2011 economicworkforceoverview

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2011 Economic & Workforce Overview from the Maricopa Community Colleges Center for Workforce Development

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2011 economicworkforceoverview

  1. 1. Paradise Valley Community College<br />Economic and Workforce Overview<br />John CatapanoResearch and Communications Coordinator Center for Workforce Development<br />January 14, 2011<br />1<br />
  2. 2. U.S. Economic Overview<br />The Great Recession is over!<br />(but it hasn’t felt much like a recovery)<br />The recovery slowed in the second half of 2010. <br />2<br />
  3. 3. Economic Recovery – A Long Way to Go<br />December 2007<br />Economy Peaks<br />June 2009<br />Economy Bottoms<br />3<br />
  4. 4. Economic Recovery – A Long Way to Go<br />December 2007<br />Economy Peaks<br />Recovery: We are Here<br />X<br />June 2009<br />Economy Bottoms<br />4<br />
  5. 5. Growth in Real GDP<br />2007 Q1 to 2010 Q3 (annualized)<br />5<br />
  6. 6. Consumer Spending<br />July 2000 to Present (billions of dollars)<br />6<br />
  7. 7. Consumer Spending<br />July 2000 to Present (billions of dollars)<br />5.1% Growth Path<br />3.1% Growth Path<br />7<br />
  8. 8. U.S. Employment Growth<br />January 2007 to Present (month over month, in thousands)<br />8<br />
  9. 9. U.S. Private Sector Employment Growth<br />January 2007 to Present (month over month, in thousands)<br />9<br />
  10. 10. Negative Jobs Feedback Loop<br />Limited Job Growth<br />10<br />
  11. 11. Negative Jobs Feedback Loop<br />Limited Job Growth<br />Little Job Security<br />11<br />
  12. 12. Negative Jobs Feedback Loop<br />Limited Job Growth<br />Little Job Security<br />Depressed Consumer Confidence<br />12<br />
  13. 13. Negative Jobs Feedback Loop<br />Limited Job Growth<br />Little Job Security<br />Depressed Consumer Confidence<br />Modest Consumer Spending<br />13<br />
  14. 14. Negative Jobs Feedback Loop<br />Limited Job Growth<br />Little Job Security<br />Business Uncertainty<br />Depressed Consumer Confidence<br />Modest Consumer Spending<br />14<br />
  15. 15. Negative Jobs Feedback Loop<br />Limited Job Growth<br />Little Job Security<br />Business Uncertainty<br />Depressed Consumer Confidence<br />Modest Consumer Spending<br />15<br />
  16. 16. Percent Job Losses in Post WWII Recessions<br />16<br />
  17. 17. Consumer Confidence1978 to Present<br />17<br />
  18. 18. Consumer Confidence Index1978 to Present<br />18<br />
  19. 19. U.S. Unemployment RateJanuary 2000 to Present<br />19<br />
  20. 20. U.S. Median Duration of Unemployment<br />In Weeks, January 2000 to Present<br />20<br />
  21. 21. U.S. Initial Claims for Unemployment InsuranceJanuary 2007 to Present (in thousands)<br />21<br />
  22. 22. Why Did the Recovery Stall?<br />Uncertainty<br />Stock market down over summer 2010<br />European debt crisis<br />Consumer confidence waivered due to poor job prospects<br />Housing market continues to be a drag on the economy<br />Banks have been reluctant to lend<br />Impact of healthcare reform<br />November elections<br />Concern about the deficit/debt<br />End of federal stimulus<br />22<br />
  23. 23. Dow Jones Industrial Average<br />2007 to Present<br />23<br />
  24. 24. Growth in Real GDP<br />2007 Q1 to 2010 Q3 (annualized)<br />24<br />
  25. 25. Financial Bailouts and Stimulus Saved Us from Another Great Depression<br />Without Federal Intervention:<br />GDP in 2010 would have been about 11.5% lower<br />Employment would be less by 8.5m (on top of 8.4m)<br />Unemployment rate would be around 16%<br />The U.S. would now be experiencing deflation<br />25<br />
  26. 26. The Economy is Expected to Pick Up in 2011 After a Weak Second Half of 2010<br />Interest rates are low<br />Inflation is nowhere in sight<br />Banks are easing lending standards<br />Corporate profits are up<br />Consumers are showing signs of life<br />Incomes, employee hours, and productivity is up<br />Manufacturing is growing<br />The private sector is adding jobs<br />Unemployment rate is heading down<br />The global economy is back<br />26<br />
  27. 27. What Could Derail the Recovery?<br />Slow job growth<br />Continued weak housing market<br />Financial sector holding back on lending<br />Deficit/debt<br />Rising energy prices<br />State/local government budgets<br />27<br />
  28. 28. Arizona Economic Overview<br />Arizona’s recession is over!<br />(About six months after the U.S.)<br />28<br />
  29. 29. Arizona Was Hit Hard<br />The state lost 363,200 nonfarm jobs (13.4%) from peak (December 2007) to trough (July 2010)<br />The state is unlikely to recover 2007 employment levels before 2014 – a seven-year correction!<br />In 2006 Arizona ranked 2nd in job growth among states, in 2009 we were 49th (thank you, Nevada)<br />Arizona ranked 49th in per-capita personal income growth in 2008 (thank you, Nevada), and 45th in 2009<br />State GDP decreased 3.9% in 2009, ranking Arizona 47th nationwide<br />In 2009 Greater Phoenix was suffering some of the worst employment losses among large metros, <br />29<br />
