Cardinal Bank & George Mason University 2th Annual Economic Conference Friday, January 13, 212 cra.gmu.edu
Cardinal Bank/George Mason University 2 th Annual Economic Conference Is This a Recovery or What? The Near-Term Outlook for the Washington Area Economy Stephen S. Fuller, Ph.D. Dwight Schar Faculty Chair and University Professor Director, Center for Regional Analysis George Mason University January 13, 212
Recession Recovery Patterns of GDP Past Five Recessions in GDP % Change 16 14 12 1 8 6 4 2 1975-Q1 1982-Q3 1991-Q1 21-Q4 29-Q2 1 2 3 4 5 6 7 8 9 1 Quarters After Trough Sources: BEA, GMU Center for Regional Analysis,
% 6 4 2-2 -4-6 -8-1 U.S. Gross Domestic Product Quarterly Change: 27 214 Forecast > > > > > > 27-1 2 3 4 28-1 2 3 4 29-1 2 3 4 21-1 2 3 4 211-1 2 3 4 212-1 2 3 4 213-1 2 3 4 214-1 2 Source: BEA, Global Insight
(1s) 4 Annual Change in Payroll Jobs US Month over the Year, Not Seasonally Adjusted 2 Dec = + 1.7 M -2-4 -6-8 Source: BLS, GMU Center for Regional Analysis
U.S. Job Change by Sector December 27 December 29 Ranked by Size in 21 State & Local Govt Educ & Health Svcs Prof. & Bus. Svcs Retail Trade Leisure & Hosp. Manufacturing Financial Construction Wlse Trade Other Services Transp. & Util. Federal Govt. Information -2,192-1,795-1,563-1,26 (s) Total - 8,363, 35 791-544 -57-474 -2-377 69-375 -25-2 -15-1 -5 5 1 Source: BLS March 21 Benchmark, (Seasonally Adjusted), GMU Center for Regional Analysis
U.S. Job Change by Sector Dec 21 Dec 211 Ranked by Size in 21 State & Local Govt Educ & Health Svcs Prof. & Bus. Svcs Retail Trade Leisure & Hosp. Manufacturing Financial Construction Wlse Trade Other Services Transp. & Util. Federal Govt. Information -251 (s) Total = 1,64 42 521 226 253 225 7 46 84 44 72-36 -36-6 -4-2 2 4 6 Source: BLS March 21 Benchmark, (Seasonally Adjusted), GMU Center for Regional Analysis
7 65 6 55 5 45 4 35 3 25 2 Initial Claims for Unemployment 4-Week Moving Average 382 Source: Bureau of Labor Statistics
U.S. Unemployment Rate 11 1 9 8 7 6 5 4 % Dec = 8.5 GI FCST 11 9. 12 8.8 13 8.6 14 7.9 15 7.1 16 6.6 Source: BLS, Seasonally Adjusted
% 6 5 4 3 2 1-1 -2-3 4.7 Growth in Total Consumption Outlays 2.5 2.7 2.8 3.3 3.4 2.9 2.3 -.6-1.9 Forecast > > > > > 2. 2.2 2.2 2. 2.1 2.4 Source: Global Insight, GMU Center for Regional Analysis
U.S. Economic Performance % 3 2 1-1 -2 GDP Residential Fixed Non-Res: Structures State & Local Federal Bus. Inv. -3 Source: Global Insight
The Washington Metropolitan Area Economy
1,s 16 Annual Change in Jobs Washington Metro Area 12 8 4-4 -8 Source: BLS, GMU Center for Regional Analysis
(s) 1 8 6 4 2-2 -4-6 -8-1 15 Largest Job Markets Job Change Nov 9 Nov 1 Washington + 49,2 Source: BLS March 21 Benchmark, GMU Center for Regional Analysis
(s) 1 8 6 4 2-2 -4-6 -8-1 15 Largest Job Markets Job Change Nov 21 Nov 211 Washington + 8,8 Source: BLS March 211 Benchmark, GMU Center for Regional Analysis
Annual Job Change Washington MSA s Annual Data Annual Month over Year 8 6 4 2-2 -4-6 -8 29 21 211 Oct Aug Jun Apr Feb Dec Oct Aug Jun Apr Feb Dec Oct Aug Jun Apr Feb 28 26 24 22 Source: BLS March 211 Benchmark, GMU Center for Regional Analysis
Washington MSA, Job Change by Sector (s) Sector 28 21 21-211 TOTAL -9.2 +8.8 Manufacturing -7.4-3. Information Svcs -1.3-1.9 Construction -27.5 +.5 Other Services -5. -2.1 Financial Svcs -6.1 +5.8 State & Local Gov -1.3 +3.5 Retail -1.3-5.6 Leisure & Hosp. +1.7 +3.5 Prof. & Bus. Svcs. +7.7 +7.4 Federal Gov +27.1-2. Health & Educ +2. +3. Source: BLS, GMU Center for Regional Analysis (November Data)
