1 The Washington Labor Market: Is This a Recovery or What? To: Manufacturing and Wholesale Distribution Summit By Greg Weeks, Ph.D., Director of Labor Market & Economic Analysis September 14-15, 2010 Olympia, WA

2 2 Recessions History and Summary PeakTrough % Job Change, US % Job Change, WADurationComment Nov Oct-5.0% Jul May-3.1%-1.0% Aug Apr-4.0%-3.8% Apr Feb-2.3%-1.9% Dec Nov-1.2%-5.3% Nov Mar-1.6%-4.2% Jan Nov-2.2%-3.6%34A double Dip Jul Mar-1.1%1.0% Mar Nov-1.2%-1.9% Dec Dec-6.1%-6.5%24Started 2/08 in WA Dec Jul0.5%0.7%7Recovery? Timing of 2007 recession and recovery unofficial, by author

3 * Mortgage Foreclosures Started: Nevada –NSA, % Mortgage Foreclosures Started: Arizona –NSA, % mortforclosure.EMF (MBAMTG) NVL14F / AZL14F Though foreclosures spiked in Washington, it was far less than in states with a bigger housing “bubble”

4 * NASDAQ Composite Market Capitalization –Billions, $ NYSE Market Capitalization: –Billions.$ mktcatnysenasdaq.EMF (USECON) SPNACAP / SPNYCAPH Between these equity losses in value and home prices, US households lost nearly a year’s GDP in paper wealth

5 * US Quarterly Housing Starts: 1 Unit Structures – 4-qtr Change Not Seasonally Adjusted, Thous.Units ushsingstarts.EMF (USECON) HST1Q These data show the effects of the real estate financial crisis

6 * Conference Board: Consumer Confidence –SA, 1985=100 consconf.EMF (USECON) CCIN Consumer confidence has recovered from record lows to “normal” recessionary levels

7 * Nonagricultural Employment, Washington –Seasonally Adjusted, Thousands Nonfarm Employment, US –Seasonally Agjusted, Thousands nonaguswa.EMF (LABORR) WALNAGRA / LANAGRA The recession hit both the nation and the state about equally hard

8 * Nonfarm Employment, US (Dec = 100) –Seasonally Agjusted Nonagricultural Employment, Washington (Dec = 100) –Seasonally Adjusted LANAGRAindex.EMF (LABORR) LANAGRA / WALNAGRA Both Washington and the US shed over 6% of their jobs in the recession

9 * Unemployment Rate, United States –Seasonally Adjusted, % Unemployment Rate, Washington –Seasonally Adjusted, % WAUSUR.EMF (EMPLR) USRA / WARA The Washington state unemployment rate has been just below the national rate throughout the recession

10 * Unemployment Rate, United States –Seasonally Adjusted, % Unemployment Rate, Washington –Seasonally Adjusted, % USRALon gterm.EMF (EMPLR) USRA / WARA Much of Washington’s recent history has seen its unemployment rate exceed the national rate

11 * Unemployment Rate, Washington (Seasonally Adjusted, %) –SA, % Unemployment Rate, Oregon –SA, % atatesurs.EMF (EMPLR) WARA / ORRA Washington near the middle of the pack among state unemployment rates

12 * Civilian Unemployment Rate: Women, 16 Years + –SA, % Civilian Unemployment Rate: Men, 16 Years + –SA, % MENWOMENUE.EMF (USECON) LRWT16 / LRMT This recession hit men harder than women, US data

13 * U.Rate: College Graduates: 25+ Years –SA, % U.Rate: < Bachelor's Degree: 25+ Years –SA, % ueeduc.EMF (USECON) LRCLG25 / LRLBA Recession hit less educated much harder, US data

14 * Civilians Unemployed for 27 Weeks and Over –Seasonally Adjusted, Thousands Civilians Unemployed for Less Than 5 Weeks –Seasonally Adjusted, Thousands durationUI.EMF (USECON) LUT27 / LU Nationally, this recession was associated with unprecedented numbers of long term unemployed

15 * + Part Time Econ Reasons –SA,% + Marginally Attached –SA, % usaltmeasures.EMF (USECON) MLU6 / MLU US measures of labor underutilization: what is the “real” unemployment rate?

