Transcript State of the Cities - Colorado State University

State of the Cities
Denver Business Journal –
Mayors’ Economic Forecast
Professor Martin Shields
CSU Regional Economics Institute
US Employment Below 2007 Peak
1980
1974-76
1981-83
1990-93
2001-05
1997-present
months to recovery
Source: Current Employment Survey
Denver Employment 96 Percent of
Pre-Recessionary Levels
102%
100%
98%
Denver
MSA
96%
Great
Recession
94%
United States
92%
Sep-11
May-11
Jan-11
Sep-10
May-10
Jan-10
Sep-09
May-09
Jan-09
Sep-08
May-08
Jan-08
Sep-07
May-07
Jan-07
90%
Source: Current Employment Survey
Jan-01
Sep-01
May-02
Jan-03
Sep-03
May-04
Jan-05
Sep-05
May-06
Jan-07
Sep-07
May-08
Jan-09
Sep-09
May-10
Jan-11
Sep-11
Denver unemployed
Unemployment is Too Damn High
160,000
140,000
120,000
100,000
80,000
60,000
40,000
20,000
-
Source: Bureau of Labor Statistics
The Jobs Gap
Denver
MSA
Job change since peak
employment (spring 2008)
Jobs below potential
employment
Jan-11
Mar-10
May-09
Sep-07
Jul-08
Nov-06
Jan-06
Mar-05
May-04
Jul-03
Nov-01
Sep-02
1% growth
since last
year
Jan-01
1,280
1,260
1,240
1,220
1,200
1,180
1,160
1,140
1,120
1,100
-59,700
100,000+
Average employment growth
rate over last expansion
1.8%
Months to get to peak
employment at just plain old
optimistic growth rate
27
months
@ 2.0%
Months to get to potential
employment at wildly
optimistic growth rate
43
months
@ 3.0%
Looking Forward
GDP Growth Tepid, but Sustained
4%
3%
12 Month Change
2%
1%
0%
-1%
-2%
-3%
-4%
-5%
-6%
Source: US Department of Commerce
Mid-size Companies = Job Engines
80
70
net job change (x 1000)
60
50
40
30
20
10
0
1-4
5-9
10-19
20-49
50-99
100-249
750-499
500-999
1000+
-10
-20
-30
Size of firm (by employees)
Source: Bureau of Labor Statistics
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Jan-05
Jul-04
Jan-04
Jul-03
Jan-03
Jul-02
Jan-02
Jul-01
Jan-01
Jul-00
Jan-00
Jul-99
Jan-99
Jul-98
Jan-98
Jul-97
Jan-97
% Change in Price Level from 12 months earlier
3.5
Core Inflation Rate Back to
15-Year Average
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Source: Bureau of Labor Statistics
Local Industry Watch
Poised to grow
• Energy
• Health care
• Professional & business
services
• Wholesale trade
Continued struggles
• Government
• Financial activities
• Information
What about Construction?
Privately owned single unit
housing starts
• ‘Construction of buildings’
has stopped shedding jobs
2000
• Specialty trade contractors
employment up 300 over past
year
1800
1600
1400
1200
1000
800
• Architecture and engineering
adding jobs, too
600
400
200
Jan-88
May-89
Sep-90
Jan-92
May-93
Sep-94
Jan-96
May-97
Sep-98
Jan-00
May-01
Sep-02
Jan-04
May-05
Sep-06
Jan-08
May-09
Sep-10
0
• Related financial activities
still struggling
The Important Economic Issues
• Recovery Continues: Though at lackluster pace.
National and international performance remain a major
factor.
• Unemployment: Will remain relatively high but below
national average.
• Falling Household Income: Has had large negative
effects on the region.
2012 Outlook
I don’t always make
economic forecasts,
But when I do,
I am invariably wrong.
2012 Outlook
• New Jobs: The region could add between 12,000 and
16,000 jobs in 2012 (1.0% - 1.3%)
• Unemployment: Might drop to 7.1% (from 7.9 percent in
November)
• Wage Growth: Will keep pace with inflation, but
household incomes will remain stagnant
It’s Too Early to Declare Victory
Policy makers must remain committed to job
creation both locally and nationally!
Thank You
Dr. Martin Shields
Director, Regional Economics Institute
Colorado State University
970.491.2922
[email protected]
outreach.colostate.edu/rei