1

The Great Recession and its Lasting Impacts

Mark A. Berreth, Regional Economist, LMEA

Sept. 28, 2011

2

Washington nonagricultural employment

Seasonally adjusted

U.S. nonagricultural employment (in thousands)

1110090807060504030201

3,000,000

2,925,000

2,850,000

2,775,000

2,700,000

2,625,000

138,000

136,000

134,000

132,000

130,000

128,000

Source: Employment Security Department/LMEA, Bureau of Labor Statistics

Job growth

3

Employment growth for WA

Se

p-0

9O

ct-

09

No

v-0

9D

ec

-09

Ja

n-1

0F

eb

-10

Ma

r-1

0A

pr-

10

Ma

y-1

0J

un

-10

Ju

l-1

0A

ug

-10

Se

p-1

0O

ct-

10

No

v-1

0D

ec

-10

Ja

n-1

1F

eb

-11

Ma

r-1

1A

pr-

11

Ma

y-1

1J

un

-11

Ju

l-1

1A

ug

-11

-10,000

-5,000

0

5,000

10,000

Washington 3-month average

Ch

ang

e in

em

plo

ymen

t

Source: Employment Security Department/LMEA, Bureau of Labor Statistics

4

Employment growth by industry in WA

Month-over-month change by industrySeasonally adjusted

July 2011 to August 2011Total nonfarm 3,800Manufacturing 3,500 Aerospace product and parts manufacturing 600Education and health services 2,000Information 1,800Construction 1,400Retail trade 400Other services 400Professional and business services 100Mining and logging 0Transportation, warehousing and utilities -100Government -400Leisure and hospitality -1,300Wholesale trade -1,600Financial activities -2,400

Source: Employment Security Department/LMEA, Bureau of Labor Statistics

5

Industry employment in WA

Year-over-year change by industry Seasonally adjusted

August 2010 to August 2011Total nonfarm 46,600Professional and business services 13,400Manufacturing 12,200 Aerospace product and parts manufacturing 7,500Education and health services 7,500Retail trade 5,900Leisure and hospitality 4,700Transportation, warehousing and utilities 4,000Wholesale trade 2,800Information 2,100Other services 1,800Construction 900Mining and logging 100Financial activities -2,200Government -6,600

Source: Employment Security Department/LMEA, Bureau of Labor Statistics

6 Source: Employment Security Department/LMEA

Total covered agriculture employment 12-month moving average, Washington state

1009080706050403020100

104,000

100,000

96,000

92,000

88,000

84,000

104,000

100,000

96,000

92,000

88,000

84,000

Agricultural employment in WA

7 Source: Employment Security Department/LMEA, Bureau of Economic Analysis

Slow GDP growth

U.S. Gross Domestic ProductSeasonally adjusted, annual rate, $ in billions

1110090807060504030201009998

16,000

14,000

12,000

10,000

8,000

16,000

14,000

12,000

10,000

8,000

8 Source: Employment Security Department/LMEA, Bureau of Economic Analysis

Personal consumption expendituresGross private domestic investment

Seasonally adjusted, annual rate, billions $

100500959085807570656055

12,000

10,000

8,000

6,000

4,000

2,000

0

12,000

10,000

8,000

6,000

4,000

2,000

0

Private investment spending lags consumer spending

9 Source: Employment Security Department/LMEA, The Conference Board

U.S. Consumer ConfidenceAug. 2011 = 44.5, seasonally adjusted, 1985=100

100500959085

150

125

100

75

50

25

150

125

100

75

50

25

Consumer confidence

10

Unemployment rate

Se

p-0

6

De

c-0

6

Ma

r-0

7

Ju

n-0

7

Se

p-0

7

De

c-0

7

Ma

r-0

8

Ju

n-0

8

Se

p-0

8

De

c-0

8

Ma

r-0

9

Ju

n-0

9

Se

p-0

9

De

c-0

9

Ma

r-1

0

Ju

n-1

0

Se

p-1

0

De

c-1

0

Ma

r-1

1

Ju

n-1

1

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

Washington

U.S.

