tapered, challenged, and changed. (does anyone remember curtis enis?) us bank outlook forum december...
TRANSCRIPT
Tapered, Challenged, and Changed.
(Does anyone remember Curtis Enis?)
US Bank Outlook ForumDecember 9, 2014
Hart HodgesWestern Washington University
• Less Fiscal Drag• Employment Gains• Net Worth Rebound• Real Disposable Income Rising• Better Balance Sheets• State and Local Finances Better• Housing’s Unsteady Climb
• But!• Global Growth Worries Intensified-Impacts Through
Trade, Exchange Rates, Interest Rates, Commodity Prices
Improved National Forecast
Questions & Themes• Why the continued urbanization?– “The World is Flat”…
• Related:– Are we more urban or more rural?– Structural change, or just delayed growth?
• Getting behind aggregate and average figures– Population– Retail sales
Jan-07
Apr-07Ju
l-07
Oct-07
Jan-08
Apr-08Ju
l-08
Oct-08
Jan-09
Apr-09Ju
l-09
Oct-09
Jan-10
Apr-10Ju
l-10
Oct-10
Jan-11
Apr-11Ju
l-11
Oct-11
Jan-12
Apr-12Ju
l-12
Oct-12
Jan-13
Apr-13Ju
l-13
Oct-13
Jan-14
Apr-14Ju
l-14
85
90
95
100
105
110
Perc
ent
Seattle
Mt. VernB’Ham
Employment Growth:• Why the Difference ?
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
Uneven Recovery Across WashingtonEmployment Relative to Prerecession Peak
WA
B’Ham
Seattle
Copyright © 2014 Michael J. Parks
Washington highlights:• Above-average recent growth in key
indicators, including employment, personal income, auto sales.
• Boeing backlog at nearly 9 years and still growing.
• Led by Amazon.com, Seattle-area economy powers ahead.
Copyright © 2014 Michael J. Parks
Key risks for Washington:• Global economic slowdown that
could erode Boeing’s record backlog.
• Hard economic landing in China, Japan or Europe, or all three.
• Rising dollar and widened Panama Canal erode export competitiveness
Looking Back…
Jan-90
Jan-91
Jan-92
Jan-93
Jan-94
Jan-95
Jan-96
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14900,000
1,000,000
1,100,000
1,200,000
1,300,000
1,400,000
1,500,000
1,600,000
45,000
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
Jobs
, Sea
ttle
Jobs
, B’H
am
Seattle
B’Ham
Factors to Consider
• Larger industry trends• Population• Number and concentration of jobs in an area – Agglomeration (place matters)
• Wealth ?– Mobility– The freedom/ability to make lifestyle choices
Larger Industry Trends
Two industry sectors accounted for 45.2 percent of the net job growth over the last two years• Professional & Technical Services• Leisure & Hospitality
The geography of this job growth has been uneven, with significant implications for wage growth
Prof and Business Services
Jan-90
Dec-90
Nov-91
Oct-92
Sep-93
Aug-94Ju
l-95
Jun-96
May-97
Apr-98
Mar-9
9
Feb-00
Jan-01
Dec-01
Nov-02
Oct-03
Sep-04
Aug-05Ju
l-06
Jun-07
May-08
Apr-09
Mar-1
0
Feb-11
Jan-12
Dec-12
Nov-13100,000
120,000
140,000
160,000
180,000
200,000
220,000
240,000
2,500
3,500
4,500
5,500
6,500
7,500
8,500
9,500
Jobs
, Sea
ttle
Jobs
, B’H
am
Seattle
B’Ham
Population
• Variations in population growth in different regions
• Different regions appear to have different key cohorts– 25-34 year olds in King County– 35-44 year olds in Whatcom County
Average Annual Percent Change
1980 - 1989
1990 - 1999
2000 - 2009
2010 – 2013
2013
King 1.80 1.59 1.01 1.69 1.84
Skagit 2.16 2.96 1.37 0.49 0.66
Whatcom 1.68 2.93 1.96 0.80 0.69
Variation in Population Growth
Immigration and Emigration
Cohort 2002 2007 2012
25 - 29
30 - 34
35 - 39
Etc.
60 - 64
65 - 69
Cohort Differences
35
37
39
41
43
45
47
Mill
ion
Peop
le
25-34
35-44
Economic trends and demographics
Jan-90
Sep-90
May-91
Jan-92
Sep-92
May-93
Jan-94
Sep-94
May-95
Jan-96
Sep-96
May-97
Jan-98
Sep-98
May-99
Jan-00
Sep-00
May-01
Jan-02
Sep-02
May-03
Jan-04
Sep-04
May-05
Jan-06
Sep-06
May-07
Jan-08
Sep-08
May-09
Jan-10
Sep-10
May-11
Jan-12
Sep-12
May-13
Jan-14
Sep-14
100,000
120,000
140,000
160,000
180,000
200,000
220,000
240,000
2,500
3,500
4,500
5,500
6,500
7,500
8,500
9,500
Jobs
, Sea
ttle
Jobs
, B’H
am
B’Ham
Seattle
Wealth ?
Jan-90
Dec-90
Nov-91
Oct-92
Sep-93
Aug-94Ju
l-95
Jun-96
May-97
Apr-98
Mar-9
9
Feb-00
Jan-01
Dec-01
Nov-02
Oct-03
Sep-04
Aug-05Ju
l-06
Jun-07
May-08
Apr-09
Mar-1
0
Feb-11
Jan-12
Dec-12
Nov-13100,000
120,000
140,000
160,000
180,000
200,000
220,000
240,000
2,500
3,500
4,500
5,500
6,500
7,500
8,500
9,500
Jobs
, Sea
ttle
Jobs
, B’H
am
No Recovery in Construction
Const
Mfg
Retail
Info
Prof/Tech
Mngt
Health
Accom
Govt
-40 -30 -20 -10 0 10 20 30 40
Percent Change, 2005 - 2013
Seattle
B’Ham
Copyright © 2014 Michael J. Parks
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014$25000
$30000
$35000
$40000
$45000
$50000
$55000
$60000
$65000
$70000
King and Snohomish Counties
Rest of state
Where the money isAverage annual wage
Data: Bureau of Labor Statistics via Washington Economic and Revenue Forecast Council
Thousands
Percent of Jobs Seattle Wage
PremiumKing+ Whatcom
Software Developers, Applications
4.5(48,400 jobs)
0.4(255 jobs)
$28,500
Retail Salesperson 4.4 5.4
Cashiers 2.4 3.7
Food Prep & Serv (including Fast Food)
2.2 1.2
Computer Programmers 1.3 0.4 $34,500
Market Research Specialists 1.0 0.3 $25,000
Computer & Info System Mngrs 0.7 0.2 $46,800
Wage Growth Depends on Job Mix
Retail
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014$0
$100
$200
$300
$400
$500
$600
$700
$800
Mill
ion
$
Blaine, Sumas, & Uninc..
(Belling-ham)
2015• Employment – up ~1.5%
– Assuming continued strength nationally with lower oil prices and other factors (risks to the downside)
– Still trailing Seattle
• Population – slight increase in growth rate (~1%)
• Retail Sales – up 2-3%– Rising slightly with population and employment; also more even
in distribution
• Unemployment – continued slow decline
• Wages – up 3%– Assuming stronger job growth in Prof. & Tech Services