SAME/ACEC Conference

June 14, 2012

The U.S. and Washington Area Economic Performance

Stephen S. Fuller, Ph.D.Dwight Schar Faculty Chair and University Professor

Director, Center for Regional AnalysisGeorge Mason University

0 1 2 3 4 5 6 7 8 9 10 110

2

4

6

8

10

12

14

16

18

1975-Q11982-Q31991-Q12001-Q42009-Q2

Quarters After Trough

% C

ha

ng

e in

GD

P

Recession Recovery Patterns of GDPPast Five Recessions

Sources: BEA, GMU Center for Regional Analysis,

U.S. Leading Index

JanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ct

-25.00

-20.00

-15.00

-10.00

-5.00

0.00

5.00

10.00

15.00 2006 2007 2008 2009 2010 2011

U.S. Coincident Index

JanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ctJanA

prJulO

ct

-12

-10

-8

-6

-4

-2

0

2

4

6 2006 2007 2008 2009 2010 2011

Oct-07

Oct-08

Oct-09

Oct-10

Oct-11

30

35

40

45

50

55

60

65

MfgN-Mfg

ISM Manufacturing and Non-Manufacturing Indices

May-12

20012002

20032004

20052006

20072008

20092010

20112012

-8000

-6000

-4000

-2000

0

2000

4000

Annual Change in Payroll Jobs – USMonth over the Year, Not Seasonally Adjusted

(1000s)

May =+ 1.8 M

Source: BLS, GMU Center for Regional Analysis

20

07

20

07

20

07

20

08

20

08

20

08

20

09

20

09

20

09

20

10

20

10

20

10

20

11

20

11

20

11

20

12

20

12

-900

-700

-500

-300

-100

100

300

500

700

000s

US Job ChangeMonth-to-Month, Seasonally Adjusted

May= 69

Source: BLS

U.S. Job Change by SectorMay 2011 – May 2012

Information

Federal Govt.

Transp. & Util.

Other Services

Construction

Wlse Trade

Financial

Manufacturing

Leisure & Hosp.

Retail Trade

Prof. & Bus. Svcs

State & Local Govt

Educ & Health Svcs

-600 -400 -200 0 200 400 600

-43

-50

98

27

18

97

31

227

296

130

517

-111

484

(000s) Total = 1,782

Source: BLS (Seasonally Adjusted), GMU Center for Regional Analysis

Ranked by Size in 2011

U.S. Job Change by SectorApr 2012 – May 2012

Information

Federal Govt.

Transp. & Util.

Other Services

Construction

Wlse Trade

Financial

Manufacturing

Leisure & Hosp.

Retail Trade

Prof. & Bus. Svcs

State & Local Govt

Educ & Health Svcs

-100 -80 -60 -40 -20 0 20 40 60 80 100

-2

-5

36

6

-28

16

3

12

-9

2

-1

-8

46

(000s) Total = 69

Source: BLS (Seasonally Adjusted), GMU Center for Regional Analysis

Ranked by Size in 2011

20072008

20092010

20112012

200

250

300

350

400

450

500

550

600

650

700

Initial Claims for Unemployment4-Week Moving Average

374.5

Source: Bureau of Labor Statistics

(000s)

May

-04

May

-05

May

-06

May

-07

May

-08

May

-09

May

-10

May

-11

May

-12

4

5

6

7

8

9

10

11

U.S. Unemployment Rate

Source: BLS (Seasonally Adjusted), Global Insight (forecasts)

May = 8.2

%

GI FCST12 – 8.113 – 7.814 – 7.215 – 6.516 – 6.117 – 5.9

Oil Prices$ per barrel

20042006

20082010

20122014

2016

0.0

20.0

40.0

60.0

80.0

100.0

120.0

$/barrel

Source: Global Insight

Forecast > > > > > > >

Sep-0

7

Jan-

08

May

-08

Sep-0

8

Jan-

09

May

-09

Sep-0

9

Jan-

10

May

-10

Sep-1

0

Jan-

11

May

-11

Sep-1

1

Jan-

12

May

-12

0

20

40

60

80

100

120

140

100

Consumer Confidence

Source: Conference Board, GMU Center for Regional Analysis

Expectations

Current Situation

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

-1

0

1

2

3

4

5

Consumer Prices2001 - 2017

Forecast > > > > >

%

Source: BLS, Global Insight

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

0

1

2

3

4

5

6

7

8

Fed 30-Yr

Interest Rates2001 - 2017

Forecast > > > >

Source: Global Insight

Apr-07

Apr-08

Apr-09

Apr-10

Apr-11

Apr-12

3000

3500

4000

4500

5000

5500

6000

6500

7000

200

300

400

500

600

700

800

900

1000

1100

Existing (Left Axis)