Seattle

Un

em

plo

ym

en

t ra

te

Source: Employment Security Department/LMEA, Bureau of Labor Statistics

11

Top 10 states by lowest July 2011 unemployment rates, seasonally adjusted

Rank State Rate

1 North Dakota 3.3%

2 Nebraska 4.1%

3 South Dakota 4.7%

4 New Hampshire 5.2%

5 Oklahoma 5.5%

6 Vermont 5.7%

7 Wyoming 5.8%

8 Iowa 6.0%

9 Hawaii 6.1%

9 Virginia 6.1%

Source: Employment Security Department/LMEA, U.S. Census Bureau

12

Bottom 10 states by July 2011 unemployment rates, seasonally adjusted

Rank State Rate

42 Georgia 10.1%

42 North Carolina 10.1%

44 Mississippi 10.4%

45 Florida 10.7%

46 District of Columbia 10.8%

46 Rhode Island 10.8%

48 Michigan 10.9%

48 South Carolina 10.9%

50 California 12.0%

51 Nevada 12.9%

Source: Employment Security Department/LMEA, U.S. Census Bureau

13

Third decile of states by unemployment rate

Rank State Rate

31 Ohio 9.0%

32 Connecticut 9.1%

33 Washington 9.3%

34 Arizona 9.4%

34 Idaho 9.4%

36 Illinois 9.5%

36 Kentucky 9.5%

36 New Jersey 9.5%

36 Oregon 9.5%

40 Tennessee 9.8%

Source: Employment Security Department/LMEA, Bureau of Labor Statistics

14 Source: Employment Security Department/LMEA, Bureau of Labor Statistics

College grads Less than bachelor's degreeHS diploma, no college Less than HS diploma

1110090807060504030201

16

12

8

4

0

16

12

8

4

0

Unemployment rates by education level, in U.S.

For ages 25 and up

15

Washington population educational attainment, 2009

Graduate or professional degree

Bachelors degree

Some college or associates degree

High school graduate

Less than high school diploma

0% 5% 10% 15% 20% 25% 30% 35% 40%

11.1%

19.9%

34.6%

24.0%

10.3%

Source: Employment Security Department/LMEA, U.S. Census Bureau

16 Source: Employment Security Department/LMEA, Bureau of Labor Statistics

All working-age men

1110092008

28%

24%

20%

16%

12%

8%

4%

28%

24%

20%

16%

12%

8%

4%

Youths: 16-19 years

All working-age women

Youth unemployment rates in U.S.

Men & women of all ages compared to youths aged 16-19 years

17 Source: Employment Security Department/LMEA, Bureau of Labor Statistics

111009082007

17.5%

15%

12.5%

10%

7.5%

5%

2.5%

Alternative measures of labor underutilization

Unemployed+marginally attached+part-time for economic reasons

Unemployed + marginally attachedUnemployed + discouraged workers

Unemployment rate: Age 16+

(Seasonally adjusted)

18 Source: Employment Security Department/LMEA, Bureau of Labor Statistics

Service-providing industryGoods-producing industry

111009080706050403022001

2,475,000

2,400,000

2,325,000

2,250,000

2,175,000

520,000

500,000

480,000

460,000

440,000

420,000

400,000

Jobs in goods-producing sectors in WA

19

Service-providing industryGoods-producing industry

111009080706050403022001

105%

100%

95%

90%

85%

80%

75%

Jobs in goods-producing sectors in WA

Source: Employment Security Department/LMEA

As a percent of December 2007 employment105%

100%

95%

90%

85%

80%

75%

Dec. 2007 = 100%

20 Source: Employment Security Department/LMEA, Bureau of Labor Statistics

Washington:Construction

Manufacturing

U.S.: Construction Manufacturing

111009080706050403022001

140%

120%

100%

80%

60%

140%

120%

100%

80%

60%

Employment over time

As a percent of December 2007 employmentDec. 2007 = 100%

21 Source: Employment Security Department/LMEA, Zillow

Zillow Housing Index

Washington Arizona Nevada California

111009080706050403022001

140%

120%

100%

80%

60%

40%

140%

120%

100%

80%

60%

40%

No recovery in home prices

Dec. 2007 = 100%

22

New hires for youths drop faster

1990 Q

uarter 4

1992 Q

uarter 4

1994 Q

uarter 4

1996 Q

uarter 4

1998 Q

uarter 4

2000 Q

uarter 4

2002 Q

uarter 4

2004 Q

uarter 4

2006 Q

uarter 4

2008 Q

uarter 4

2010 Q

uarter 4

50.00

70.00

90.00

110.00

130.00

Fourth-quarter new hires

Total Age 65+ Age 19-21Dec. 2007 = 100%

Source: Employment Security Department/LMEA, U.S. Census Bureau

23

Hiring takes place throughout the economy

Accom

modat

ion a

nd Food S

ervi

ces

Admin

istra

tive

and W

aste

Ser

vice

s

Agricultu

re, F

orest

ry, F

ishin

g & H

unting

Constru

ctio

n

Educatio

nal S

ervi

ces

Finan

ce a

nd Insu

rance

Health

Car

e an

d Soci

al A

ssis

tance

Info

rmat

ion

Man

ufact

uring

Oth

er S

ervi

ces,

Ex.

