Unemployment Disparity

New York City's unemployment rate inched up even as the rate fell in the rest of the state in July, the New York Labor Department reported last week.

The city rate hit 9.6% last month, its highest level since June 1997, surpassing the national rate of 9.4%. Nationally, the unemployment rate fell by one-tenth of a percentage point in July from the previous month. Statewide unemployment fell to 8.6% last month from 8.7% in June.

Seasonally adjusted private-sector employment in the state increased in July for the first time since August 2008, rising 0.2% to 7,089,500, a 14,000 net increase. Nonfarm employment, which includes private- and public-sector employment increased by 62,100 jobs, a 0.7% increase.

"This month's large increase in nonfarm jobs was due in part to federal stimulus spending," said Peter Neenan, director of the state Labor Department's division of research and statistics. "Stimulus-funded projects helped boost employment in the construction sector. In addition, there was a much larger-than-normal increase in government-funded summer youth hiring this year."

Despite the statewide rise in employment, state revenues in July fell $52.6 million below projections, State Comptroller Thomas DiNapoli reported last week. Since the beginning of the fiscal year on April 1, the state has collected $11.5 billion, a $3.6 billion drop compared to the same period last year. Most of the decline is due to lower personal income tax collections.

"Although there were some small signs that the national economy is slowly turning around, economists project it will take longer for New York State to recover," DiNapoli said in a press release. "The fact remains that state revenues continue to fall below financial estimates ... New York has a very real and growing current year deficit. The governor and Legislature need to make some difficult choices that weren't made in the enacted state budget."

Gov. David Paterson last month announced that revenue shortfalls had created a $2.1 billion current-year deficit despite a temporary tax increase on high earners in the state and the infusion of federal stimulus dollars.

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