From Light Bulbs to Cupcakes -- An Uncertain Economic Picture

We did not have a happy beginning to the week. On Monday we learned that unemployment in September reached 7.2%. The only , and I emphasize only, silver lining is that at that level, Washington will shoulder an even bigger share of the state’s Medicaid tab. Under the stimulus plan, it will now pay about 67% of the billion-plus dollar program.

The employment picture for state workers went south this week. When they rejected a proposed contract, Governor John Lynch started cutting the workforce.

LYNCH: The layoff notices will begin today. And they will happen throughout this week and we expect for the majority of them, they will be completed by Friday.”

250 workers were pink slipped. About another 50 were transferred to lower paid jobs.

Over at the Osram-Sylvania plant in Hillsboro, managers called back about 5 dozen workers who had been laid off months ago. The factory makes light bulbs for cars and the cash for clunkers program stirred up some new demand from car makers. For the time being however, the jobs are temporary.

The housing market is poking along. September numbers show prices are still falling and the number of homes sold is also down. The good news is that housing is more affordable than it’s been in quite a while. One of the consultants helping the association of realtors, demographer Peter Francese, says that, together with historically low interest rates, will drive new demand.

Francese is bullish on the New Hampshire economy. He predicts that when the recovery gets underway, the state will be among the first in the nation to rebound. But unlike past recoveries when housing or high-tech drove the bus, Francese has a hunch that we’ll find that a blend of industries will save the day.

FRANCESE: If the balloon goes up, there’s going to be 5 or 6 sectors pulling it simultaneously; not one sector being the major engine of economic growth.”

And what sectors might those be? Francese picks health care, alternative energy, and, a line of work that he knows very well, business consulting and other professional services.

An interesting note about personal incomes. They rose a sliver of a percent in the second quarter of 2009. In New Hampshire, the increase was a scant million dollars. But just about all of the increase was due to federal transfer payments, such as higher unemployment benefits. Without the federal stimulus, incomes would have dropped significantly.

One sign of hard times from the Working It Out blog. Ben works at a grocery store in Laconia. He says there’s been a surge in fake discount coupons and gift cards. Minor shoplifting is up too. At night, he finds the little things that have been pilfered – an empty water bottle or a pack of cupcakes.

Ben goes to Lakes Region Community College. Many students and teachers there have put some great observations on the Working It Out page. They’re just waiting for you to follow suit.

With this round up of the week’s economic news, I’m Jon Greenberg.