January 2010 Monthly Briefing
ECONOMY: Jobs the Main Concern
Edward H. Boss, Jr., Chief Economist
The economic recovery has been underway since last summer as confirmed by data released by the Commerce Department near month end, yet the major concern is the lack of jobs this growth has generated. Most forecasters continue to predict a continuation of the economic recovery.
In addition to expectations of continued economic growth, there is still a large share of federal stimulus spending yet to come as well as proposals to assist small businesses announced by the President in his State of the Union address. While further growth is anticipated, its rate expected in the quarters ahead is likely to fall short of what would be needed to sharply improve unemployment rates any time soon. Indeed, as it is perceived that economic conditions are continuing to improve, it can be expected that discouraged workers will reenter the labor force keeping unemployment rates relatively high. Even so any improvement in employment would be welcomed and a necessary step to eventually reduce unemployment rates both in the U.S. and in Illinois.
REVENUE: January Revenues Grow Due to Federal Sources
Jim Muschinske, Revenue Manager
After experiencing a drop off the previous month, federal sources rebounded in January. While most of the economic sources continued to struggle, those losses were more than offset by federal reimbursements. As a result, net base monthly revenues grew $184 million.
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Through the first seven months of the fiscal year, overall base revenues are down $45 million. However, sizable growth in federal sources masks the extremely poor performance of the other revenue areas. In fact, when $899 million in federal source growth is excluded, all other revenue would be down a crippling $944 million. Despite being in the early stages of a recovery, the larger economically related sources such as income and sales continued to suffer from the recession’s effect. As continually mentioned in previous revenue briefings, it will be some time before improvement in receipts can be expected.