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Economic Update - Good Morning Greater Spokane - May 10, 2013
 

Economic Update - Good Morning Greater Spokane - May 10, 2013

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Steve Scranton, Chief Investment Officer at Washington Trust Bank, gave an economic update presentation at the Good Morning Greater Spokane program on May 10, 2013.

Steve Scranton, Chief Investment Officer at Washington Trust Bank, gave an economic update presentation at the Good Morning Greater Spokane program on May 10, 2013.

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    Economic Update - Good Morning Greater Spokane - May 10, 2013 Economic Update - Good Morning Greater Spokane - May 10, 2013 Presentation Transcript

    • Good Morning GreaterSpokaneEconomic UpdateSteve Scranton, CFAChief Investment OfficerWashington Trust Bank
    • Why Continued Slow EconomicGrowth?-10-8-6-4-20246Jan-08Jan-09Jan-10Jan-11Jan-12Jan-13Real Gross Domestic Product(GDP Annualized Change from Preceding Quarter)
    • Slow Wage Growth Has Led To…-3.00%-2.00%-1.00%0.00%1.00%2.00%3.00%4.00%5.00%6.00%Mar-07Jun-07Sep-07Dec-07Mar-08Jun-08Sep-08Dec-08Mar-09Jun-09Sep-09Dec-09Mar-10Jun-10Sep-10Dec-10Mar-11Jun-11Sep-11Dec-11Mar-12Jun-12Sep-12Dec-12Mar-13Year-Over-Year Real Wage Growth
    • …Drawing Down Savings, Which HasLed To……0123456789Dec-2007Feb-2008Apr-2008Jun-2008Aug-2008Oct-2008Dec-2008Feb-2009Apr-2009Jun-2009Aug-2009Oct-2009Dec-2009Feb-2010Apr-2010Jun-2010Aug-2010Oct-2010Dec-2010Feb-2011Apr-2011Jun-2011Aug-2011Oct-2011Dec-2011Feb-2012Apr-2012Jun-2012Aug-2012Oct-2012Dec-2012Feb-2013Personal Savings Rate
    • …Slower Consumer Spending-20.00%-15.00%-10.00%-5.00%0.00%5.00%10.00%15.00%Dec-07Feb-08Apr-08Jun-08Aug-08Oct-08Dec-08Feb-09Apr-09Jun-09Aug-09Oct-09Dec-09Feb-10Apr-10Jun-10Aug-10Oct-10Dec-10Feb-11Apr-11Jun-11Aug-11Oct-11Dec-11Feb-12Apr-12Jun-12Aug-12Oct-12Dec-12Feb-13Retail SalesYOY Change
    • Employment is Slowly Recovering…124000126000128000130000132000134000136000138000140000Jan-2007Mar-2007May-2007Jul-2007Sep-2007Nov-2007Jan-2008Mar-2008May-2008Jul-2008Sep-2008Nov-2008Jan-2009Mar-2009May-2009Jul-2009Sep-2009Nov-2009Jan-2010Mar-2010May-2010Jul-2010Sep-2010Nov-2010Jan-2011Mar-2011May-2011Jul-2011Sep-2011Nov-2011Jan-2012Mar-2012May-2012Jul-2012Sep-2012Nov-2012Jan-2013Mar-2013U.S. Non-Farm Payrolls
    • …But Fewer Citizens Have Jobs61.56262.56363.56464.56565.56666.567Jan-07Mar-07May-07Jul-07Sep-07Nov-07Jan-08Mar-08May-08Jul-08Sep-08Nov-08Jan-09Mar-09May-09Jul-09Sep-09Nov-09Jan-10Mar-10May-10Jul-10Sep-10Nov-10Jan-11Mar-11May-11Jul-11Sep-11Nov-11Jan-12Mar-12May-12Jul-12Sep-12Nov-12Jan-13Mar-13Labor Participation Rate
    • The Myth of The Baby BoomersCausing the Drop in the Labor Force0500010000150002000025000300003500040000(000s)MonthChange in Civilian Labor Force16-17 18-19 20-24 25-34 35-44 45-54 55+
    • Focus on Jobs Creation
    • Spokane Does Not NecessarilyReflect the U.S.
    • Consumer Spending is Trending Up….-15.00%-10.00%-5.00%0.00%5.00%10.00%15.00%Spokane YOY GrowthRetail Sales
    • …Because Our Wage Mix Has Changed• Job losses since 2011Category Average Salary– Retail trade $27,537– Leisure/hospitality $16,101– Doug Tweedy, Labor Economist, Employment Security Department, State of Washington
    • Our Wage Mix Has Changed• Job gains since 2011Category Average Salary– Financial Service $60,883– Professional, Scientific and Tech $49,378– Manufacturing $48,601– Health Care $44,022– Doug Tweedy, Labor Economist, Employment Security Department, State of Washington
    • Jobs Creation is Still the Challenge185.0190.0195.0200.0205.0210.0215.0220.0225.0Jan-07Mar-07May-07Jul-07Sep-07Nov-07Jan-08Mar-08May-08Jul-08Sep-08Nov-08Jan-09Mar-09May-09Jul-09Sep-09Nov-09Jan-10Mar-10May-10Jul-10Sep-10Nov-10Jan-11Mar-11May-11Jul-11Sep-11Nov-11Jan-12Mar-12May-12Jul-12Sep-12Nov-12Jan-13Mar-13Spokane Non-Farm Payroll
    • Conclusions• Expect 1-3% economic growth to continue• Expect low interest rates to continue untileconomy strengthens or inflation movesabove 2.5%• Avoid “Puget Sound” envy!