2019 Governmental Seminar November 14, 2019 a s s u r a n c e - - PDF document

2019 Governmental Seminar November 14, 2019 2019 Governmental Seminar November 14, 2019 a s s u r a n c e - c o n s u l t i n g - t a x - t e c h n o l o g y - p n c p a . c o m Postlethwaite & Netterville, A Professional Accounting Corporation Welcome! www.pncpa.com/events www.pncpa.com/events Postlethwaite & Netterville, APAC 1

2019 Governmental Seminar November 14, 2019 Agenda 3 State Economic & Revenue Outlook Greg Albrecht Chief Economist Legislative Fiscal Office 2019 Governmental Seminar November 14, 2019 4 Postlethwaite & Netterville, APAC 2

2019 Governmental Seminar November 14, 2019 State Employment Levels: Better than Aug’16 trough, but just barely 2,300.0 LA AGGREGATE EMPLOYMENT CONCEPTS: LEVELS 2,275.0 Labor Force and Employment ( Establishment & Household) 2,250.0 Data through Sep( p) '19 2,225.0 Monthly Observations, Seasonally Adjusted ( sa) 2,200.0 From Jan'08 National Recession Start 2,175.0 2,150.0 Civilian Labor Force: 2,125.0 Household Survey 2,100.0 2,075.0 2,050.0 2,025.0 2,000.0 1,975.0 Employm ent: Household 1,950.0 Survey 1,925.0 Payroll Total Emp: LA Sep'19 1,900.0 LA Expansion Peak Establishment -Based 1,875.0 2.003 m ( + 38k ) Dec'14, 2.007 m ( + 131k) 1,850.0 ~ 0.6% Ann Gr ~ 1.75% Ann Gr 1,825.0 1,800.0 LA Recession Trough 1,775.0 LA Recession Trough LA Sep'19 Aug'16, 1.965 m ( -42k) 1,750.0 Feb'10, 1.876 m ( -68k) 1.666 m ( + 29k ) 1,725.0 ~ 0.6% Ann Gr 1,700.0 1,675.0 1,650.0 1,625.0 1,600.0 1,575.0 Payroll Private Em p: Establishm ent - 1,550.0 LA Expansion Peak Based 1,525.0 Dec'14, 1.677 m ( + 17 1k) 1,500.0 ~ 2.5% Ann Gr 1,475.0 1,450.0 LA Recession Trough 1,425.0 Aug'16, 1.637 m ( -40k) 1,400.0 1,375.0 LA Recession Trough 1,350.0 Feb'10, 1.506 m ( -70k) 1,325.0 1,300.0 1,275.0 1,250.0 1,225.0 1,200.0 Jan‐08 A pr‐08 Jul‐08 O ct‐08 Jan‐09 A pr‐09 Jul‐09 O ct‐09 Jan‐10 A pr‐10 Jul‐10 O ct‐10 Jan‐11 A pr‐11 Jul‐11 O ct‐11 Jan‐12 A pr‐12 Jul‐12 O ct‐12 Jan‐13 A pr‐13 Jul‐13 O ct‐13 Jan‐14 A pr‐14 Jul‐14 O ct‐14 Jan‐15 A pr‐15 Jul‐15 O ct‐15 Jan‐16 A pr‐16 Jul‐16 O ct‐16 Jan‐17 A pr‐17 Jul‐17 O ct‐17 Jan‐18 A pr‐18 Jul‐18 O ct‐18 Jan‐19 A pr‐19 Jul‐19 U.S. Recession LA_EstEmp_sa LA_CLF_sa LA_HHEmp_sa LA_Priv_sa Source: U.S. Dept. of Labor, LA Legislative Fiscal Office 5 State Employment Growth: Take out Construction, and growth not as weak (black bars) Establishment (payroll) Employment: Yr‐over‐Yr % Growth Total (blue), Private (red), Government (green) monthly observations, seasonally adjusted Sept(p)'19 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Sep‐11 Jun‐12 Sep‐12 Jun‐13 Sep‐13 Jun‐14 Sep‐14 Jun‐15 Sep‐15 Jun‐16 Sep‐16 Jun‐17 Sep‐17 Jun‐18 Sep‐18 Jun‐19 Sep‐19 Dec‐11 Mar‐12 Dec‐12 Mar‐13 Dec‐13 Mar‐14 Dec‐14 Mar‐15 Dec‐15 Mar‐16 Dec‐16 Mar‐17 Dec‐17 Mar‐18 Dec‐18 Mar‐19 ‐0.50% ‐1.00% ‐1.50% ‐2.00% ‐2.50% ‐3.00% ‐3.50% ‐4.00% LA_EstEmp_sa LA_Priv_sa LA_Gov_sa LA_Emp‐Cons Source: U.S. Dept. of Labor, LA Legislative Fiscal Office 6 Postlethwaite & Netterville, APAC 3

