Regional Outlook STEVEN G. COCHRANE, MANAGING DIRECTOR
Differences Narrow; Southeast Vies for Lead Employment, % change yr ago 3.5 3.0 Southwest 2.5 2.0 1.5 East South Central South Atlantic Northeast West 1.0 0.5 Midwest 13 14 15 16 17 Sources: BLS, Moody s Analytics 2017 data through Feb 2
Broad Job Growth Total payroll employment, Feb 2017, 3-mo MA, % change yr ago U.S.=1.6 <0 0 to <1.6 1.6 to <3 3 to 6 Sources: BLS, Moody s Analytics
Still Only a Few Extremely Tight Labor Markets Unemployment rate, %, Feb 2017 U.S.=4.7 >5.8 Near avg 3.1 to 4.1 <3.1 Sources: BLS, Moody s Analytics
Payroll Employment Northeast MSAs 1-yr vs. 3-mo performance (3-mo. MA) Improving Annualized 3-mo % change Middle Atlantic New England South Atlantic United States Contracting -1 Note: Size reflects relative total employment 5 4 3 2 Bridgeport Pittsburgh 1 Silver Spring Hartford Newark Albany Cambridge Nassau Baltimore % change yr ago Montgomery Boston Buffalo New Haven ProvidenceTrenton Camden New York Washington September March 2016 2017 Philadelphia Expanding 0 Syracuse -1 0 1 2 3 4 Rochester Manchester Allentown Slipping 5
Payroll Employment Midwest MSAs 1-yr vs. 3-mo performance (3-mo. MA) Improving Annualized 3-mo % change West North Central East North Central United States Contracting Peoria Note: Size reflects relative total employment Elgin 6 5 4 3 2 1-2 -3-4 Cleveland Akron Wichita % change yr ago Kansas City Fort Wayne Minneapolis Dayton Lake County Fargo Chicago September March 2016 2017 Expanding Toledo Madison Detroit Warren Cincinnati Omaha Grand Rapids 0 Milwaukee -3-2 -1 0 1 2 3-1 Gary St. Louis Indianapolis Ann Arbor Des Moines Columbus Lansing Slipping 6
Payroll Employment South MSAs 1-yr vs. 3-mo performance (3-mo. MA) Improving Annualized 3-mo % change South Atlantic East South Central West South Central United States Contracting New Orleans -2 Note: Size reflects relative total employment 7 6 5 4 3 2 1 % change yr ago Miami San Antonio Fort Lauderdale Memphis Fort Worth September March 2016 2017 Atlanta Nashville Dallas Expanding Orlando Charlotte Austin Raleigh Tampa 0-2 -1-1 0 Houston 1 2 3 4 5 Oklahoma City Greensboro Birmingham Richmond Little Rock Virginia Beach Greenville Louisville West Palm Beach Jacksonville Slipping 7
Payroll Employment West MSAs 1-yr vs. 3-mo performance (3-mo. MA) Improving Annualized 3-mo % change Pacific Mountain United States Contracting -2 Note: Size reflects relative total employment 6 5 4 3 2 1 Honolulu Albuquerque Boulder Colorado Springs Oxnard San Diego Anaheim Spokane San Jose Portland Denver Los Angeles % change yr ago Phoenix Oakland Las Vegas Seattle September March 2016 2017 Sacramento Provo San Francisco Riverside Salt Lake City Fresno Boise City Expanding 0-2 -1-1 0 1 2 3 4 5 6 Slipping 8
Little Labor Force Growth in Northeast Labor force, % change, 2008Q4 to 2016Q4 U.S.=3.1 Decline 0 to 3.1 3.2 to 7 >7 Sources: BLS, Moody s Analytics
Held Back by State-to-State Migration Net domestic migration, 2016, rate per 1,000 population 3 to 12 Near zero -3 to -10 Sources: Census Bureau, Moody s Analytics 10
And Dependence on Immigration Net international migration, 2016, rate per 1,000 population 3.3 to 6.1 Near avg 0.5 to 1.7 U.S.=3.1 Sources: Census Bureau, Moody s Analytics 11
Supported Partly by H-1B Visas H-1B visa applications, by location of work, % of total jobs, 2016 Sources: ACS, Moody s Analytics U.S.=3.9 <0.35 0.35 to 3.4 3.5 to 7.7 >7.8 12
Most Larger Metro Areas Attract More Labor Labor force, % change, 2008Q4 to 2016Q4 Decline 0 to 3.1 3.2 to 7 >7 Sources: BLS, Moody s Analytics U.S.=3.1