New (Right Axis)

U.S. New and Existing Home Sales

(000s) (000s)

Source: NAHB (New) and NAR (Existing)

Growth in Total Consumption Outlays

20002001

20022003

20042005

20062007

20082009

20102011

20122013

20142015

20162017

-3

-2

-1

0

1

2

3

4

5

6

4.7

2.5 2.7 2.83.3 3.4

2.92.3

-0.6

-1.9

2.0 2.2 2.2 2.1 2.3 2.3 2.5 2.3

%

Source: Global Insight, GMU Center for Regional Analysis

Forecast > > > > >

20042006

20082010

20122014

2016

-30

-20

-10

0

10

20

30

GDPResidential FixedNon-Res: StructuresState & LocalFederalBus. Inv. - Eq& Sfwr

%

U.S. Economic Performance

Source: BEA, Global Insight

2007

-1 3

2008

-1 3

2009

-1 3

2010

-1 3

2011

-1 3

2012

-1 3

2013

-1 3

2014

-1 3-10

-8

-6

-4

-2

0

2

4

6

U.S. Gross Domestic ProductQuarterly Change: 2007 – 2014

% Forecast > > > > > >

Source: BEA, Global Insight

The Washington Economy

2010 Structure of the Greater Washington Economy

Local ServingActivities 34.8%

Non-LocalBusiness 12.0 %

TotalFederal 39.8%

Procurement 19.1%

Assn 1.8%

Hosp. 2.1%

Int’l 3.5%

Oth

er 1

.5%

Other Federal 10.7 %

Health/E

d.

4.5%

Fed Wages & Salaries 10.0%

Source: GMU Center for Regional Analysis

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Mar-11

Mar-12

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

Washington MSA Leading Economic IndexMonth-Over-Year Percent Change

12-MonthMoving Average

Mar-02

Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

Mar-09

Mar-10

Mar-11

Mar-12

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

Washington MSA Coincident Economic IndexMonth-Over-Year Percent Change

12-MonthMoving Average

15 Largest Job MarketsJob Change: Apr 2011 – Apr 2012

New York

Los Angeles

Chicago

DC Dallas

Philadelphia

Houston

Boston

Miam

i

Atlanta

Detroit

SF-Oakland

Minneapolis

Phoenix

Seattle

-20

0

20

40

60

80

100

120(000s)

Washington + 34,500

Source: BLS, GMU Center for Regional Analysis

Annual Job ChangeWashington MSA

2002200420062008F

ebA

prJunA

ugO

ctD

ecF

ebA

prJunA

ugO

ctD

ecF

ebA

prJunA

ugO

ctD

ecF

ebA

pr

-80

-60

-40

-20

0

20

40

60

80

100

000s Annual Data Annual Month over Year

2009 2010 2011

Source: BLS, GMU Center for Regional Analysis

Job Change by SectorApr 2011 – Apr 2012

Washington MSA

Transp. & Util.

Wlse Trade

Manufacturing

Information

Financial

Other Services

Construction

Leisure & Hosp.

Retail Trade

State & Local Govt

Educ & Health Svcs

Federal Govt.

