Robert A. Kleinhenz, Ph.D. Chief Economist, Kyser Center for Economic Research, LAEDC The Economy and Poverty in Los Angeles County MENDing Poverty Conference.

Robert A. Kleinhenz, Ph.D.Chief Economist, Kyser Center for Economic Research, LAEDC

The Economy and Poverty in Los Angeles County

MENDing Poverty Conference

June 9, 2015

Kyser Center for Economic Research

• U.S. Economy

• California Economy

• L.A. County Economy

• Income & Poverty in the County

• Conclusion


Outline


U.S. Economy

Jan-

90

Jan-

92

Jan-

94

Jan-

96

Jan-

98

Jan-

00

Jan-

02

Jan-

04

Jan-

06

Jan-

08

Jan-

10

Jan-

12

Jan-

140.0%

5.0%

10.0%

15.0%

U.S. Average 1990-Now

U.S. Unemployment Rate

Source: US Bureau of Labor StatisticsKyser Center for Economic Research

Seasonally Adjusted, May 2015: 5.5%

Source: US Bureau of Economic AnalysisKyser Center for Economic Research

Real Gross Domestic ProductAnnual % change

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

GDP 15Q1: -0.7%


Key Sectors of Macroeconomy

Consumer Sector

Business Sector

Government

International Trade


*

Forecast Source: LAEDC (May 2015)Kyser Center for Economic Research

U.S. Economic Forecast

2012 2013 2014 2015f 2016f

Real GDP - Annual % Chg.

2.3% 2.2% 2.4% 2.5% 2.8%

Nonfarm Jobs - Annual % Chg.

1.7% 1.7% 1.9% 2.0% 1.7%

Unemployment Rate 8.1% 7.4% 6.2% 5.4% 5.1%

Consumer Prices - Annual % Chg.

2.1% 1.5% 1.6% 0.3% 2.2%


U.S. Outlook – What to Watch

Oil Prices

Fed Policy

Global Outlook

Wage Gains



Household Purchasing Power Falling


19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

40

45

50

55

60

56.9 56.4

51.9

Median HH Income in Thousands of 2013 Dollars

Source: Census Bureau


California Economy

Jan-

90

Jan-

92

Jan-

94

Jan-

96

Jan-

98

Jan-

00

Jan-

02

Jan-

04

Jan-

06

Jan-

08

Jan-

10

Jan-

12

Jan-

140.0%

5.0%

10.0%

15.0%

6.3%

U.S. CA

Labor Mkts in US & CA Nearly Healed

Source: US BLS, CA EDDKyser Center for Economic Research

Unemployment Rate

Jan

-07

Jan

-08

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Jan

-14

Jan

-15

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

US CA

California Adding Jobs Faster than U.S.

Source: US BLS, CA EDDKyser Center for Economic Research

YTY % change in nonfarm jobs, seasonally adjusted

Forecast Source: LAEDCKyser Center for Economic Research

California Economic Forecast

2012 2013 2014 2015f 2016f

Nonfarm Jobs - annual % chg.

2.4% 3.0% 2.2% 2.2% 2.1%

Unemployment Rate 10.4% 8.9% 7.5% 6.7% 6.3%

Personal Income - annual % chg.

7.1% 2.8% 4.7% 4.4% 5.1%

Total Taxable Sales - % chg.

7.3% 5.8% 5.7% 4.2% 6.1%

Housing Permits - thousands of units

57.6 82.3 85.3 110.0 135.6

Los Angeles County


Source: CA EDD, Labor Market Information DivisionKyser Center for Economic Research

Local Unemployment Rates

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%LA - 7.1% OC - 4.1% IE - 6.2%Apr 2015