Wage Composition Still Uneven Employment growth by wage cohort, % change yr ago, Feb 2017 2.5 Low Mid High 2.0 1.5 1.0 0.5 0.0 Northeast Midwest South West Sources: BLS, BEA, Moody s Analytics 14
Broad-Based Job Growth Missing in Northeast Diffusion index, employment by 3-digit NAICS code, Feb 2017 3-mo MA >58.4 Near metro avg <47.7 Sources: BLS, Moody s Analytics U.S.=62 Avg of metro areas=53.1 15
Strong Wage Income Growth in the West Wage and salary income, % change yr ago 10 Northeast Midwest South West PCE deflator 8 6 4 2 0 11 12 13 14 15 16 Sources: BEA, Moody s Analytics 16
Homebuilding Finally Responds in the West Residential construction starts, Jan 2011=100, 3-mo MA, SAAR 300 275 250 225 200 175 150 125 100 75 50 Northeast Midwest South West 11 12 13 14 15 16 17 Sources: Census Bureau, Moody s Analytics 17
Vacant Stock on Market Is at Cyclical Low Vacant homes for sale or rent, % of housing stock, 4-qtr MA 6.0 5.5 Midwest South 5.0 4.5 4.0 3.5 3.0 2.5 U.S. West Northeast 2.0 93 95 97 99 01 03 05 07 09 11 13 15 Sources: Census Bureau, Moody s Analytics 18
West and Texas Begin to Overheat FHFA all-transactions index, % above equilibrium trend, 2016Q4 Sources: FHFA, BEA, Census Bureau, Moody s Analytics U.S.=0.4 <-10-9.99 to <0 0 to 9.99 >10 19
Florida and the Coasts Have Larger Rent Burdens Gross median rent, % of median household income, 2015 Sources: Census Bureau, Moody s Analytics U.S.=20.6 13.2 to 15.9 16 to 20.5 20.6 to 24.9 25 to 31.8 20
Exports Are Improving Again Merchandise exports, nominal value, Jan 2009=100 200 Northeast Midwest South West 180 160 140 120 100 80 09 10 11 12 13 14 15 16 17 Sources: Census Bureau, Moody s Analytics 21
But Might Be Overstated by Surveys Composite manufacturing index, harmonized 62 60 PHL NEY RIC KAN DAL 58 56 54 52 50 48 46 44 42 15 16 17 Sources: Federal Reserve, Moody s Analytics 22
Manufacturing Jobs Return: Energy and Tech Manufacturing employment, Jan 2014=100 108 106 104 Great Lakes Southeast Mountain 102 100 98 Plains Northeast Pacific 96 94 Southwest 14 15 16 17 Sources: BLS, Moody s Analytics 23
Midwest Is Most Export-Intensive Region Total exports, goods and commodities, % of GMP, 2015 <3.3 3.3 to 14 >14 Sources: BEA, Census Bureau, ITA, Moody s Analytics 24
Balance of Trade Favors Ag Commodity Areas Net merchandise exports, % share of GSP 2015 U.S.=-3.9 >0.2 Near avg <-5.1 Sources: BEA, Census Bureau, Moody s Analytics 25
Entrepreneurship Creates Jobs in West, Northeast Jobs created by new firms, % of total employment, 2010-2014 avg Sources: BLS, Moody s Analytics <1.49 Near avg >1.81 U.S.=1.65 26
Northeast: Modest Outlook Employment, % change yr ago Philadelphia Montgomery PA Cambridge MA Boston New York Long Island NY U.S. Washington Providence RI Baltimore Pittsburgh Newark NJ 2016Q4 2017Q4 Sources: BLS, Moody s Analytics 0 1 2 3 4 27
Midwest: Mostly Stable Employment, % change yr ago Columbus OH Indianapolis Kansas City MO Warren MI Cincinnati Detroit Minneapolis U.S. St. Louis Chicago Cleveland Milwaukee Lake County IL 2016Q4 2017Q4 Sources: BLS, Moody s Analytics -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 28
South: Energy Regions Pick Up Employment, % change yr ago Dallas Austin TX Orlando FL Atlanta Charlotte NC Tampa FL Ft. Lauderdale San Antonio TX Miami Ft. Worth TX U.S. Birmingham AL Houston Virginia Beach VA 2016Q4 2017Q4 Sources: BLS, Moody s Analytics 0 1 2 3 4 5 29
West: Constrained by Labor Markets Employment, % change yr ago Seattle San Francisco Las Vegas Oakland CA Riverside CA Phoenix Sacramento CA San Jose CA Portland OR Denver San Diego Los Angeles U.S. Santa Ana CA Sources: BLS, Moody s Analytics 2016Q4 2017Q4 0 1 2 3 4 30
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