Transcript Document

Uneven Trends Beneath the Headlines US Bank Outlook Forum Hart Hodges Center for Economic and Business Research Western Washington University December 11, 2012

Outline  Risks are easy to find – Impacts are hard to forecast  The fear is often worse than the actual event  Coming out of the recession – the signals for our region are a bit muddy  Differences between major metro and other areas may be growing  Programs designed to improve the job market lack a solid foundation  Outlook:   Continued slow growth and uncertainty Pay attention to differences in economic growth across industry sectors, geography, and age groups

Structural or Cyclical ?

Inflation ?

What to Do ?

CBO Forecast (% of GDP)

Impact of Next Event ?

Overview – Basic Stats

King Skagit Whatcom

Jobs Population (2011) 1.45 mm 45,000 1.97 mm 118,000 Median Household Income Unemployment $68,775 7.4% $52,519 9.3% 85,000 203,660 $51,500 7.4%

Border Crossings

Influence of the Canadian $  Costco   50% of all revenue received Gas station is in the top 5 for the US  More milk sales than any other Costco  Target  50% of all sales  Fred Meyer  30-50% of sales at Bakerview; less than 30% Lakeway  Skagit  Estimates Forthcoming

Retail Sales

$600 $550 $500 $450 $400 $900 $850 $800 $750 $700 $650 Skagit Whatcom $600 $550 $500 $450 $400 $350 $300

Job Growth in the Region…

Profession & Business Service Jobs

Seattle MSA Bellingham MSA Mt. Vernon MSA Share of Job Growth (%) 2010 to present

Mfg

22 34

Const.

3

Prof & Business Services

25

Retail

12 34 0 16 8 8 na 0

Construction Jobs

A Slow Recovery ?

Productivity

Real GDP JOBS

“Theories” About Job Creation  Small businesses create most jobs  Start-ups create most jobs  Clusters are essential for job creation  “Second Stage” companies create most jobs  part of “economic gardening”

Testing the Theories Job Growth Firm Age Firm Size Industry Sector Location (county) Average Wage

Findings… So Far  You can get any result you want    Change how you measure job growth Change how you account for time or size Etc.

 Very, very little explanatory power in the models !

 Concern: Very little foundation for job creation programs… which means good results only by luck

Conclusions  Efforts to increase job creation may not be that helpful  The labor force has gotten smaller and older  with differences in the job mix in major metro areas versus smaller areas  Job growth in this region may continue to lag behind Seattle in the near-term (it could be worse)  Slower population growth suggests slower growth in retail sales

Thank You !

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