Why do my Java variables need to be implemented this way?

Question

I am learning Java. I am painstakingly learning the fundamentals of Java GUI. I made a "counter" program, which increments a variable by 1 every time you click a button.

import java.awt.*;
import javax.swing.*;
import java.awt.event.*;
    
public class guitry implements ActionListener {
    int counter = 0;

    public guitry() {
        JFrame frame = new JFrame("FrameDemo");
        JPanel panel = new JPanel(new FlowLayout(1));
        JLabel label = new JLabel("Clicked " + counter + " times");
        JButton button = new JButton("CLick me");
        panel.add(button);
        panel.add(label);
        frame.setDefaultCloseOperation(frame.EXIT_ON_CLOSE);

        frame.setContentPane(panel);
        frame.pack();
        frame.setVisible(true);
        System.out.println(panel.getLayout());
        button.addActionListener(this);
    }

    public void actionPerformed(ActionEvent e) {
        counter++;
        System.out.println("clicked");
        label.setText("Clicked " + counter + " times");
    }

    public static void main(String[] args) {
        new guitry(); 
    }

}

This code fails by "cannot find symbol" at line 27 in the action listener.

label.setText("Clicked " + counter + " times");

After stumbling upon an example that approaches the same task as me, it does this in the declarations so the action listener works:

import java.awt.*;
import javax.swing.*;
import java.awt.event.*;
    
public class guitry implements ActionListener {
    int counter = 0;
    JLabel label; <----------------------------------------

    public guitry() {
        JFrame frame = new JFrame("FrameDemo");
        JPanel panel = new JPanel(new FlowLayout(1));
        label = new JLabel("Clicked " + counter + " times"); <----------------------
        JButton button = new JButton("CLick me");
        panel.add(button);
        panel.add(label);
        frame.setDefaultCloseOperation(frame.EXIT_ON_CLOSE);

        frame.setContentPane(panel);
        frame.pack();
        frame.setVisible(true);
        System.out.println(panel.getLayout());
        button.addActionListener(this);
    }

    public void actionPerformed(ActionEvent e) {
        counter++;
        System.out.println("clicked");
        label.setText("Clicked " + counter + " times");
    }

    public static void main(String[] args) {
        new guitry(); 
    }

}

I am absolutely gobsmacked as to why this works and am very lost. Thanks in advance for any answers.