1. Tapered, Challenged, and Changed. (Does anyone remember Curtis Enis?) US Bank Outlook Forum December 9, 2014 Hart Hodges Western Washington University

2. Less Fiscal Drag Employment Gains Net Worth Rebound Real Disposable Income Rising Better Balance Sheets State and Local Finances Better Housing’s Unsteady Climb But! Global Growth Worries Intensified-Impacts Through Trade, Exchange Rates, Interest Rates, Commodity Prices Improved National Forecast

3. Questions & Themes Why the continued urbanization? – “The World is Flat”… Related: – Are we more urban or more rural? – Structural change, or just delayed growth? Getting behind aggregate and average figures – Population – Retail sales

4. Employment Growth: Why the Difference ?

5. Seattle

6. Copyright © 2014 Michael J. Parks Washington highlights: Above-average recent growth in key indicators, including employment, personal income, auto sales. Boeing backlog at nearly 9 years and still growing. Led by Amazon.com, Seattle-area economy powers ahead.

7. Copyright © 2014 Michael J. Parks Key risks for Washington: Global economic slowdown that could erode Boeing’s record backlog. Hard economic landing in China, Japan or Europe, or all three. Rising dollar and widened Panama Canal erode export competitiveness

9. Looking Back… Seattle B’Ham

10. Factors to Consider Larger industry trends Population Number and concentration of jobs in an area – Agglomeration (place matters) Wealth ? – Mobility – The freedom/ability to make lifestyle choices

11. Larger Industry Trends Two industry sectors accounted for 45.2 percent of the net job growth over the last two years Professional & Technical Services Leisure & Hospitality The geography of this job growth has been uneven, with significant implications for wage growth

12. Prof and Business Services Seattle B’Ham

13. Population Variations in population growth in different regions Different regions appear to have different key cohorts – 25-34 year olds in King County – 35-44 year olds in Whatcom County

14. Average Annual Percent Change 1980 - 1989 1990 - 1999 2000 - 2009 2010 – 2013 2013 King 1.801.591.011.691.84 Skagit 2.162.961.370.490.66 Whatcom 1.682.931.960.800.69 Variation in Population Growth

15. Immigration and Emigration Cohort200220072012 25 - 29 30 - 34 35 - 39 Etc. 60 - 64 65 - 69

17. Cohort Differences

18. Economic trends and demographics Seattle

19. Wealth ?

20. No Recovery in Construction

21. Copyright © 2014 Michael J. Parks

22. Percent of JobsSeattle Wage Premium King+Whatcom Software Developers, Applications 4.5 (48,400 jobs) 0.4 (255 jobs) $28,500 Retail Salesperson4.45.4 Cashiers2.43.7 Food Prep & Serv (including Fast Food) 2.21.2 Computer Programmers1.30.4$34,500 Market Research Specialists1.00.3$25,000 Computer & Info System Mngrs 0.70.2$46,800 Wage Growth Depends on Job Mix

23. Retail

24. 2015 Employment – up ~1.5% – Assuming continued strength nationally with lower oil prices and other factors (risks to the downside) – Still trailing Seattle Population – slight increase in growth rate (~1%) Retail Sales – up 2-3% – Rising slightly with population and employment; also more even in distribution Unemployment – continued slow decline Wages – up 3% – Assuming stronger job growth in Prof. & Tech Services