Transcript The Economy on Election Eve - the Atlanta Regional Commission

The Economy on Election Eve:
Swimming with an Undertow
Atlanta Regional Commission
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The Highlights
• Nationally, recovery with expansion continues
– Gross Domestic Product (GDP) is recovering since the recessionary trough, and employment has
as well, but progress has been slow
– Productivity and wage trends (negative, generally) have held growth back
• Locally, overall recovery in jobs and the unemployment rate overall mirror that seen in
the nation—with some local areas lagging
• Locally and nationally, significant issues remain
– Higher unemployment rates for minorities and less-educated populations
– Concentration of job growth in lower-income sectors, which pay lower wages
• Leading indicators (e.g. job postings, patents, and forecasts) demonstrate potential for
growth in higher-wage sectors
GDP Trends-National
Gross Domestic Product (GDP) is the most-watched macroeconomic indicator. Recovery has been fairly steady, overall,
since the bottom of the recession in late 2008, but many quarters have been sluggish and a few even have strayed into
negative territory. Since early 2014, however, there have been no negative quarters for GDP.
Source: Wall Street Journal; Bureau of Economic Analysis (BEA)
GDP Trends-Metro
GDP, Millions of chained (2009)
dollars, 2014
137,181 to 1,423,173
69,940 to < 137,181
41, 130 to < 69,940
27, 556 to < 41, 130
13,366 to < 27,556
Atlanta is a leading Southeastern metro in terms of GDP, one of the few regional competitors for larger metros elsewhere.
Source: Bureau of Economic Analysis (BEA), via Neighborhood Nexus
Percent Change in GDP for Metros: 2013-14
% Annual Change GDP, chained
(2009) Dollars:
3.1 to 8.5
2.4 to < 3.1
1.6 to < 2.4
0.7 to < 1.6
-1 to < 0.7
GDP growth for the most recent period has been strong in Atlanta, but does trail—on a percentage basis—many smaller
metros in the Southeast, as well as quite a few metros in the West.
Source: Bureau of Economic Analysis (BEA), via Neighborhood Nexus
Productivity Trends counterproductive
Productivity soared during the 1990s, surged during the recession with fewer workers doing less, but has slipped during the recovery.
Lagging productivity has held down GDP increases, and (as we will see later) restrained wage growth.
Source: Macrotrends, Inc.
YOY Job Change: Atlanta and the Nation
Year-over-Year Percent Change in Employment
6
4
2
0
-2
-4
-6
ATL
Jul-16
Jan-16
Jul-15
Jan-15
Jul-14
Jan-14
Jul-13
Jan-13
Jul-12
Jan-12
Jul-11
Jan-11
Jul-10
Jan-10
Jul-09
Jan-09
Jul-08
Jan-08
Jul-07
Jan-07
Jul-06
Jan-06
Jul-05
Jan-05
Jul-04
Jan-04
Jul-03
Jan-03
Jul-02
Jan-02
Jul-01
Jan-01
Jul-00
Jan-00
-8
US
This graph shows the year-over-year percent change in employment for metro Atlanta (blue) and the US as a
whole (green). What we see is during the recession, employment change was much lower in metro Atlanta, but
as of 2012, it has surpassed the United States. The gap has narrowed in recent quarters.
Source: Bureau of Labor Statistics
Atlanta Pre-Recession Peak
Change in employment from pre-recession peak
10.0%
5.0%
0.0%
-5.0%
-10.0%
Jun-16
Mar-16
Dec-15
Sep-15
Jun-15
Mar-15
Dec-14
Sep-14
Jun-14
Mar-14
Dec-13
Sep-13
Jun-13
Mar-13
Dec-12
Sep-12
Jun-12
Mar-12
Dec-11
Sep-11
Jun-11
Mar-11
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
Sep-09
Jun-09
Mar-09
Dec-08
Sep-08
Jun-08
Mar-08
Dec-07
-15.0%
This graph shows the percent change in employment from the pre-recession peak. You can see starting in 2008 there were far
fewer jobs than right before the recession. Around March 2014, the economy started picking back up. In December 2015, we
had the highest increase in jobs since before the recession—and the most recent months show increases at close to the same
rate as last December.
Source: Bureau of Labor Statistics
Unemployment Rate Trends
Between the end of 2007 and mid-2009, the national unemployment rate soared from 5% to 9.5% (almost doubling).