Public

Adm

in

Profe

ssio

nal a

nd Tec

hnical

Ser

vice

s

Public A

dmin

istra

tion

Retai

l Tra

de

Transp

ortatio

n and W

areh

ousing

Whole

sale

Tra

de0

100,000

200,000

300,000

400,000

0

20,000

40,000

60,000

80,000

New hires and beginning of fourth-quarter employment, selected industries,

2008, 2009, 2010

2008 Q4 beginning of qtr employment 2009 Q4 beginning of qtr employment

2010 Q4 beginning of qtr employment 2008 Q4 accessions

2009 Q4 accessions 2010 Q4 accessions

Source: Employment Security Department/LMEA, U.S. Census Bureau

24

Job creation and destruction in WA

Source: Employment Security Department/LMEA, Bureau of Labor Statistics

25 Source: Employment Security Department/LMEA, Bureau of Labor Statistics

U.S. labor force participation rateWashington state labor force participation rate

Seasonally adjusted, %

10050095908580757065

72.5

70.0

67.5

65.0

62.5

60.0

57.5

72.5

70.0

67.5

65.0

62.5

60.0

57.5

Labor force participation rate remains near 25 year low

26 Source: Employment Security Department/LMEA, Bureau of Labor Statistics

U.S. labor force participation rate: 55 years & overU.S. labor force participation rate: 25-54 years U.S. labor force participation rate: 16 - 24 years

1005009590858075

100

80

60

40

20

100

80

60

40

20

Older workers working longer, pushing up their labor force participation rate

27

U.S. employment-population ratio

Seasonally adjusted, %WA employment-population ratio

1110090807060504030201

66

64

62

60

58

66

64

62

60

58

Washington’s employment to population ratio mirrors the nation

Source: Employment Security Department/LMEA, Bureau of Labor Statistics

28 Source: Employment Security Department/LMEA, Bureau of Labor Statistics

Employment-population ratio: menEmployment-population ratio: women

Seasonally adjusted, %

10050095908580757065

80

70

60

50

40

30

80

70

60

50

40

30

Employment to population ratios have yet to recover

29

Top ten occupational groups by projected annual openings, 2014-2010

OFFIC

E AND A

DMIN

ISTRATIV

E SUPPO

RT

SALES A

ND RELA

TED

FOO

D PREPARATIO

N AND S

ERVING

RELA

TED

TRANSPORTATIO

N AND M

ATERIAL

MO

VING

HEALTHCARE P

RACTITIO

NERS AND T

ECHNICAL

EDUCATION T

RAININ

G A

ND LIB

RARY

CONSTRUCTIO

N AND E

XTRACTION

MANAG

EMENT

PERSONAL

CARE AND S

ERVICE

COM

PUTER AND M

ATHEMATIC

AL0

2000

4000

6000

8000

10000

12000

14000

16000

18000

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

Source: Employment Security Department/LMEA,

30

Other occupational group by projected annual openings, 2014-2019

BUSINESS A

ND FIN

ANCIAL

OPERATIO

NS

PRODUCTIO

N

BUILDIN

G A

ND GRO

UNDS CLE

ANING

AND M

AINT.

INSTALL

ATION M

AINTENANCE A

ND REPAIR

ARCHITECTURE A

ND ENG

INEERIN

G

HEALTHCARE S

UPPORT

ARTS DESIG

N ENTERTAIN

MNT S

PORTS A

ND MEDIA

LIFE P

HYSICAL

AND SO

CIAL

SCIENCE

FARMIN

G F

ISHIN

G A

ND FO

RESTRY

PROTECTIV

E SERVIC

E

COM

MUNIT

Y AND S

OCIA

L SERVIC

ES

LEG

AL 0

1000

2000

3000

4000

5000

6000

7000

$0.00

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

$40.00

$45.00

Source: Employment Security Department/LMEA,

31

Questions?