Thursday, March 29, 2012

The St. Louis economy

The Post-Dispatch has had a small flurry of articles on the current state of the St. Louis and Missouri economies. The thrust of the articles is that the area is underperforming relative to the rest of the country and is likely to continue doing so unless we focus on education. Here is a roundup:
  • A March 13 post by Dave Nicklaus that discusses the revised estimates of employment growth for 2011.  According to new BLS data (and my own estimates beginning last September), official data had been overstating job growth for the first half of 2011. The new estimates indicate a net loss of 3,900 jobs last year.
  • A March 23 post by Dave Nicklaus describing how St. Louis has returned to its usual role of economic laggard.  He reports Dave Rapach's forecast of 1 percent job growth in 2012.  The post also includes my points that we are lagging in the short term because the areas doing well have oil and/or natural gas, and in the long term because of weak human capital formation (education).
  • A March 28 article by Tim Logan reporting on a Brookings study claiming that St. Louis growth slowed toward the end of last year. My own view is that this study is not entirely accurate because it relies on data that will be revised upward (see the next item).
  • A March 28 post by Dave Nicklaus on some good news for St. Louis: My benchmark revision showing that last summer was better than the BLS estimates show.  Specifically, according to my estimates, job growth in 2011 was actually 4,200 rather than a loss of 3,900. I expect further upward revisions for the 4th quarter.
  • An editorial today urging the governor and state representatives to focus on reforming Missouri's system of higher education. They quote my point that education is our real problem, not the business environment or lack of tax credits.