  30. 30. AZ Bounces Back from Recession<br />State Rank Based on Monthly Year/Year Growth Rates<br />30<br />
  31. 31. AZ Bounces Back from Recession<br />State Rank Based on Monthly Year/Year Growth Rates<br />32nd<br />31<br />
  32. 32. AZ Bounces Back from Recession<br />State Rank Based on Monthly Year/Year Growth Rates<br />2nd<br />32nd<br />32<br />
  33. 33. AZ Bounces Back from Recession<br />State Rank Based on Monthly Year/Year Growth Rates<br />2nd<br />18th<br />32nd<br />33<br />
  34. 34. AZ Bounces Back from Recession<br />State Rank Based on Monthly Year/Year Growth Rates<br />2nd<br />1st<br />18th<br />32nd<br />34<br />
  35. 35. AZ Bounces Back from Recession<br />State Rank Based on Monthly Year/Year Growth Rates<br />2nd<br />1st<br />19th<br />18th<br />32nd<br />35<br />
  36. 36. AZ Bounces Back from Recession<br />State Rank Based on Monthly Year/Year Growth Rates<br />2nd<br />1st<br />2nd<br />19th<br />18th<br />32nd<br />36<br />
  37. 37. AZ Bounces Back from Recession<br />State Rank Based on Monthly Year/Year Growth Rates<br />2nd<br />1st<br />2nd<br />19th<br />12th<br />18th<br />32nd<br />37<br />
  38. 38. AZ Bounces Back from Recession<br />State Rank Based on Monthly Year/Year Growth Rates<br />2nd<br />1st<br />2nd<br />2nd<br />19th<br />12th<br />18th<br />32nd<br />38<br />
  39. 39. AZ Bounces Back from Recession<br />State Rank Based on Monthly Year/Year Growth Rates<br />2nd<br />1st<br />2nd<br />2nd<br />19th<br />12th<br />18th<br />32nd<br />49th<br />39<br />
  40. 40. AZ Bounces Back from Recession<br />State Rank Based on Monthly Year/Year Growth Rates<br />2nd<br />1st<br />2nd<br />2nd<br />11th<br />19th<br />12th<br />18th<br />32nd<br />49th<br />40<br />
  41. 41. Employment Growth, AZ v. U.S.<br />January 2006 to Present (percent change, year ago)<br />41<br />
  42. 42. Worst Metro Job Loss 2009Job Loss – November 2009 vs. November 2008 Labor Force > One Million<br />42<br />
  43. 43. Best Metro Job Growth 2010Job Gains – November 2010 vs. November 2009 Labor Force > One Million<br />43<br />
  44. 44. AZ Unemployment RateJanuary 2000 to Present<br />44<br />
  45. 45. AZ Initial Claims for Unemployment InsuranceJanuary 2007 to Present (four-week moving average)<br />45<br />
  46. 46. Arizona’s Early Recovery – Mixed Results<br />Retail sales are up, wages and salaries are improving<br />Employment growth exceeded U.S. in second half of 2009 (2.6% to 0.4%), but slowed in 2010<br />Jobs will be added in 2011:<br />ADOC - Up 16,500 jobs (or 0.7%)<br />U of A – Up 39,600 (or 1.7%)<br />ASU – 47,900 (or 2.0%)<br />To get back to 2007 employment levels, Arizona will need to add 66,000 jobs a year for four years<br />Negative population growth?<br />Headwinds to recovery:<br />Housing market<br />State budget<br />Consumers<br />46<br />
  47. 47. AZ Industries in RecoveryEmployment Today is Greater Than a Year Ago<br />47<br />
  48. 48. AZ Industries Still StrugglingEmployment Today is Less Than a Year Ago<br />48<br />
  49. 49. Arizona’s Budget Woes<br /><ul><li>Within Education, 1980-2010:
  50. 50. K-12 +1%
  51. 51. Universities -8%
  52. 52. Within H&W:
  53. 53. DES/DHS -3%
  54. 54. AHCCCS +13%</li></ul>Sales and Income taxes more vulnerable to recession<br />49<br />
  55. 55. Arizona’s Budget WoesArizona General Fund Total and Projections, 2002-2014 (in billions)<br />$2 Billion<br />50<br />
  56. 56. Arizona Won’t Truly Recover Until Housing Improves<br />Excess supply of homes – 50,000 to 75,000 in Greater Phoenix alone<br />Home prices down about 50%<br />Arizona is one of the worst performing states for mortgage delinquencies and foreclosures<br />New home construction has all but ceased<br />Commercial real estate market is hurting<br />Housing and jobs – a negative feedback loop<br />On the positive side - housing is now much more affordable, and interest rates are at historic lows<br />51<br />
  57. 57. Greater Phoenix Home Price ValuesCase-Shiller Index of Repeat Sales, January 2000 to Present<br />52<br />
  58. 58. Implications for MCCCD<br />For MCCCD, the recession is a double-edged sword<br />Enrollment is up<br />But fewer resources are available<br />Look for new program area opportunities, but don’t forget the bread-and-butter (healthcare, IT, business, public safety)<br />Short-term - Negative population growth in Arizona?<br />Long-term - Arizona is projected to add 2.6m nonfarm jobs between 2010 and 2040. Many will be in Maricopa County. MCCCD will play a vital role in training<br />The district’s continued focus should be on high-wage, high-skill jobs to reduce the region’s vulnerability to recessionary cycles<br />53<br />
  59. 59. Questions?<br />john.catapano@domail.maricopa.edu<br />54<br />

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