Los Angeles County Nonfarm JobsJa

n-0

8A

pr-

08

Jul-

08

Oct

-08

Jan

-09

Ap

r-0

9Ju

l-0

9O

ct-0

9Ja

n-1

0A

pr-

10

Jul-

10

Oct

-10

Jan

-11

Ap

r-1

1Ju

l-1

1O

ct-1

1Ja

n-1

2A

pr-

12

Jul-

12

Oct

-12

Jan

-13

Ap

r-1

3Ju

l-1

3O

ct-1

3Ja

n-1

4A

pr-

14

Jul-

14

Oct

-14

Jan

-15

Ap

r-1

5

-8.0%

-7.0%

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%Apr 2015: +109,600; 2.6%

Source: CA EDD, Labor Market Information Division

YTY % change in nonfarm jobs


LA County Nonfarm Employment

2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD

2.0

2.5

3.0

3.5

4.0

4.54.23 4.19

3.95 3.89 3.914.01

4.134.23 4.29


Millions of Nonfarm Jobs

Job Trends by Industry – Los Angeles

Manufacturing

Professional, Scientific & Technical Services

Financial Activities

Government

Retail Trade

Health Care & Social Assistance

Administrative & Support & Waste Services

Transportation, Warehousing & Utilities

Information

Leisure & Hospitality

Wholesale Trade

Educational Services

Construction

-2% 0% 2% 4% 6% 8%

-0.1%0.1%

0.7%2.1%2.2%

2.6%2.9%

3.5%3.6%

4.3%4.4%

6.6%6.6%

YTY % change in nonfarm employment by industry, not seasonally adjusted


Apr 2015: +109,600 jobs, +2.6% YTY; u-rate: 7.1%


Major Industries in Los Angeles County

TRADED INDUSTRIES

(Generate New Income)

• International Trade• Entertainment• Business Services• Aerospace• Fashion & Apparel• Tourism• Knowledge Creation

LOCAL INDUSTRIES(Circulate Income)

• Retail Sales• Leisure & Hospitality• Health Care/Social

Assistance• Nonprofit Sector


2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

'14Y

TD

'15Y

TD

11.813.1

14.215.8 15.7

14.3

11.8

14.1 14 14.1 14.6 15.2

4.71975614.57447504999998

Millions of TEUs

Container Throughput San Pedro Bay Ports

Sources: Ports of Los Angeles and Long Beach; forecast by LAEDCKyser Center for Economic Research

Apr 2015 YTD: -3.1%

Year-to- Date


L.A. County Trans/Warehousing & Wholesale Employment

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

40,000

90,000

140,000

190,000

240,000

290,000

340,000Apr 2015 YTY: Trans/Warehousing/Util. +5,600 jobs, +3.5%

Wholesaling +3,700 jobs, +3.1%


On-Location Film Production Days by Type

Source: Film LAKyser Center for Economic Research

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

10

20

30

40

50

60

Feature Films Television Commercials Other

Production Days, 1000s


L.A. County Motion Picture & Sound Recording Employment


Jan-

08

May

-08

Sep-0

8

Jan-

09

May

-09

Sep-0

9

Jan-

10

May

-10

Sep-1

0

Jan-

11

May

-11

Sep-1

1

Jan-

12

May

-12

Sep-1

2

Jan-

13

May

-13

Sep-1

3

Jan-

14

May

-14

Sep-1

4

Jan-

150

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000Apr 2015 YTY: +3,700 jobs, +3.1%


L.A. County Manufacturing Employment

Jan-

08

May

-08

Sep-0

8

Jan-

09

May

-09

Sep-0

9

Jan-

10

May

-10

Sep-1

0

Jan-

11

May

-11

Sep-1

1

Jan-

12

May

-12

Sep-1

2

Jan-

13

May

-13

Sep-1

3

Jan-

14

May

-14

Sep-1

4

Jan-

150

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000Durable Goods Nondurable Goods

Apr 2015 YTY – Durable: +500, +0.2% | Nondurable: -900, -0.6%


Manufacturing Trends


Adding Jobs: Metal Mfg Furniture Pharmaceuticals Miscellaneous

Durable Goods

Losing Jobs: Machinery Mfg Petro-Chemical Food (slightly) Aerospace (slightly) Electronics Apparel/Textiles


