Economic Overview

From 1998 to 2008, non-farm employment in the St. Louis, MO-IL MSA area grew by 3.9%, adding 51,000 jobs to reach a total 1,358,100 by year-end 2008. The nation entered a recession in December 2007. In early 2009, as the nation's economy continues to weaken, non-farm employment in the St. Louis region declined. Employment was 34,200 lower in April 2009 than one year earlier, representing a 2.5% decline. The largest April losses were in the manufacturing and other services sectors (6.7% and 8.0% respectively). In contrast, the education and health services sector continued to expand, adding 3,500 jobs and posting a 1.7% increase.

Reflecting a national trend of rising unemployment, the region's unemployment rate reached 8.0% in April 2009, representing a 2.7 percentage point increase from the April 2008 rate of 5.3%. April's rate was the first month since 2004 that the region's unemployment was lower than the U.S. April rate of 8.6%

According to the Federal Reserve's Beige Book, released on June 10, 2009, economic activity in the Fed's Eighth District, which includes the St. Louis, MO-IL MSA as well as portions of Missouri, Illinois, Kentucky, Tennessee, and all of Arkansas, continued to weaken from April 2009 through mid-May 2009. The Beige Book reports that most of the Federal District Banks continue to experience weal economic conditions. However, the downward slide is showing signs of moderating in some districts, and some districts report improved expectations. Even with some emerging positive indicators, there are no expectations for a substantial increase in economic activity through the end of the year.

In the Eight District, retail sales were lower than one year ago and more than half of the retailers surveyed expect summer sales to be lower than 2008 levels. Auto dealers report lower sales and more than half reported an increase in rejected finance applications.

The manufacturing and service sectors continued to contract through mid-May. This decline was reflected in job layoff announcements, reduced production levels, and a fewer businesses reporting plans to hire additional workers.

Residential real estate activity continued to decline throughout the district. April 2009 year-to-date home sales dropped 13%, while single-family housing permit activity declined by 45% in St. Louis.

The commercial real estate market remained flat in the region. Credit conditions are stalling new projects and commercial construction is expected to be anemic in 2009.

Updated: June 16, 2009