the washington labor market: is this a recovery or what?

1

The Washington Labor Market: Is This a Recovery or What?

To: Manufacturing and Wholesale Distribution Summit

By Greg Weeks, Ph.D., Director of Labor Market & Economic AnalysisSeptember 14-15, 2010Olympia, WA

2 2

Recessions History and Summary

Peak Trough

% Job Change,

US

% Job Change,

WA Duration Comment

1948 - Nov 1949 - Oct -5.0% -5.0% 11 1953 - Jul 1954 - May -3.1% -1.0% 10

1957 - Aug 1958 - Apr -4.0% -3.8% 8

1960 - Apr 1961 - Feb -2.3% -1.9% 10

1969 - Dec 1970 - Nov -1.2% -5.3% 11

1973 - Nov 1975 - Mar -1.6% -4.2% 16 1980 - Jan 1982 - Nov -2.2% -3.6% 34A double Dip1990 - Jul 1991 - Mar -1.1% 1.0% 8

2001 - Mar 2001 - Nov -1.2% -1.9% 8

2007 - Dec 2009 - Dec -6.1% -6.5% 24Started 2/08 in WA

2009 - Dec 2010 - Jul 0.5% 0.7% 7Recovery?

Timing of 2007 recession and recovery unofficial, by author

3

Mortgage Foreclosures Started: Nevada Mortgage Foreclosures Started: Arizona

Mortgage Foreclosures Started: WashingtonMortgage Foreclosures Started: U.S.

1009080706050403020100

Sources: MBA /Haver

4

3

2

1

0

4

3

2

1

0

Though foreclosures spiked in Washington, it was far less than in states with a bigger housing “bubble”

4

NASDAQ Composite Market CapitalizationBillions, $

NYSE Market Capitalization: Billions.$

1009080706050403020100Sources: NASDAQ, World Federation of Exchanges /Haver Analytics

20000

16000

12000

8000

4000

0

20000

16000

12000

8000

4000

0

Between these equity losses in value and home prices, US households lost nearly a year’s GDP

in paper wealth

5

US Quarterly Housing Starts: 1 Unit Structures 4-qtr Change Not Seasonally Adjusted, Thous.Units

1009080706050403020100

Source: Bureau of the Census /Haver Analytics

80

40

0

-40

-80

-120

-160

80

40

0

-40

-80

-120

-160

These data show the effects of the real estate financial crisis

6

Conference Board: Consumer ConfidenceSA, 1985=100

10050095908580Source: The Conference Board /Haver Analytics

150

125

100

75

50

25

150

125

100

75

50

25

Consumer confidence has recovered from record lows to “normal” recessionary levels

7

Nonagricultural Employment, WashingtonSeasonally Adjusted, Thousands

Nonfarm Employment, USSeasonally Agjusted, Thousands

1009080706050403020100Sources: Bureau of Labor Statistics /Haver Analytics

3000

2925

2850

2775

2700

2625

138000

136000

134000

132000

130000

128000

The recession hit both the nation and the state about equally hard

8

Nonfarm Employment, US (Dec. 2007 = 100)Seasonally Agjusted

Nonagricultural Employment, Washington (Dec. 2007 = 100)Seasonally Adjusted


102.5

100.0

97.5

95.0

92.5

90.0

87.5

102.5

100.0

97.5

95.0

92.5

90.0

87.5

Both Washington and the US shed over 6% of their jobs in the recession

9

Unemployment Rate, United StatesSeasonally Adjusted, %

Unemployment Rate, WashingtonSeasonally Adjusted, %


12

10

8

6

4

2

12

10

8

6

4

2

The Washington state unemployment rate has been just below the national rate throughout the recession

10

Unemployment Rate, United StatesSeasonally Adjusted, %

Unemployment Rate, WashingtonSeasonally Adjusted, %


12.5

10.0

7.5

5.0

2.5

12.5

10.0

7.5

5.0

2.5

Much of Washington’s recent history has seen its unemployment rate exceed the national rate

11

Unemployment Rate, Washington (Seasonally Adjusted, %)Unemployment Rate, OregonUnemployment Rate, Idaho

Unemployment Rate, California

1009080706050403020100Sources: BLS /Haver

14

12

10

8

6

4

2

14

12

10

8

6

4

2

Washington near the middle of the pack among state unemployment rates

12

Civilian Unemployment Rate: Women, 16 Years +Civilian Unemployment Rate: Men, 16 Years +

Civilian Unemployment Rate: 16 yr +


12

10

8

6

4

2

12

10

8

6

4

2

This recession hit men harder than women, US data

13

U.Rate: College Graduates: 25+ Years U.Rate: < Bachelor's Degree: 25+ Years

U.Rate: HS Diploma, No College: 25+ YearsU.Rate: < HS Diploma: 25+ Years


16

12

8

4

0

16

12

8

4

0

Recession hit less educated much harder, US data

14

Civilians Unemployed for 27 Weeks and OverSeasonally Adjusted, Thousands

Civilians Unemployed for Less Than 5 WeeksSeasonally Adjusted, Thousands


8000

6000

4000

2000

0

3750

3500

3250

3000

2750

2500

2250

Nationally, this recession was associated with unprecedented numbers of long term unemployed

15

+ Part Time Econ Reasons + Marginally Attached

+ Discouraged Workers US Civilian Unemployment Rate: (Seasonally Adjusted)


17.5

15.0

12.5

10.0

7.5

5.0

2.5

17.5

15.0

12.5

10.0

7.5

5.0

2.5

US measures of labor underutilization: what is the “real” unemployment rate?

16

State measures of labor underutilization: What is the “real” unemployment rate?

