Unemployment & Underemployment

Napa County's unemployment rate for the month of June was 8.8, a rise from last month's rate of 8.3%. This is still below the national rate of 9.5% and state of California rate of 11.6% - both of which also were increases. However, there are some major issues that need to be noted. As we've mentioned our recovery from this recession will be a long protracted recovery - in my belief the most protracted recovery since the thirties. We will experience a number of setbacks along the way.

While our local unemployment looks good, the issue of "Under-employment" needs consideration. Under-employed people do not appear in the unemployment numbers as they have taken either lower paying jobs or part-time jobs. Yet the income of most of this part of the workforce is still not able to cover living expenses and debt obligations. Until this sector can get back to their normal income expectations, they will continue to experience a very tight financial situation. Some quote the under-employed numbers as high as 1 in 5, which is 20% (or even 1 in 4 or 25%). This group needs greater attention.

Secondly, commercial real estate still has issues, as does consumer spending - which affects our retail industry. More non-profits will either consolidate or go out of business - leaving more of our vulnerable without critical services. These sectors of the economy will continue to have a slow recovery. Again, we are fortunate to live here in Napa, and in the North Bay. But we should also realize there are a number of people here that still are hurting financially and need our support.

We Have the Power

As I’ve previously mentioned, it appears that we are nearing, or have reached the bottom of this recession. We see many indicators of the slow climb back up. Unemployment has dropped in Napa County for two months in a row. Hotel and restaurant business while still down, appears to have stemmed the decline and is showing some positive numbers, and the national economy also seems to making a turn for the better.

That said, we have the ability to make a bigger and faster difference here in our own community. What will have a major impact on our local economy is for you to join the Chamber of Commerce "You've Got the Power" drive to shop local. Rather than spend money out of town let's help the local businesses throughout our valley by buying locally. Local businesspeople live here and care about the community. The money you spend locally circulates more within the community, and most local businesses are big supporters of community schools and organizations. Even if you shop a chain store, make it a local one. Dollars spent locally help in so many ways, including paying the wages of local people who work at those businesses and keeping our friends and neighbors employed. I don’t need to tell you about the impact of healthy employment. Employed individuals will then spend locally – further helping our economy. This also helps generate tax revenues for our cities and county – helping forestall unemployment there as well.

So let's all do our part in helping Napa out of this recession...I look forward to seeing all of you shopping, dining, and enjoying all of what our local businesses have to offer. We Have the Power.

Bank Failures in Illinois & Texas

You may have heard that the FDIC took over seven banks yesterday - in Illinois and Texas. I'm sure the continued failure of banks is of grave concern to many of you. In studying the prime reason of their failure, one will note the significant concentration of development and construction loans at those banks. This is also true of the other 45 banks that have been closed so far this year. And most of those banks are located in Illinois, Georgia, Florida, Texas, Michigan and Southern California. These are states which had a “boom” housing and commercial development phase – now going “bust” this year.

An additional factor of bank failure is the weakness of the respective local economies. For example, the Illinois banks are just over 200 miles from Detroit - the home of the automobile industry. As I've noted before, though it appears that we have reached the bottom of this recession, unemployment will continue to rise for a few months. Bank failures will also continue to rise - as some banks have depleted much of their capital positions with losses

What does that say for community banks here in the Napa Valley? Well for one, we have minimal construction here in the Napa Valley. You don’t see bare 2x4’s in the air around our valley. The Unemployment Rate for Napa County has dropped for the second month in a row, perhaps also signaling the bottom of the recession for us. And each of the community banks here is in a well capitalized position. This sets the stage for these banks to have positive momentum coming out of this recession. To further study our local banks financial position, you can examine bank “call reports”, which are filed quarterly with the FDIC.

State of California WARRANTS

For our customers, Charter Oak Bank will cash certain State of California issued Registered Warrants (IOU’s). Each warrant will be subject to review and must have been received for services or goods, including payroll checks, and for non-profit customers that receive funding from the State. The Bank will not accept IOU’s that were issued for Tax Refunds or Unclaimed Property payments. Checks will be considered on a case by case basis.