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Job Growth Outlook
Presented to theConsensus Economic Forecasting Commission
March 30, 2015
Glenn MillsChief Economist
Center for Workforce ResearchMaine Dept. of Labor
www.maine.gov/labor/[email protected]
207-621-5192
Labor Force
Unemployment rates continue to trend lower. The February rate of 5.0% for Maine is back to the 20
year average prior to the recent recession.
ME avg 1987 to 2007 = 5.0%
U.S. avg 1987 to 2007 = 5.7%
Preliminary unemployment rates continue to move in a direction for several months and then change course. Revisions demonstrate a consistent downward trend.
Jan-
11 Apr Ju
l
Oct
Jan-
12 Apr Ju
l
Oct
Jan-
13 Apr Ju
l
Oct
Jan-
14 Apr Ju
l
Oct
Jan-
15
4.5%
5.5%
6.5%
7.5%
8.5%Preliminary Es-timatesBenchmark 2014
Sea
sona
lly A
djus
ted
Une
mpl
oym
ent
Rat
e
The employment to population ratio continues to recover…
…But labor force participation has been declining since mid-2013 and is now at a 29 year low
Payroll Jobs
Nonfarm payroll job growth continues…
…Though the rate of recovery has slowed
This recovery is different
Temporary Census workers
Real total wages paid continue to rise about the same rate as jobs (adjusted for inflation)
20
00
.1
20
00
.4
20
01
.3
20
02
.2
20
03
.1
20
03
.4
20
04
.3
20
05
.2
20
06
.1
20
06
.4
20
07
.3
20
08
.2
20
09
.1
20
09
.4
20
10
.3
20
11
.2
20
12
.1
20
12
.4
20
13
.3
20
14
.2
560,000
580,000
600,000
620,000
$5.6
$5.8
$6.0
$6.2
Jobs (left scale)Total Wages (right scale)
Wag
e &
Sal
ary
Jobs
Tot
al W
ages
(in
Bill
ions
of
2014
Q2
$)
Forecast Considerations
The median age in Maine increased more than any other state since 1980 to the highest in the nation.
1970 1980 1990 2000 2010 201325
30
35
40
45
U.S.MaineNew HampshireVermontFlorida
Med
ian
Age
Not only does Maine have the highest share of population in their 60s, we also have the lowest share under 25
Thousands in their 60s and 70s have or soon will exit the workforce…fewer young people will enter
0-4 5-9 10-14
15-19
20-24
25-29
30-34
35-39
40-44
45-49
50-54
55-59
60-64
65-69
70-74
75-79
80-84
85+
-15,000
-10,000
-5,000
0
5,000
10,000
15,000
2010
to 2
013
popu
latio
n ch
ange
The rate of job separations of seniors increased after 2011, the year the oldest Baby Boomers turned 65
1997 Q2
1998 Q2
1999 Q2
2000 Q2
2001 Q2
2002 Q2
2003 Q2
2004 Q2
2005 Q2
2006 Q2
2007 Q2
2008 Q2
2009 Q2
2010 Q2
2011 Q2
2012 Q2
2013 Q2
2014 Q2
1,500
2,000
2,500
3,000
3,500
4,000
4 Q
uart
er A
vera
ge S
epar
ation
s, A
ge 6
5+
…And became even more seasonal. This may indicate more seniors are taking part-time,
seasonal jobs rather than working year-round.
1996 Q2
1997 Q2
1998 Q2
1999 Q2
2000 Q2
2001 Q2
2002 Q2
2003 Q2
2004 Q2
2005 Q2
2006 Q2
2007 Q2
2008 Q2
2009 Q2
2010 Q2
2011 Q2
2012 Q2
2013 Q2
2014 Q2
1,000
2,000
3,000
4,000
5,000
6,000
Qua
rter
ly S
epar
ation
s, A
ge 6
5+
The rapid growth in the 1970s and 80s was primarily due to Baby Boomers entering the labor force. The decline since
the middle of 2013 is the early stages of their exit.
Jan-78
Jan-80
Jan-82
Jan-84
Jan-86
Jan-88
Jan-90
Jan-92
Jan-94
Jan-96
Jan-98
Jan-00
Jan-02
Jan-04
Jan-06
Jan-08
Jan-10
Jan-12
Jan-14475,000
525,000
575,000
625,000
675,000
725,000
Civi
lian
Labo
r For
ce
At 5.0% of the labor force, we currently have 34,400 unemployed. If the rate declined to a very low 4% there would be fewer than 28,000 unemployed. The question is, will a gain of 6,000+ jobs from lower unemployment and several thousand more from higher labor force participation of younger people be enough to offset labor force exits due to retirement? If so, by how much? For how long?
Labor force participation remains below thepre-recession average in age groups under 55
16-19 20-24 25-34 35-44 45-54 55-64 65+10%
20%
30%
40%
50%
60%
70%
80%
90%
2002-07 Avg2014
Labo
r For
ce P
artic
ipati
on R
ate
If the population were unchanged in each age group and participation returned to 2002 to 2007 average for those under 55, the labor force would increase 18,000. But the 16 to 54 population is projected to decline more than 6,500 per year through 2022.
Forecast
CEFC forecasts in 2010 and early 2011 expected a return to pre-recession job levels by 2013 or 2014…
Jan
00
Oct Ju
lA
pr
Jan
03
Oct Ju
lA
pr
Jan
06
Oct Ju
lA
pr
Jan
09
Oct Ju
lA
pr
Jan
12
Oct Ju
lA
pr
Jan
15
Oct Ju
lA
pr580,000
590,000
600,000
610,000
620,000
630,000
Payroll Jobs Feb-10 Nov-10 Apr-11
…Forecasts became more moderate over time
Jan
00
Oct Ju
lA
pr
Jan
03
Oct Ju
lA
pr
Jan
06
Oct Ju
lA
pr
Jan
09
Oct Ju
lA
pr
Jan
12
Oct Ju
lA
pr
Jan
15
Oct Ju
lA
pr580,000
590,000
600,000
610,000
620,000
630,000
Payroll Jobs Nov-11 Feb-12 Nov-12 Apr-13
Last summer job growth appeared to exceed the forecast…
Jan
00
De
cN
ov
Oct
Se
pA
ug
Jul
Jun
Ma
yA
pr
Ma
rF
eb
Jan
11
De
cN
ov
Oct
Se
pA
ug
Jul
Jun
Ma
yA
pr
Ma
rF
eb
Jan
22
De
c580,000
590,000
600,000
610,000
620,000
630,000
Nonfarm Payroll Jobs
CEFC February 2014 Forecast
CWRI Forecast to 2022
…Since then revisions show a marked slowing. CWRI believes thousands aging out of the workforce will constrain growth to
just a few thousand the next few years.Ja
n 0
0D
ec
No
vO
ctS
ep
Au
gJu
lJu
nM
ay
Ap
rM
ar
Fe
bJa
n 1
1D
ec
No
vO
ctS
ep
Au
gJu
lJu
nM
ay
Ap
rM
ar
Fe
bJa
n 2
2D
ec580,000
590,000
600,000
610,000
620,000
630,000
Nonfarm Payroll Jobs
CEFC November 2014 Forecast
CWRI Forecast to 2022
Births minus deaths
Moved in minus
moved out
Natural change plus net
migration equals total population
change