As of mid-2016, the rate was nearing pre-recession “lows” even as underemployment persists.
Metro Unemployment Rates (2015)
% Unemployed, 2015:
5.9 to 10.2
5.3 to < 5.9
5 to < 5.3
4.3 to < 5
3.2to < 4.3
On the chart above, for the 100 largest metros, dark blue colored dots indicate areas with the lowest unemployment,
while grey shades represent the highest rates. Atlanta’s unemployment rate in 2015 was average, compared to other
major U.S. metros.
Source: Bureau of Labor Statistics, via Neighborhood Nexus
Unemployment Rates: Atlanta in Context
12.0
GA
10.4
10.3
10.0
10.8
10.5
10.6
10.3
ATL MSA
9.3
8.9
8.2
7.8
8.0
USA
7.6
7.2
6.0
5.9
5.6
5.2
5.0
4.6
4.0
2.0
0.0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
The unemployment rate for the Atlanta MSA is lower than that of Georgia, at every point since the onset and the
ending/ recovery from the Great Recession. While the Atlanta rate is higher than that of the nation , the MSA has
improved more quickly 2014-2016.
Source: BLS LAUS Data; August data, yearly
Unemployment Rates: Counties in Context
16.0
Clayton
Rockdale
Henry
Douglas
DeKalb
Fulton
GA
ATL MSA
USA
Fayette
Gwinnett
Cobb
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
The unemployment rates in a majority of ARC counties, while improving with the national and state pattern, still
lag (as of August 2016) the Metro Atlanta average in 6 of 10 cases.
Source: BLS LAUS Data; August data, yearly
Unemployment Rates by Race/Ethnicity
Unemployment rates for minorities, always relatively higher than others’ rates, have improved at a slower rate
coming out of the Great Recession.
Unemployment Rate by Education Level
The unemployment rates in a majority of ARC counties, while improving with the national and state pattern, still
lag (as of August 2016) the Metro Atlanta average in 6 of 10 cases.
National Wage Trends: 2002-Present
2016
Wage growth has failed to “turn around” since the Great Recession and is far below the 1983-2015 average as
shown, even with a ticking up 2012-2016. Wage growth lags—significantly –even the slow recoveries in jobs
and unemployment rates.
Average Hourly Earnings, 2012-16
Percent Change Average Hourly Earnings
of All Employees in 2012-2016:
0.7 to 4.2
-1.5 to < 0.7
-3.1 to < -1.5
-5.5 to < -3.1
-11.9 to < -5.5
Metro Atlanta doesn’t have the highest average hourly earnings among the largest metros, but it does have one
of the highest changes in earnings (of the metros) from 2012 to 2016.
Source: Bureau of Labor Statistics, via Neighborhood Nexus
Job Trends (% Change) by Period-8.0%
2007-2012
6.7%
7.0%
2012-2016
2015-2016
6.0%
5.6%
4.7%
5.0%
4.1%
4.0%
3.5%
3.4%
4.0%
3.9%
3.7%
3.1%
3.0%
3.0%
2.0%
2.0%
1.4%
1.2%
1.0%
0.2%
0.0%
-1.0%
-0.5%
-0.6%
-1.1%
-1.1%
-1.1%
-1.0%
-1.2%
-2.0%
-1.3%
-1.3%
-1.1%
-1.0%
-1.7%
-1.8%
-3.0%
USA
State
MSA
10co
Cherokee
Clayton
Cobb
DeKalb
Douglas
Fayette
Fulton
Gwinnett
Henry
Rockdale
This chart shows that, during the Great Recession and its aftermath (2007-2012), jobs declined in all areas shown, except Henry where
they held. During the recovery of 2012-2016, the number of jobs increased in all counties and comparison areas. This increase is most
dramatic in the 2015-2016 period.
Source: BLS QCEW 1Q Data for each year: Processing and Analysis by ARC Research & Analytics
YOY by Lower-Wage Sector
Year-over-year percent change by sector (metro Atlanta)
15
10
5
0
-5
-10
-15
-20
-25
Construction
Retail
Sep-15
Nov-15
Jan-16
Mar-16
May-16
Jul-16
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-11
Nov-11
Jan-12
Mar-12
May-12
Jul-12
Sep-10
Nov-10
Jan-11
Mar-11
May-11
Jul-11
Sep-09
Nov-09
Jan-10
Mar-10
May-10
Jul-10
Sep-08
Nov-08
Jan-09
Mar-09
May-09
Jul-09
Sep-07
Nov-07
Jan-08
Mar-08
May-08
Jul-08
Jan-07
Mar-07
May-07
Jul-07
-30
Leisure
It’s important to look at this job growth by sector, as therein lies the rub for the economy. During the recession, lower-wage sectors
such as Construction, Leisure, and Retail took a severe hit. But lately, Construction, Leisure, and Retail are performing very well.