17

U. Rate: Wholesale and Retail Trade, USU.Rate: Manufacturing,, USU.Rate: Construction ,US


30

25

20

15

10

5

0

30

25

20

15

10

5

0

Construction and manufacturing industries hit particularly hard

18

Wholesale Trade Employment (Thousands)Manufacturing Employment (Thousands)Construction Employment (Thousands)


17500

15000

12500

10000

7500

5000

17500

15000

12500

10000

7500

5000

Construction and manufacturing shed over four million jobs during the recession

19

US Wholesale Trade Employment, December 2007 = 100US Manufacturing Employment, December 2007 = 100US Construction Employment, December 2007 = 100


130

120

110

100

90

80

70

130

120

110

100

90

80

70

Nationally, construction employment dropped 25% while manufacturing shed 15% of its employment

20

Durable manufactured goods more cyclical than nondurable manufactured goods

Washington Durable Goods Mfg. EmploymentSeasonally Adjusted

Washington Non-Durable Goods Mfg. EmploymentSeasonally Adjusted

10050095Sources: Haver Analytics

280000

240000

200000

160000

120000

80000

40000

280000

240000

200000

160000

120000

80000

40000

21

Mfrs' Shipments: All Manufacturing IndustriesSeasonally Adjusted, Millions $

All Employees: ManufacturingSeasonally Adjusted, Thousands

10050095908580757065Sources: Census Bureau/Haver Analytics, Bureau of Labor Statistics

500000

400000

300000

200000

100000

0

20000

18000

16000

14000

12000

10000

Manufacturers shipments have recovered more than employment

22

US Wholesale Trade Employment (left)Seasonally Adjusted, Thousands

US Merchant Wholesale Sales: (right)Seasonally Adjusted, Millions $

1005009590858075Sources: Bureau of Labor Statistics, Census Bureau/Haver Analytics

6750

6000

5250

4500

3750

3000

400000

300000

200000

100000

0

Nationally, wholesale sales have recovered stronger than employment

23

All Employees: Wholesale Trade, Washington 3-month avg Change SA

All Employees: Wholesale Trade, Washington 1-month Change SA


1200

800

400

0

-400

-800

-1200

1500

750

0

-750

-1500

-2250

Anemic recovery in wholesale trade employment

24

Washington state lost 192,700 jobs during the recession (Feb 2008 – Dec 2009)

All Employees: Total Nonfarm, Washington 3-month avg Change, Seasonally Adjusted

All Employees: Total Nonfarm, Washington 1-month Change, Seasonally Adjusted


40000

20000

0

-20000

-40000

40000

20000

0

-20000

-40000

25

All Employees: Service-Providing, Washington200712=100

All Employees: Goods-Producing, Washington200712=100


104

100

96

92

88

84

80

104

100

96

92

88

84

80

Within the state, the goods producing industries dropped about one-fifth of their employment

26

All Employees: Manufacturing, Washington200712=100

All Employees: Construction, Washington200712=100


120

110

100

90

80

70

60

120

110

100

90

80

70

60

In Washington, construction lost over 35% of its employment while manufacturing dropped 15%

27

These industries may have bottomed out

Washington Professional & Business Svces EmploymentSeasonally Adjusted

Washington: Retail Trade EmploymentSeasonally Adjusted


360000

320000

280000

240000

200000

160000

360000

320000

280000

240000

200000

160000

28

These industries weathered the recession with no major job losses

All Employees: Educational & Health Svcs, WashingtonSeasonally Adjusted

All Employees: Information, WashingtonSeasonally Adjusted


400000

300000

200000

100000

0

400000

300000

200000

100000

0

29

US Professional & Business Service EmploymentDecember 2007 = 100

US Retail Trade EmploymentDecember 2007 = 100


100.0

97.5

95.0

92.5

90.0

87.5

100.0

97.5

95.0

92.5

90.0

87.5

These industries lost about eight percent of their employment, but business services is stronger lately

30

WA Specialty Trade Contractors, Dec. 2007 = 100WA Hvy and Civil Engineering Constr, Dec. 2007 = 100

WA Construction of Buildings, Dec. 2007 = 100


105.0

97.5

90.0

82.5

75.0

67.5

60.0

105.0

97.5

90.0

82.5

75.0

67.5

60.0

Washington heavy and civil engineering construction employment may have bottomed out

31

All Employees: Leisure & Hospitality, WashingtonDecember 2007 = 100

All Employees: Educational & Health Svcs, WashingtonDecember 2007 = 100


112.5

105.0

97.5

90.0

82.5

75.0

112.5

105.0

97.5

90.0

82.5

75.0

Health services employment remained relatively strong throughout the recession

32 32

Total, all industries - Hires: Washington 4-qtr MovingAverage

090807060504030201009998979695

Source: Haver Analytics

640000

600000

560000

520000

480000

440000

400000

640000

600000

560000

520000

480000

440000

400000

Washington statewide hiring dropped substantially, but did not disappear during the recession

33

Washington Hires, Wholesale Trade (4 qtr ave)Washington Hires, Manufacturing (4 qtr ave)Washington Hires, Construction (4 qtr ave)

090807060504030201009998979695

Sources: Haver Analytics

60000

50000

40000

30000

20000

10000

60000

50000

40000

30000

20000

10000

Washington labor markets are dynamic -- hiring happens even in the depths of recession

34

Washington Local Employment Dynamics: employment and new hires, by sector

Source: Local Employment Dynamics Partnership, US Census Bureau and LMEA, ESD

35

Greg Weeks, Email: [email protected](360) 438-4804www.workforceexplorer.com

Thank you for your time and attention. Please direct any additional questions, comments, or suggestions to

me at the email or telephone number below

the washington labor market: is this a recovery or what?

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