16 State measures of labor underutilization: What is the “real” unemployment rate?

17 * U. Rate: Wholesale and Retail Trade, US –NSA, % U.Rate: Manufacturing,, US –NSA, % urmanwholesconstr.EMF (USECON) LRNAWRTN / LRNAMGN Construction and manufacturing industries hit particularly hard

18 * Wholesale Trade Employment (Thousands) –SA, Thous Manufacturing Employment (Thousands) –SA, Thous constmanwhole.EMF (USECON) LAWTRDA / LAMANUA Construction and manufacturing shed over four million jobs during the recession

19 * US Wholesale Trade Employment, Decmber 2007 = 100 –200712=100 US Manufacturing Employment, December 2007 = 100 –200712=100 manconstwtusindex.EMF (USECON) LAWTRDA / LAMANUA Nationally, construction employment dropped 25% while manufacturing shed 15% of its employment

20 * Washington Durable Goods Mfg. Employment –SA Washington Non-Durable Goods Mfg. Employment –Seasonally Adjusted wadurnondurmanempl.EMF (WACES) WAADURG / WAANDUR Durable manufactured goods more cyclical than nondurable manufactured goods

21 * Mfrs' Shipments: All Manufacturing Industries –Seasonally Adjusted, Millions $ All Employees: Manufacturing –Seasonally Adjusted, Thousands manempshpmnts.EMF (USECON) NMS / LAMANUA Manufacturers shipments have recovered more than employment

22 * US Wholesale Trade Employment (left) –Seasonally Adjusted, Thousands US Merchant Wholesale Sales: (right) –Seasonally Adjusted, Millions $ whlsemplsales.EMF (LABORR) LAWTRDA / NWSH Nationally, wholesale sales have recovered stronger than employment

23 * All Employees: Wholesale Trade, Washington – 3-month avg Change SA All Employees: Wholesale Trade, Washington – 1-month Change SA wholesalechange.EMF (WACES) WAAWTRD / WAAWTRD Anemic recovery in wholesale trade employment

24 * All Employees: Total Nonfarm, Washington – 3-month avg Change SA All Employees: Total Nonfarm, Washington – 1-month Change SA WAnonfarmchange.EMF (WACES) WAANAGR / WAANAGR Washington state lost 192,700 jobs during the recession (Feb 2008 – Dec 2009)

25 * All Employees: Service-Providing, Washington –200712=100 All Employees: Goods-Producing, Washington –200712=100 goodssvcWAindex.EMF (WACES) WAASERP / WAAGOOD Within the state, the goods producing industries dropped about one-fifth of their employment

26 * All Employees: Manufacturing, Washington –200712=100 All Employees: Construction, Washington –200712=100 manconstindexWA.EMF (LABORR) WALMANUA / WALCONSA In Washington, construction lost over 35% of its employment while manufacturing dropped 15%

27 * Washington Professional & Business Svces Employment –SA Washington: Retail Trade Employment –Seasonally Adjusted profbussrvsnretailempl.EMF (WACES) WAAPBSV / WAARTRD These industries may have bottomed out

28 * All Employees: Educational & Health Svcs, Washington –SA All Employees: Information, Washington –SA educhealthninfoWA.EMF (WACES) WAAEDUH / WAAINFO These industries weathered the recession with no major job losses

29 * US Professional & Business Service Employment –December 2007 = 100 US Retail Trade Employment –December 2007 = 100 busservretail usindex.EMF (USECON) LAPBSVA / LARTRDA These industries lost about eight percent of their employment, but business services is stronger lately

30 * WA Specialty Trade Contractors, Dec = 100 –200712=100 WA Hvy and Civil Engineering Constr, Dec = 100 –200712=100 WAconsttypes.EMF (WACES) WAAD8 / WAAD Washington heavy and civil engineering construction employment may have bottomed out

31 * All Employees: Leisure & Hospitality, Washington –December 2007 = 100 All Employees: Educational & Health Svcs, Washington –December 2007 = 100 WA leisurenednhealth servicesindex.EMF (WACES) WAALEIH / WAAEDUH Health services employment remained relatively strong throughout the recession

32 Washington statewide hiring dropped substantially, but did not disappear during the recession

33 Washington labor markets are dynamic -- hiring happens even in the depths of recession

34 Washington Local Employment Dynamics: employment and new hires, by sector Source: Local Employment Dynamics Partnership, US Census Bureau and LMEA, ESD

35 Greg Weeks, (360) Thank you for your time and attention. Please direct any additional questions, comments, or suggestions to me at the or telephone number below