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Ithaca Index: City’s business upturn continues early this year

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Biz Index

The Ithaca metropolitan area added 200 jobs in March bringing the total number of jobs to 65,400. 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 was 3.4 percent. The comparable unemployment rates for New York State and the nation were 4.0 percent and 3.8 percent, respectively.

Ithaca’s labor force decreased by 100 to a level of 50.900 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.

Retail sales in Tompkins County bounced back after a sluggish start to 2019. Retailers racked up $158.8 million in sales in March and sales volume rose a hefty 3.5 percent. Compared to March 2018 retail volume was 0.1 percent lower.

The average workweek in Ithaca shortened to 32.5 hours from 32.8 hours in February, a decline of 0.9 percent. This figure is indeed an average that includes both full and part-time employees in the private sector. Compared to March 2018, the work week was 0.3 percent shorter. Although some people may enjoy a shorter work week, it is a sign of reduced economic activity.

Home sales in Ithaca increased another 5.0 percent in March on top of February’s gain. Comparing March 2019 to March 2018, home sales were off 9.1 percent. But the median home’s price soared between those two months from $218,000 in 2018 to $251,000 in 2019.

Help-wanted advertising inched downward by 5.5 percent in March, a tame move for this volatile indicator. Compared to March 2018, help-wanted advertising was up 22.7 percent. Changes in help-wanted advertising can signal changes in employment.

Ithaca’s retail industry had a phenomenal year in 2018 when sales grew by 10 percent. But the first two months of 2019 had them under water. Their showing in March brings them back to just about level with last years average. April’s performance will be key for this important indicator.

Overall, the first three months of 2019 are encouraging for the local economy. Economic activity has been running ahead of last year’s average and now that retail sales are back on track, none of our indicators have been flashing red. Right now there is steady, sustainable growth.

In January 1985 the Ithaca Business Index stood at 100.00. In March 2019 the Index reads 173.44. This means that the Tompkins County economy has grown 73.44 percent in those 411 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 8 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 173.58, its reading in November 2018.

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