The local economy rebounded from a slow start in 2019 by picking up the pace in February. The Ithaca Business Index increased 0.4 percent to 172.32 from a revised mark of 171.69 in January. Gains in hours worked, home sales, and help wanted advertising drove the index higher. Declines in the labor force and retail sales limited the gains, while employment held steady. Compared to February 2018, the index was up 2.2 percent.
The number of jobs in the Ithaca metropolitan area held steady at 65,200 in February. All the figures in this report are seasonally adjusted so that any month can be compared with any other without regard to seasonal factors. Ithaca’s unemployment rate held steady as well at 3.2 percent. The comparable unemployment rates for New York State and the nation were 3.9 percent and 3.8 percent, respectively.
Ithaca’s labor force decreased by 400 to a level of 51,400 persons. Anyone residing in Ithaca with a part-time or full-time job is in the labor force. In addition, anyone residing in Ithaca without a job, but actively seeking employment, is also included in the labor force. A smaller labor force means less economic potential.
After a strong showing in 2018, retail sales in Tompkins County lost ground in January and retreated further in February, falling another 4.5 percent. It will be interesting to see if Ithaca’s retail sales growth continues in 2019. Hopefully, this is a two-month setback, and not a trend. Compared to February 2018, retail volume was up 1.0 percent.
The average work week in Ithaca edged higher to 32.9 hours from 32.8 hours in January, an increase of 0.3 percent. This figure is indeed an average that includes both full- and part-time employees in the private sector. Compared to February 2018, the work week was 1.9 percent longer.
Home sales in Ithaca vaulted 60.0 percent in February after a disappointing showing in January. It is not unusual for this volatile indicator to vary widely. Comparing February 2019 to February 2018, home sales were up 9.1 percent. But the median home’s price fell between those two months from $224,500 in 2018 to $213,100 in 2019.
Help-wanted advertising popped 46.1 percent in February. Compared to February 2018, help-wanted advertising was up 32.6 percent. Like home sales, help wanted advertising can vary widely from month to month. Changes in help wanted advertising can signal changes in employment.
It was good to see the Ithaca Business Index rise in February after its poor showing in the first month of the year. 2017 was a breakout year for the local economy when it grew 3.8 percent. 2018 would have been perfectly flat if not for a growth spurt in the fourth quarter. Even with that, the local economy expanded by only 1.0 percent.
2019 is off to a mixed start. January was down, but February was up. Retail sales had been doing well in 2018, but not so far in 2019. Home sales underperformed in 2018, but look better at the start of 2019. Perhaps next month’s figures will help us determine if we are at an inflection point.
In January 1985, the Ithaca Business Index stood at 100.00. In February 2019, the Index reads 172.32. This means that the Tompkins County economy has grown 72.32 percent in those 4,010 months.
From 1985 until 1988, the Ithaca metro region grew at a rapid clip. The average annual growth rate was 5.4 percent. The Ithaca Business Index reached a peak of 130.34 in March 1989. A recession brought the Index down to a level of 110.98 in April 1992. This 36 month slide was much longer and more severe than the national recession which lasted only eight months. Since then, the county economy has recovered, but annual growth rates of 1.5 percent are more typical these days.
There was a less severe version of the Great Recession here in Ithaca that started in April 2008 and ended in July 2009. The most recent recession began in March 2014 and ended in March 2015. There was no national recession during this time, but economic activity in Ithaca fell 0.2 percent in 2014 and 1.4 percent in 2015.
The Ithaca economy has been expanding since the summer of 2015. The Ithaca economy grew 2.2 percent in 2016, 3.8 percent in 2017, and 1.0 percent in 2018. The all-time high for the Ithaca Business Index is 174.03, its reading in November 2018.