the great recession and its lasting impacts

1

The Great Recession and its Lasting Impacts

Mark A. Berreth, Regional Economist, LMEA Sept. 28, 2011

2

Washington nonagricultural employment

Seasonally adjustedU.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

Sep-

09O

ct-0

9N

ov-0

9D

ec-0

9Ja

n-10

Feb-

10M

ar-1

0A

pr-1

0M

ay-1

0Ju

n-10

Jul-1

0A

ug-1

0Se

p-10

Oct

-10

Nov

-10

Dec

-10

Jan-

11Fe

b-11

Mar

-11

Apr

-11

May

-11

Jun-

11Ju

l-11

Aug

-11

-10,000

-5,000

0

5,000

10,000

Washington 3-month average

Cha

nge

in e

mpl

oym

ent


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


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


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

Sep-

06D

ec-0

6M

ar-0

7Ju

n-07

Sep-

07D

ec-0

7M

ar-0

8Ju

n-08

Sep-

08D

ec-0

8M

ar-0

9Ju

n-09

Sep-

09D

ec-0

9M

ar-1

0Ju

n-10

Sep-

10D

ec-1

0M

ar-1

1Ju

n-11

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

Washington

U.S.

Seattle

Unem

ploy

men

t rat

e


11

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

Rank State Rate1 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 Rate42 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%


13

Third decile of states by unemployment rate

Rank State Rate31 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%


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%



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 Statistics111009082007

17.5%

15%

12.5%

10%

7.5%

5%

2.5%

Alternative measures of labor underutilizationUnemployed+marginally attached+part-time

for economic reasonsUnemployed + marginally attached

Unemployed + discouraged workersUnemployment rate: Age 16+

(Seasonally adjusted)


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%


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 IndexWashington 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

Quart

er 4

1992

Quart

er 4

1994

Quart

er 4

1996

Quart

er 4

1998

Quart

er 4

2000

Quart

er 4

2002

Quart

er 4

2004

Quart

er 4

2006

Quart

er 4

2008

Quart

er 4

2010

Quart

er 450.00

70.00

90.00

110.00

130.00

Fourth-quarter new hires

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


23

Hiring takes place throughout the economy

Accommodati

on and Food Serv

ices

Administrat

ive an

d Was

te Serv

ices

Agricultu

re, Fores

try, F

ishing &

Huntin

g

Constructi

on

Educatio

nal Serv

ices

Finance

and In

suran

ce

Health

Care

and Socia

l Ass

istan

ce

Inform

ation

Manufac

turin

g

Other

Service

s, Ex.

Public A

dmin

Profes

sional

and Tec

hnical S

ervice

s

Public A

dministrat

ion

Retail T

rade

Transp

ortatio

n and W

arehousin

g

Wholesale

Trade

0

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 employment2010 Q4 beginning of qtr employment 2008 Q4 accessions2009 Q4 accessions 2010 Q4 accessions


24

Job creation and destruction in WA



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


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



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

OFFICE AND ADMIN

ISTRATIVE SUPPORT

SALES AND R

ELATED

FOOD PREPARATION AND SERVIN

G RELA

TED

TRANSPORTATION AND M

ATERIAL MOVIN

G

HEALTHCARE PRACTITIO

NERS AND TECHNICAL

EDUCATION TRAIN

ING AND LI

BRARY

CONSTRUCTION AND EXTRACTIO

N

MANAGEMENT

PERSONAL CARE AND SERVIC

E

COMPUTER AND MATHEMATIC

AL0

2000400060008000

1000012000140001600018000

$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 AND FIN

ANCIAL OPERATIO

NS

PRODUCTION

BUILDIN

G AND GROUNDS C

LEANIN

G AND MAIN

T.

INSTALL

ATION M

AINTENANCE AND R

EPAIR

ARCHITECTURE AND ENGINEERIN

G

HEALTHCARE SUPPORT

ARTS DESIG

N ENTERTAINMNT SPORTS AND M

EDIA

LIFE PHYSIC

AL AND SOCIAL S

CIENCE

FARMING FISHIN

G AND FORESTRY

PROTECTIVE SERVICE

COMMUNITY AND SOCIAL SERVIC

ES

LEGAL

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?

the great recession and its lasting impacts

Documents

employment growth

industry employment

agriculture employment

census bureau

aerospace product

unemployment ratesource

annual rate

consumer confidenceaug