Prof. & Bus. Svcs

-20 -15 -10 -5 0 5 10 15 20 25 30

3

-1

-1

-2

4

-1

5

8

-4

9

16

-3

2(000s) Total = 34,500

Source: BLS, GMU Center for Regional Analysis

Professional & Business ServicesWashington MSA

200220042006JanM

arM

ayJulS

epN

ovJanM

arM

ayJulS

epN

ovJanM

arM

ayJulS

epN

ovJanM

arM

ayJulS

epN

ovJanM

ar

-20

-15

-10

-5

0

5

10

15

20

25

30

000s Annual Data Annual Month over Year

2008 2009 2010 2011 2012

Source: BLS March 2012 Benchmark, GMU Center for Regional Analysis Tot 2011 = 688,700

Federal GovernmentWashington MSA

200220042006JanM

arM

ayJulS

epN

ovJanM

arM

ayJulS

epN

ovJanM

arM

ayJulS

epN

ovJanM

arM

ayJulS

epN

ovJanM

ar

-20

-15

-10

-5

0

5

10

15

20

25

30

000s Annual Data Annual Month over Year

2008 2009 2010 2011 2012

Source: BLS March 2012 Benchmark, GMU Center for Regional Analysis Tot 2011 = 383,600

Annual Job ChangeDistrict of Columbia

2002

2004

2006

2008

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

-40

-30

-20

-10

0

10

20

30

40

50

60

000s Annual Data Annual Month over Year

2009 2010 2011

Source: BLS, GMU Center for Regional Analysis

Annual Job ChangeSuburban Maryland

2002

2004

2006

2008

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

-40

-30-20

-100

1020

3040

5060

000s Annual Data Annual Month over Year

2009 2010 2011

Source: BLS, GMU Center for Regional Analysis

Annual Job ChangeNorthern Virginia

2002

2004

2006

2008

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

Jun

Aug

Oct

Dec

Feb

Apr

-40

-30

-20

-10

0

10

20

30

40

50

60

000s Annual Data Annual Month over Year

2009 2010 2011

Source: BLS, GMU Center for Regional Analysis

Apr-05

Apr-06

Apr-07

Apr-08

Apr-09

Apr-10

Apr-11

Apr-12

0

2

4

6

8

10

12

14

8.3 – DC8.1 – U.S.

5.6 – SMD5.1 – MSA4.0 - NVA

Unemployment Rate

Source: BLS, Not Seasonally Adjusted

15 Largest Job MarketsRanked by Unemployment Rate

April 2012

Washington

Minneapolis

Boston

Dallas

Houston

Phoenix

Seattle

Philadelphia

SF-Oakland

Miam

i

New York

Atlanta

Detroit

Chicago

Los Angeles

0

2

4

6

8

10

12%

US 8.1

Source: BLS, NOT Seasonally Adjusted

5.1

Economic Outlook (GRP) – 2015Washington Area and Sub-state Portions

(Annual % Change)

20012002

20032004

20052006

20072008

20092010

20112012

20132014

2015

-2

-1

0

1

2

3

4

5

6

7

%

DCSMMSANV

Source: GMU Center for Regional Analysis

Employment Change bySub-state Region (000s)

2008 2009 2010 2011 2012 2013 2014 2015

D.C. 10.1 -2.2 9.5 11.2 11.8 12.5 14 13

Sub. MD -3.3 -25.1 -5.9 4.0 6.2 8.5 9.0 9.5

No. VA 6.1 -23.0 8.7 17.4 18.0 21.0 22.0 20.5

REGION 12.9 -50.3 11.3 32.6 36.0 42.0 45.0 43.0

Average Annual Change 1990-2010 = 36,000

Source: BLS, GMU Center for Regional Analysis, 2009-2015 based on 2012 Benchmark data from BLS, Revised 5/1/2012NOTE: 2011 Total is the sum of subregions and does not agree with the Mar 13, 2012 published MSA total.

2000

2002

2004

2006

2008

2010

2012

2014

-4

-2

0

2

4

6

8

%

Source: Global Insight, GMU Center for Regional Analysis

GDP/GRP 2000 - 2015

Washington

U.S.

2015 Structure of the Greater Washington Economy

Local ServingActivities 34.2%

Non-LocalBusiness 14.0 %

TotalFederal 36.3%

Procurement 17.4%

Assn 2.0 %

Hosp. 2.5%

Int’l 3.5%

Oth

er 1

.5%

Other Federal 9.5 %

Health/E

d.

6.0 %

Fed Wages & Salaries 9.4 %

Source: GMU Center for Regional Analysis

George Mason University

Center for Regional Analysis

cra.gmu.edu