L.A. County Professional & Business Services Employment

Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

200,000

250,000

300,000

350,000

400,000

450,000

500,000

550,000

600,000

650,000Apr 2015 YTY: +10,400 jobs, +1.7%



L.A. County Retail Employment

Feb-0

8

Jun-

08

Oct-0

8

Feb-0

9

Jun-

09

Oct-0

9

Feb-1

0

Jun-

10

Oct-1

0

Feb-1

1

Jun-

11

Oct-1

1

Feb-1

2

Jun-

12

Oct-1

2

Feb-1

3

Jun-

13

Oct-1

3

Feb-1

4

Jun-

14

Oct-1

4

Feb-1

50

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000Apr 2015 YTY: +8,800 jobs, +2.2%


Jan

-08

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

0

50000

100000

150000

200000

250000

300000

350000

400000

450000

500000


L.A. County Leisure & Hospitality Employment

Apr 2015 YTY: +19,700 jobs, +4.3%



L.A. Health Care and Social Assistance Employment

Feb-0

8

Jun-

08

Oct-0

8

Feb-0

9

Jun-

09

Oct-0

9

Feb-1

0

Jun-

10

Oct-1

0

Feb-1

1

Jun-

11

Oct-1

1

Feb-1

2

Jun-

12

Oct-1

2

Feb-1

3

Jun-

13

Oct-1

3

Feb-1

4

Jun-

14

Oct-1

4

Feb-1

50

100,000

200,000

300,000

400,000

500,000

600,000

700,000Apr 2015 YTY: +15,900 jobs, +2.6%



L.A. County Construction EmploymentJa

n-0

8

Jul-

08

Jan

-09

Jul-

09

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

Jan

-15

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000Apr 2015 YTY: +7,800 jobs, 6.6%


Residential Building Permits Issued in Los Angeles County

Source: CIRB, California Home Building Foundation, forecast by LAEDCKyser Center for Economic Research

'04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15f 16f0

5

10

15

20

25

30

11.8 11.9 10.17.5

3.4 2.1 2.4 2.4 2.8 3.6 4.3 4.7 5.6

15.2 13.7 16.3

12.9

10.3

3.5 5.08.0 8.0

12.614.6 16.0

18.7

Multi-FamilySingle-Family

Permits issued, thousands


Home Sales & Median PricesLos Angeles County

Jan-06Feb-06Mar-06Apr-06May-06Jun-06Jul-06Aug-06Sep-06Oct-06Nov-06Dec-06Jan-07Feb-07Mar-07Apr-07May-07Jun-07Jul-07Aug-07Sep-07Oct-07Nov-07Dec-07Jan-08Feb-08Mar-08Apr-08May-08Jun-08Jul-08Aug-08Sep-08Oct-08Nov-08Dec-08Jan-09Feb-09Mar-09Apr-09May-09Jun-09Jul-09Aug-09Sep-09Oct-09Nov-09Dec-09Jan-10Feb-10Mar-10Apr-10May-10Jun-10Jul-10Aug-10Sep-10Oct-10Nov-10Dec-10Jan-11Feb-11Mar-11Apr-11May-11Jun-11Jul-11Aug-11Sep-11Oct-11Nov-11Dec-11Jan-12Feb-12Mar-12Apr-12May-12Jun-12Jul-12Aug-12Sep-12Oct-12Nov-12Dec-12Jan-13Feb-13Mar-13Apr-13May-13Jun-13Jul-13Aug-13Sep-13Oct-13Nov-13Dec-13Jan-14Feb-14Mar-14Apr-14May-14Jun-14Jul-14Aug-14Sep-14Oct-14Nov-14Dec-14Jan-15Feb-15Mar-15Apr-150

