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

2.  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 Outline

3. Structural or Cyclical ?

4. Inflation ?

5. What to Do ? CBO Forecast (% of GDP)

6. Impact of Next Event ?

7. KingSkagitWhatcom Jobs1.45 mm45,00085,000 Population (2011)1.97 mm118,000203,660 Median Household Income $68,775$52,519$51,500 Unemployment7.4%9.3%7.4% Overview – Basic Stats

8. Border Crossings

9.  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 Influence of the Canadian $

10. Retail Sales

11. Job Growth in the Region…

13. Profession & Business Service Jobs

14. MfgConst. Prof & Business Services Retail Seattle MSA2232512 Bellingham MSA 34 016 Mt. Vernon MSA 88na0 Share of Job Growth (%) 2010 to present

15. Construction Jobs

20. A Slow Recovery ?

21. Productivity Real GDP JOBS

23.  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” “Theories” About Job Creation

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

25.  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 Findings… So Far

26.  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 Conclusions

27. Hart.Hodges@wwu.edu 650-3909 Thank You !