2019 Governmental Seminar November 14, 2019 State Unemployment Rate: Near historical low, but back to historical position > U.S. & South Unemployment Rates: LA, South, and U.S. 13.0 12.8 12.5 Monthly, Seasonally Adjusted (sa) 12.3 Data through Sep(p) 2019 12.0 11.8 11.5 11.3 11.0 10.8 10.5 10.3 10.0 9.8 9.5 9.3 9.0 8.8 8.5 8.3 8.0 7.8 7.5 7.3 7.0 6.8 6.5 6.3 6.0 5.8 5.5 5.3 5.0 4.8 4.5 4.3 4.0 3.8 3.5 LA 4.3% 3.3 SO 3.6% 3.0 US 3.5% 2.8 2.5 2.3 2.0 Aug‐76 Mar‐77 May‐78 Jul‐79 Feb‐80 Sep‐80 Apr‐81 Jun‐82 Aug‐83 Mar‐84 May‐85 Jul‐86 Feb‐87 Sep‐87 Apr‐88 Jun‐89 Aug‐90 Mar‐91 May‐92 Jul‐93 Feb‐94 Sep‐94 Apr‐95 Jun‐96 Aug‐97 Mar‐98 May‐99 Jul‐00 Feb‐01 Sep‐01 Apr‐02 Jun‐03 Aug‐04 Mar‐05 May‐06 Jul‐07 Feb‐08 Sep‐08 Apr‐09 Jun‐10 Aug‐11 Mar‐12 May‐13 Jul‐14 Feb‐15 Sep‐15 Apr‐16 Jun‐17 Aug‐18 Mar‐19 Jan‐76 Oct‐77 Dec‐78 Nov‐81 Jan‐83 Oct‐84 Dec‐85 Nov‐88 Jan‐90 Oct‐91 Dec‐92 Nov‐95 Jan‐97 Oct‐98 Dec‐99 Nov‐02 Jan‐04 Oct‐05 Dec‐06 Nov‐09 Jan‐11 Oct‐12 Dec‐13 Nov‐16 Jan‐18 U.S. Recession US_UnRate_sa LA_UnRate_sa South_Un_sa Source: U. S. Dept. of Labor, LA Legislative Fiscal Office 7 Relative Employment Performance: La lagging from beginning of national recovery but, at first, that was a government downsizing policy decision. Then LA suffers state oil recession 2015‐2016. Climb out from that has been very slow. Louisiana Relative Total Payroll Employment Performance Feb 2010 = 100, Louisiana Employment Trough During National Recession 122.0 Last Observation: Sept 2019 LA = 106.2 120.0 U.S. = 117.0 South = 119.1 118.0 116.0 114.0 Change From Feb 2010 112.0 110.0 Then oil recession of 2015‐16 changed LA 108.0 trajectory completely 106.0 104.0 Benchmarked 102.0 Through Dec 2018 Gap due to government employment LA = 105.6 downsizing 100.0 U.S. = 115.9 South = 117.5 98.0 ‐10 May‐10 ug‐10 Nov‐10 ‐11 May‐11 ug‐11 Nov‐11 ‐12 May‐12 ug‐12 Nov‐12 ‐13 May‐13 ug‐13 Nov‐13 ‐14 May‐14 ug‐14 Nov‐14 ‐15 May‐15 ug‐15 Nov‐15 ‐16 May‐16 ug‐16 Nov‐16 ‐17 May‐17 ug‐17 Nov‐17 ‐18 May‐18 ug‐18 Nov‐18 ‐19 May‐19 ug‐19 Feb Feb Feb Feb Feb Feb Feb Feb Feb Feb A A A A A A A A A A LAEmp_index USEmp_index SouthEmp_index Source: U.S. Dept. of Labor, LA Legislative Fiscal Office 8 Postlethwaite & Netterville, APAC 4

