2007 and $226 billion for 2008.
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The New York State Division of the Budget is projecting budget gaps for 2008-09 of $3.6 billion, for 2009-10 of $5.3 billion, and for 2010-11 of $6.7 billion.