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South Carolina Economic Update
Dr. Don SchunkResearch EconomistBB&T Center for Economic & Community DevelopmentCoastal Carolina University
October 5, 2009
1400
1500
1600
1700
1800
1900
2000
90 92 94 96 98 00 02 04 06 08
job
s, 1
00
0s
SC Total EmploymentJan. 1990 – August 2009
June 2000:1,883,300 jobs
August 2009:1,848,600 jobs
105000
110000
115000
120000
125000
130000
135000
140000
90 92 94 96 98 00 02 04 06 08
job
s, 1
00
0s
US Total EmploymentJan. 1990 – September 2009
Feb. 2001:132.5 million jobs
Sept. 2009:130.9 million jobs
60
70
80
90
100
110
120
130
90 92 94 96 98 00 02 04 06 08
job
s, 1
00
0s
Myrtle Beach MSA Total EmploymentJan. 1990 – August 2009
260
280
300
320
340
360
380
90 92 94 96 98 00 02 04 06 08
job
s, 1
00
0s
Columbia MSA Total EmploymentJan. 1990 – August 2009
220
240
260
280
300
320
340
90 92 94 96 98 00 02 04 06 08
job
s, 1
00
0s
Greenville MSA Total EmploymentJan. 1990 – August 2009
108
112
116
120
124
128
132
90 92 94 96 98 00 02 04 06 08
job
s, 1
00
0s
Spartanburg MSA Total EmploymentJan. 1990 – August 2009
-8
-4
0
4
8
12
16
20
24
40 45 50 55 60 65 70 75 80 85 90 95 00 05
an
nu
al %
ch
an
ge
SC Total Employment: Annual Job GrowthJan 1940 – August 2009
August 2009:-4.1%
5
6
7
8
9
10
11
12
13
2008M01 2008M07 2009M01 2009M07
pe
rce
nt
2
4
6
8
10
12
14
1980 1985 1990 1995 2000 2005
pe
rce
nt
SC Unemployment RateJan. 1976 – August 2009
0
50000
100000
150000
200000
250000
300000
88 90 92 94 96 98 00 02 04 06 08
Unemployed (number)Continued Claims
SC Unemployed & UI ClaimsJan. 1987 – August 2009
1840
1860
1880
1900
1920
1940
1960
1980
2009M01 2009M04 2009M07 2009M10
SC Employment (HH survey)SC Employment (business survey)
10
00
s
SC EmploymentJan. 2009 – August 2009
10
20
30
40
50
60
1970 1975 1980 1985 1990 1995 2000 2005
SC Exhaustion RateUS Exhaustion Rate
pe
rce
nt
UI Exhaustion RateJune 1972 – August 2009
People are exhausting UI benefits at a record rate… this is why continued claims, unemployed, and unemployment rate have been falling.
2170000
2175000
2180000
2185000
2190000
2195000
2200000
2205000
2009M01 2009M04 2009M07 2009M10
SC Labor ForceJan. 2009 – August 2009
SC’s labor force fell by 28,000 between May and August 2009
10.0
10.5
11.0
11.5
12.0
12.5
13.0
2009M01 2009M04 2009M07 2009M10
Recalculated Unemployment RateOfficial Unemployment Rate
SC Unemployment Rate revisitedJan. 2009 – August 2009
12.6%
11.5%
Given the actual trends in employment, what if the state’s labor force had remained unchanged since May?
