The Vermont Economy Newsletter - January 8, 2010 What Kind of Recovery? Vermont’s Economy in 2010 By Richard Heaps

The Vermont Economy Newsletter - JanuarThe Vermont Economy Newsletter - January 8, 2010y 8, 2010

What Kind of Recovery?What Kind of Recovery?Vermont’s Economy in Vermont’s Economy in

20102010

By Richard Heaps


The Vermont Economy TodayThe Vermont Economy Today

The economy hit bottom in late 2009The economy hit bottom in late 2009 The recession has ended and the The recession has ended and the

recovery is starting to take holdrecovery is starting to take hold What is a recoveryWhat is a recovery Labor markets are near bottomLabor markets are near bottom


Spending on Taxable Retail GoodsSpending on Taxable Retail Goods

Year over Year Monthly Change

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

Jan-07 Jan-08 Jan-09


Spending on Meals & RoomsSpending on Meals & Rooms

Year over Year Monthly Change

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

Jan-07 Jan-08 Jan-09


Sales of Vermont HomesSales of Vermont Homes

Qtrly Sales of R1 Houses

0

500

1,000

1,500

2,000

2,500

3,00005-Q

1

06-Q

1

07-Q

1

08-Q

1

09-Q

1


Prices of Vermont HomesPrices of Vermont Homes

Median Price of R1 Houses

$0

$50,000

$100,000

$150,000

$200,000

$250,000

2001

2002

2003

2004

2005

2006

2007

2008

2009


Incomes of VermontersIncomes of Vermonters

Inflation-Adjusted Median Family Income

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

est


Vermont Job Growth: 2005-09Vermont Job Growth: 2005-09Nonfarm Employment (SA)

285.0

290.0

295.0

300.0

305.0

310.0

315.0Ja

n-0

5

Jul-05

Jan-0

6

Jul-06

Jan-0

7

Jul-07

Jan-0

8

Jul-08

Jan-0

9

Jul-09


Job Changes: Jan 08 to Nov 09Job Changes: Jan 08 to Nov 09

SectorsSectors Job ChangeJob Change

AllAll -13,700-13,700

Private sectorPrivate sector -12,900-12,900

Public sectorPublic sector -800-800


Job Changes: Jan 08 to Nov 09Job Changes: Jan 08 to Nov 09

IndustryIndustry Job ChangeJob Change

Health care & social assistanceHealth care & social assistance +3,700+3,700

RetailRetail -3,400-3,400

ManufacturingManufacturing -5,200-5,200

Leisure & hospitalityLeisure & hospitality -2,400-2,400

Prof. & business servicesProf. & business services -1,900-1,900

ConstructionConstruction -3,700-3,700


Unemployment Up in 2009Unemployment Up in 2009

Vermont Unemployment Rate

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Jan 2007 Jan 2008 Jan 2009


Job Losses Across VermontJob Losses Across Vermont(Q2 08 to Q2 09)(Q2 08 to Q2 09)

RegionRegion Jobs LostJobs Lost % Lost% Lost

SouthernSouthern -5,541-5,541 -6.0%-6.0%

NorthwestNorthwest -3,658-3,658 -2.9%-2.9%

NortheastNortheast -1,007-1,007 -4.3%-4.3%

CentralCentral -1,804-1,804 -3.5%-3.5%

All VermontAll Vermont -11,328-11,328 -3.7%-3.7%


How Bad is this Recession?How Bad is this Recession?

Employment Change in Recent Vermont Recessions

94

96

98

100

0 6 12 18 24 30 36 42 48 54 60

Months past peak employent level

1981-832001-04

1989-94

2008-?


2010: The Start of the2010: The Start of theEconomic RecoveryEconomic Recovery

How a recovery developsHow a recovery develops

When will it start?When will it start?

Why measure by job growth?Why measure by job growth?


Path of this RecoveryPath of this Recovery

The Recovery

94.0

96.0

98.0

100.0

0 6 12 18 24 30 36 42 48 54 60

Months past peak employent level

1981-83 2001-04

1989-94

2008-2014


Where Will the New Jobs Be?Where Will the New Jobs Be?

From 2010 to 2012, about a 3% gain or From 2010 to 2012, about a 3% gain or 8,000 jobs8,000 jobs

Nearly all in the private sectorNearly all in the private sector

All sectors participate in the recoveryAll sectors participate in the recovery

Health care leads – one-third of all new Health care leads – one-third of all new jobsjobs


VT Unemployment RateVT Unemployment Rate

Vermont’s economy will look better Vermont’s economy will look better measured by the unemployment ratemeasured by the unemployment rate

It is 6.4% now?It is 6.4% now?

Rises to 7.0% for 2010Rises to 7.0% for 2010

Falls to 6.2% in 2011 and 5.3% in 2012Falls to 6.2% in 2011 and 5.3% in 2012


Vermont Real Family IncomesVermont Real Family Incomes

2008 and 2009 were -2.7% & -2.5%2008 and 2009 were -2.7% & -2.5%

2010 – just a 0.5% gain2010 – just a 0.5% gain

2011 – back to normal +2% to +3% 2011 – back to normal +2% to +3%


Housing RecoversHousing Recovers

What is recovery?What is recovery?

Existing home sales up 30% in 2010 to Existing home sales up 30% in 2010 to 11,000 units --- then flat11,000 units --- then flat

Prices fall another 5% in 2010 --- then flatPrices fall another 5% in 2010 --- then flat

New permits modestly grow in 2010, then New permits modestly grow in 2010, then up 20% in 2011 and 30% in 2012up 20% in 2011 and 30% in 2012

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The Vermont Economy Newsletter - January 8, 2010 What Kind of Recovery? Vermont’s Economy in 2010 By Richard Heaps