2,000

4,000

6,000

8,000

10,000

12,000

$0

$100

$200

$300

$400

$500

$600

Home SalesMedian Home Price

Apr. 2015: $485,000, +10.0% YTY, Sales: +6.0% YTY

New and existing, single-family homes and condos

Sales $ Thousands

Source: CA Real Estate Research Council; DataQuick

Source: US Census, C.A.R.Kyser Center for Economic Research

Homeownership Fundamentals, 2013

State US California LA CountyCurrent Median Household Income $51,939 $57,528 $57,480

Median Home Price $197,400 $407,150 $405,630

Median Home Price to Household Income 3.8 7.1 7.1

Housing Affordability Index – Q1-2015 61 34 31

Homeownership Rate 64.9% 55.3% 46.9%


Apartment Rents – Southern California0

5Q

1

05

Q3

06

Q1

06

Q3

07

Q1

07

Q3

08

Q1

08

Q3

09

Q1

09

Q3

10

Q1

10

Q3

11

Q1

11

Q3

12

Q1

12

Q3

13

Q1

13

Q3

14

Q1

14

Q3

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

Los Angeles Orange RiversideSan Bernardino Ventura

Source: CA Real Estate Research Council

1q

06

3q

06

1q

07

3q

07

1q

08

3q

08

1q

09

3q

09

1q

10

3q

10

1q

11

3q

11

1q

12

3q

12

1q

13

3q

13

1q

14

3q

14

0.0

4.0

8.0

12.0

Los Angeles Orange Riverside San Bernardino

Source: CA Real Estate Research CouncilKyser Center for Economic Research

Apartment Vacancy Rates – Southern California

Percent vacancy, quarterly averages

Source: US CensusKyser Center for Economic Research

State U.S. California L.A. County

Real Median Household Income $52,250 $60,190 $54,529

Income Distribution (Households):

< $10,000 7.6% 6.2% 6.9%

$10,000 to $24,999 16.2% 15.0% 17.1%

$25,000 to $34,999 10.3% 9.1% 9.7%

$35,000 to $49,999 13.6% 12.3% 12.4%

$50,000 to $74,999 17.9% 16.8% 16.7%

$75,000 to $99,999 11.9% 11.9% 11.6%

$100,000 to $149,999 12.7% 14.5% 13.2%

>$150,000 9.9% 14.3% 12.4%

Below Poverty Level 15.4% 15.9% 17.8%

Income Fundamentals, 2013


Income Range U.S.L.A.

County

<$24,999 23.8% 24.0%

$25,000 to $99,999 53.6% 50.4%

>$100,000 22.6% 25.6%

Total 100.0% 100.0%

More High & Low Income HHs in L.A. County


Educational Attainment, 2013

U.S. California L.A. County

Educational Attainment (Population > 24 yrs)

< 9th grade 5.8% 10.1% 13.6%

9th-12th grade 7.6% 8.2% 9.5%

High school grad 27.8% 20.8% 20.4%

Some college 21.1% 22.0% 19.4%

Associate’s degree 8.1% 7.9% 7.0%

B.A. 18.4% 19.5% 19.7%

Graduate degree 11.2% 11.5% 10.4%


Conclusion



2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD

2.0

2.5

3.0

3.5

4.0

4.54.23 4.19

3.95 3.89 3.914.01

4.134.23 4.29





1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2.0

2.5

3.0

3.5

4.0

4.5

4.18

3.74

4.19

3.89

4.23



12 Years to Recover440K Lost


Conclusion

• Economy Growing This Year & Next

• Real Household Income Falling Since 1999

• Higher % of Low Income HHs in LA County

• Educational Attainment Lagging in LA County

• Ed Attainment ->Incomes->Escape Poverty

The Economy and Poverty in Los Angeles County

Thank You!

Robert A. Kleinhenz, Ph.D. Chief Economist, Kyser Center for Economic Research, LAEDC The Economy and Poverty in Los Angeles County MENDing Poverty Conference.

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