15000
20000
25000
30000
35000
40000
45000
50000
55000
90 92 94 96 98 00 02 04 06 08
mo
nth
ly in
itia
l cla
ims
SC Initial Claims for UIJan. 2009 – August 2009
10000
20000
30000
40000
50000
60000
2
4
6
8
10
12
14
88 90 92 94 96 98 00 02 04 06 08
Initial ClaimsUnemployment Rate
mo
nth
ly c
laim
s
pe
rcent
SC Initial Claims & UnemploymentJan. 2009 – August 2009
-8
-6
-4
-2
0
2
4
6
8
90 92 94 96 98 00 02 04 06 08 10
an
nu
aliz
ed
% c
ha
ng
e
U.S. Real GDP Growth1990Q1 – 2010Q4
2000 3.7%2001 0.8%2002 1.6%2003 2.5%2004 3.6%2005 2.9%2006 2.8%2007 2.0%2008 1.1%2009 -2.6%2010 1.5%
160
200
240
280
320
360
400
92 94 96 98 00 02 04 06 08
$b
illio
ns,
mo
nth
lyJob losses, flat incomes, household rebalancing
translates into weak consumer spending
Aug. 2008 to Aug. 2009:
US Retail Sales down 5.6%
2000
4000
6000
8000
10000
12000
14000
90 92 94 96 98 00 02 04 06 08
$m
illio
ns,
mo
nth
lyS.C. Retail SalesJan. 1990 – July 2009
May-July 2008 to May-July 2009:
SC Retail Sales down 12.5%
A Few Key Sectors in South Carolina• June 2008 – June 2009: SC net loss of 92,700 jobs
– Manufacturing: -29,800– Leisure & Hospitality: -16,500– Retail Trade: -12,100– Construction: -10,900 (-24,400 since June 2007)
• These sectors ~ 40% of all jobs• These + Govt. ~ 60% of all jobs• From 2002-2007: SC Employment increased by roughly 155
thousand– Over 50% of the job growth came from construction, leisure &
hospitality, retail trade, and local government
-10
-5
0
5
10
15
20
25
40 45 50 55 60 65 70 75 80 85 90 95 00 05 10
an
nu
al %
ch
an
ge
SC Total Employment: Annual Job Growth1940Q1 – 2010Q4
2000 1.6%2001 -1.9%2002 -1.0%2003 0.2%2004 1.4%2005 1.8%2006 2.2%2007 2.0%2008 -0.9%2009 -4.3%2010 -1.7%
S.C. Total Employment Growth:Annual 1990 - 2010
-5
-4
-3
-2
-1
0
1
2
3
4
90 92 94 96 98 00 02 04 06 08 10
an
nu
al %
ch
an
ge
2000 1.6%2001 -1.9%2002 -1.0%2003 0.2%2004 1.4%2005 1.8%2006 2.2%2007 2.0%2008 -0.9%2009 -4.3%2010 -1.7%
2
4
6
8
10
12
14
16
1980 1985 1990 1995 2000 2005 2010
pe
rce
nt
S.C. Unemployment Rate1976Q1 – 2010Q4
SC’s unemployment rate:
Expected to approach 15%, perhaps during Spring 2010
The roles of:-ongoing job losses-sluggish job growth-labor force growth
What about broader measures of unemployment?
160
200
240
280
320
360
400
440
1980 1985 1990 1995 2000 2005 2010
job
s, 1
00
0s
SC Manufacturing Employment1970Q1 – 2010Q4
140,000 net job loss from2000 - 2010
80000
90000
100000
110000
120000
130000
1994 1996 1998 2000 2002 2004 2006 2008
Gains Losses
qu
art
erl
y jo
bs
(4-q
tr m
ovi
ng
ave
rag
e)
SC Employment Dynamics1992Q3 – 2008Q3
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
1300
1400
1500
1600
1700
1800
1900
2000
2100
2200
1994 1996 1998 2000 2002 2004 2006 2008
Gains - ExpansionsGains - OpeningsLosses - ClosingsLosses - ContractingTotal Employment
qu
art
erl
y jo
bs
(4-q
tr m
ovi
ng
ave
rag
e)
tota
l job
s, 10
00
s
SC Employment Dynamics1992Q3 – 2008Q3
10000
20000
30000
40000
50000
60000
70000
80000
90000
100000
1300
1400
1500
1600
1700
1800
1900
2000
2100
2200
1994 1996 1998 2000 2002 2004 2006 2008
Gains - ExpansionsGains - OpeningsLosses - ClosingsLosses - ContractingTotal Employment
qu
art
erl
y jo
bs
(4-q
tr m
ovi
ng
ave
rag
e)
tota
l job
s, 10
00
s
SC Employment Dynamics1992Q3 – 2008Q3
How do we add jobs?
-Attract New Business
-Encourage Expansion-Prevent Closings-Prevent Contractions