Annual Job Change District of Columbia s Annual Data Annual Month over Year 6 5 4 3 2 1-1 -2-3 -4 29 21 211 Oct Aug Jun Apr Feb Dec Oct Aug Jun Apr Feb Dec Oct Aug Jun Apr Feb 28 26 24 22 Source: BLS March 211 Benchmark, GMU Center for Regional Analysis
6 5 4 3 2 1-1 -2-3 -4 Annual Job Change Suburban Maryland s Annual Data Annual Month over Year 29 21 211 Oct Aug Jun Apr Feb Dec Oct Aug Jun Apr Feb Dec Oct Aug Jun Apr Feb 28 26 24 22 Source: BLS March 211 Benchmark, GMU Center for Regional Analysis
Annual Job Change Northern Virginia s Annual Data Annual Month over Year 6 5 4 3 2 1-1 -2-3 -4 29 21 211 Oct Aug Jun Apr Feb Dec Oct Aug Jun Apr Feb Dec Oct Aug Jun Apr Feb 28 26 24 22 Source: BLS March 211 Benchmark, GMU Center for Regional Analysis
Prof. & Bus. Svcs Federal Govt. Educ & Health Svcs State & Local Govt Retail Trade Leisure & Hosp. Construction Other Services Financial Information Manufacturing Wlse Trade Transp. & Util. Job Change by Sector Nov 21 Nov 211 Northern Virginia -3-2 -1 1 1 (s) Total + 12,7 2 2 4 4 4-2 -1 1 2 3 Source: BLS March 21 Benchmark, GMU Center for Regional Analysis
Unemployment Rate 14 12 1 8 6 4 1.2 DC 8.2 U.S. 5.5 SMD 5.4 MSA 4.2 - NVA 2 Source: BLS, Not Seasonally Adjusted
The Economic Impact of Federal Spending on the Maryland-DC-Virginia Region
Federal Spending Trends in DC, Maryland and Virginia,2-21 (in billions of dollars) Area 2 21 %Change % Total ** United States $1,637.2 $3,276.4 1.1 1. District of Columbia 28.2 61.9 119.2 1.9.2 Maryland 45.1 96.3 113.5 2.9 1.9 Virginia 62.7 136.1 117. 4.2 2.6 Total Area $136. $294.3 116.4 9. 4.7 Source: Consolidated Federal Funds Report, 21 ** state population as a percent of US
Total Federal and DOD Spending in DC, Maryland and Virginia, 21 (in billions of dollars) Area Total $s DOD $s % Total % DOD United States $3,276.4 $557. 17. 1. District of Columbia 61.9 8.7 14. 1.6 Maryland 96.3 18.7 19.4 3.4 Virginia 136.1 58.1 42.7 1.4 Total Area $294.3 $85.5 29. 15.4 Source: Consolidated Federal Funds Report, 21
The Commonwealth of Virginia Economy and Federal Spending (in billions of current year dollars) Characteristics 2 21 % Change Gross State Product $265.1 $423.5 59.8 Total Federal Spending $62.7 $136.1 117. Salaries and Wages $12.5 $21.1 69.2 Procurement $21.3 $58.3 173.6 Total DOD Outlays $24.5 $58.1 136.9 Salaries and Wages $8.3 $13.6 65. Procurement $13.5 $4.4 198.3 Sources: Consolidated Federal Funds Reports, 2 and 21
$ Billions 7 6 5 4 3 2 1 Federal Procurement Virginia, 2-21 1-yr Rate of Growth = 1.7%/yr 2 21 22 23 24 25 26 27 28 29 21 Source: Census: Consolidated Federal Funds Reports, GMU Center for Regional Analysis
$ Billions 7 6 5 4 3 2 1 21 Federal Procurement Top 1 States VA CA TX MD DC PA FL MA NY GA Source: Census: Consolidated Federal Funds Reports, GMU Center for Regional Analysis
$ Billions 25 2 Federal Wages & Salaries Virginia, 2-21 1-yr Rate of Growth = 5.4%/yr 15 1 5 2 21 22 23 24 25 26 27 28 29 21 Source: Census: Consolidated Federal Funds Reports, GMU Center for Regional Analysis
$ Billions 35 3 25 2 15 1 5 21 Federal Wages & Salaries Top 1 States TX CA DC VA GA NC MD NY FL WA Source: Census: Consolidated Federal Funds Reports, GMU Center for Regional Analysis
