tapered, challenged, and changed. (does anyone remember curtis enis?) us bank outlook forum december...
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![Page 1: Tapered, Challenged, and Changed. (Does anyone remember Curtis Enis?) US Bank Outlook Forum December 9, 2014 Hart Hodges Western Washington University](https://reader036.vdocument.in/reader036/viewer/2022070415/56649d345503460f94a0ab5d/html5/thumbnails/1.jpg)
Tapered, Challenged, and Changed.
(Does anyone remember Curtis Enis?)
US Bank Outlook ForumDecember 9, 2014
Hart HodgesWestern Washington University
![Page 2: Tapered, Challenged, and Changed. (Does anyone remember Curtis Enis?) US Bank Outlook Forum December 9, 2014 Hart Hodges Western Washington University](https://reader036.vdocument.in/reader036/viewer/2022070415/56649d345503460f94a0ab5d/html5/thumbnails/2.jpg)
• 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
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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
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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 ?
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-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
Uneven Recovery Across WashingtonEmployment Relative to Prerecession Peak
WA
B’Ham
Seattle
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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.
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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
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![Page 9: Tapered, Challenged, and Changed. (Does anyone remember Curtis Enis?) US Bank Outlook Forum December 9, 2014 Hart Hodges Western Washington University](https://reader036.vdocument.in/reader036/viewer/2022070415/56649d345503460f94a0ab5d/html5/thumbnails/9.jpg)
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
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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
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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
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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
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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
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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
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Immigration and Emigration
Cohort 2002 2007 2012
25 - 29
30 - 34
35 - 39
Etc.
60 - 64
65 - 69
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Cohort Differences
35
37
39
41
43
45
47
Mill
ion
Peop
le
25-34
35-44
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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
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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
![Page 20: Tapered, Challenged, and Changed. (Does anyone remember Curtis Enis?) US Bank Outlook Forum December 9, 2014 Hart Hodges Western Washington University](https://reader036.vdocument.in/reader036/viewer/2022070415/56649d345503460f94a0ab5d/html5/thumbnails/20.jpg)
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
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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
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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
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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)
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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