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 ?
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%
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
$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
Prof & Business Services
12 34 0 16 8 8 na 0
A Slow Recovery ?
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 !