Source: BLS
YOY Job Change: Higher-Wage Sector
Year-over-year percent change by sector (metro Atlanta)
10
8
6
4
2
0
-2
-4
-6
-8
-10
-12
Information
Finance
Professional/Business
Conversely, higher-wage sectors have lagged, after run-ups from latte 2009 to early 2011. From 2013 to present, the sectors of
Information, Finance, and Professional Business and Technical Services have shown declining employment.
Source: BLS
Average Weekly Wage Trends (% Change) by Period-8.0%
2007-2012
6.3%
2012-2016
2015-2016
6.0%
6.0%
4.0%
2.0%
3.6%
2.1%
2.0%
1.9%
1.3%
0.6%
0.4%
0.3% 0.4%
0.0%
0.0%
0.4%
-0.1%
-1.0%
-2.0%
-0.2%
-0.5%
-0.6%
-1.2%
-1.7%
-2.4%
-4.0%
-3.5%
-3.7%
-4.8%
-6.0%
-5.4%
-5.6%
-5.5%
-6.0%
-8.0%
USA
State
MSA
10co
Cherokee
Clayton
Cobb
DeKalb
Douglas
Fayette
Fulton
Gwinnett
Henry
Rockdale
This chart shows that, during the Great Recession and its aftermath, wages actually showed very slight increases in most areas—perhaps
due to part-time and lower-wage workers being laid off. During the recovery of 2012-2016, however, the low-wage-driven job recovery
has led to a drop in average weekly wages—in most areas. This decline is, notably, more dramatic in the 2015-2016 period.
Source: BLS QCEW 1Q Data for each year, adjusted for inflation
Software Developers Job Postings
There has, then, been weakness in the growth of occupied jobs in higher-wage sectors in our local (and national recovery). There has
NOT, however, been low demand for skills in those sectors. For instance, the demand for software developers in our metro has been very
high over the last few years—as well as that for other high-tech sectors like digital media. If this demand can be better met (better
retention, training, and recruitment would be tools to do so—wages could start to rise.
Source: Burning Glass, accessed October 2016
Patents- Metro Level
Patents filed per 100,000
population, 2015:
67.1 to 739.5
38 to < 67.1
22.4 to < 38
12 to < 22.4
1.7 to < 12
Trends in patents are also encouraging, as leading indicator for higher-wage job growth. When there are high amounts of patents filed, it
suggests that people are innovating, creating, and starting businesses. This map shows the number of patents filed per 100,000 people in
2015. Dark blue represents the highest rates and light blue/ grey represent the lowest. Atlanta is a leader in the Southeast, while in the
middle of the pack nationally, per the rate(s) of patents filed,
Source: United States Patent and Trademark Office
Employment Forecast
Health Care
Retail Trade
Prof, Sci & Tech Svcs
Admin & Waste Mgmt Svcs
Construction
Accom & Food Svcs
Real Estate
Finance and Insurance
Other Svcs
Wholesale Trade
Manufacturing
Transp & Warehouse
Educ Svcs
Arts, Ent & Rec
Information
Mgmt of Cos
Utilities
Mining
Forestry & Fishing
Total Private Sector Employment
(in Thousands) by Industry
-100
0
Emp in 1990
100
200
Change 1990-2015
300
400
500
600
Change 2015-2040
…And finally, ARC’s recent Series 15 forecasts predict strong growth in both Proofessional Scientific and Technical Services
and Finance.
Source: ARC The Region’s Plan Forecast (2015) Series
23
Summing Up
• Things are looking up
– GDP growth with Atlanta a leader
– Recovered from the Recession
• Unemployment Rate
• Job Numbers
• Challenges remain
‒ Job growth concentrated lower-sectors
‒ Lagging wages
‒ “Unequal” unemployment
‒ Future trends encouraging
‒ High-tech, high-wage sector postings
‒ Patents
‒ Forecasts