The Commonwealth of Virginia Federal Spending Comparative Metrics 2 21 % of US population 2.5 2.6 % of total federal spending 3.8 4.2 state ranking, total $s 2 2 per capita federal spending $8,859 $17,8 per capita DOD spending $3,476 $7,263 % of total DOD spending 1.3 1.4 state ranking, DOD $s 2 1 Sources: Consolidated Federal Funds Reports, 2 and 21
The Importance of DOD Spending in the Commonwealth of Virginia, 28 (in billions of 28 $s) Source GSP* Personal Earnings Jobs Direct Payroll $22.4 $19.3 339,941 Contracting $33.6 $23.9 537,258 Construction $1.4 $1.1 25,786 Totals $57.4 $44.4 92,985 % of State 15.6 17.4 18.9 Revenues Expenditures Net Benefit Fiscal Impacts** $1,689.38 $593.34 $1,96.4 *gross state product *in millions of dollars
The Changing Role of the Federal Government in the Washington Area
21 Structure of the Greater Washington Economy Non-Local Business 12. % Other Federal 1.7 % Local Serving Activities 34.8% Total Federal 39.8% Fed Wages & Salaries 1.% Procurement 19.1% Source: GMU Center for Regional Analysis
FEDERAL SPENDING WASHINGTON MSA $ Billions TOTAL & PROCUREMENT 18 16 14 12 1 8 6 4 2 1985 1986 1987 1988 1989 199 1991 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 Source: Census Consolidated Federal Funds Report
$ Billions 9 8 7 6 5 4 3 2 1 Federal Procurement Washington Metro Area TOTAL = $862 Billion Source: Census Consolidated Federal Funds Report
s 4 35 Eisenhower Federal Employment Washington Metro Area Kennedy Johnson + 8 Nixon - Ford Carter Reagan Bush 1 Clinton Bush 2 + 36 + 18-6 + 4-42 + 22 Obama +3 3 25-22 2 15 195 1955 196 1965 197 1975 198 1985 199 1995 2 25 21 Source: BLS, GMU Center for Regional Analysis
Federal Government Washington MSA s Annual Data Annual Month over Year 3 25 2 15 1 5-5 -1-15 -2 28 29 21 211 Nov Sep Jul May Mar Jan Nov Sep Jul May Mar Jan Nov Sep Jul May Mar Jan Nov Sep Jul May Mar Jan 26 24 22 Source: BLS March 21 Benchmark, GMU Center for Regional Analysis Tot Nov 21 = 378,
Growth Projections for Federal Spending and GRP: 211-215 (in billions of 21 dollars, annual % change) Year Federal $s WMSA GRP 21 $169. $425. 211 2.% 2.6% 212 1.% 2.7% 213.% 2.9% 214 1.% 3.3% 215 1.5% 3.2% 215 $178.5 $491.2 Change 5.6% 15.6% Source: GMU Center for Regional Analysis
215 Structure of the Greater Washington Economy Non-Local Business 14. % Other Federal 9.5 % Local Serving Activities 34.2% Total Federal 36.3% Fed Wages & Salaries 9.4 % Procurement 17.4% Source: GMU Center for Regional Analysis
Near-Term Economic Outlook for the Washington Metropolitan Area
7 % 6 5 Economic Outlook (GRP) 215 Washington Area and Sub-state Portions (Annual % Change) NV 4 MSA 3 SM 2 DC 1-1 -2 Source: GMU Center for Regional Analysis
Employment Change by Sub-state Region (s) 28 29 21 211 212 213 214 215 D.C. 1.1-2.2 9.5 3.6 4.7 5.8 7.9 7.9 Sub. MD -3.3 3.3-25.1-5.9 2.4 5.3 9.9 11.8 13.2 No. VA 6.1-23. 8.7 14.5 13.6 13.9 16.2 2.2 REGION 12.9-5.3 11.3 2.5 23.6 29.6 35.9 41.3 Average Annual Change 199-21 = 36, Source: BLS, GMU Center for Regional Analysis, 29-215 based on 21 Benchmark data from BLS, Revised 1/9/212
% 8 GDP/GRP 2-215 6 4 Washington 2 U.S. -2-4 214 215 2 21 22 23 24 25 26 27 28 29 21 211 212 213 Source: Global Insight, GMU Center for Regional Analysis
Cardinal Bank & George Mason University 2th Annual Economic Conference Friday, January 13, 212 cra.gmu.edu