2019 Governmental Seminar November 14, 2019 Philly Fed Coincident Indicators broader than just employment: La lagging from beginning of national recovery. Then suffers state oil recession 2015‐2016. Climb out from that very slow. {payroll employment, average manufacturing hours worked, unemployment rate, inflation‐adjusted wages & salaries} Louisiana Relative Coincident Indicator Performance Feb 2010 = 100, Louisiana National Recession Trough 145 Last Observation: Sept 2019 U.S. = 133.47 South (ex LA) = 141.11 140 LA = 110.22 135 130 125 120 115 110 105 100 Feb‐10 Apr‐10 Jun‐10 Aug‐10 Oct‐10 Dec‐10 Feb‐11 Apr‐11 Jun‐11 Aug‐11 Oct‐11 Dec‐11 Feb‐12 Apr‐12 Jun‐12 Aug‐12 Oct‐12 Dec‐12 Feb‐13 Apr‐13 Jun‐13 Aug‐13 Oct‐13 Dec‐13 Feb‐14 Apr‐14 Jun‐14 Aug‐14 Oct‐14 Dec‐14 Feb‐15 Apr‐15 Jun‐15 Aug‐15 Oct‐15 Dec‐15 Feb‐16 Apr‐16 Jun‐16 Aug‐16 Oct‐16 Dec‐16 Feb‐17 Apr‐17 Jun‐17 Aug‐17 Oct‐17 Dec‐17 Feb‐18 Apr‐18 Jun‐18 Aug‐18 Oct‐18 Dec‐18 Feb‐19 Apr‐19 Jun‐19 Aug‐19 South = U.S. Dept of Labor, Bureau of Labor Statistics Southeast Region: AL, LA US South (ex LA) FL, GA, KY, MS, NC, SC, TN, +AK, ‐LA Source: Federal Reserve Bank of Philadelphia, LA Legislative Fiscal Office 9 MSA Employment Trends: 5 MSAs pulling state up (68% of emp), 4 + Balance pulling down (32%). Shouldn’t we be doing better? Not so much pulling up, as pulling flat? 1.100 MSA Total Payroll Employment Growth, sa 1.095 Aug'16 = 1, Statewide Trough 1.090 Last Observation Sep'19 LKC 1.085 1.080 1.075 1.070 1.065 1.060 Shares as 1.055 of Dec'18 State 1.050 ALX 1.045 3.1% 1.040 BTR HAM 20.7% 1.035 HAM BTR 1.030 2.3% LAF HMA 1.025 4.3% NO 1.020 10.3% LAF 1.015 6% LKC STATE 1.010 1.005 4% MON 1.000 NO 29.4% MON 0.995 S/B 0.990 9.1% S/B 0.985 Balance 10.9% 0.980 0.975 ALX 0.970 Bal 0.965 0.960 HMA 0.955 0.950 Aug‐16 Sep‐16 Oct‐16 Nov‐16 Dec‐16 Jan‐17 Feb‐17 Mar‐17 Apr‐17 May‐17 Jun‐17 Jul‐17 Aug‐17 Sep‐17 Oct‐17 Nov‐17 Dec‐17 Jan‐18 Feb‐18 Mar‐18 Apr‐18 May‐18 Jun‐18 Jul‐18 Aug‐18 Sep‐18 Oct‐18 Nov‐18 Dec‐18 Jan‐19 Feb‐19 Mar‐19 Apr‐19 May‐19 Jun‐19 Jul‐19 Aug‐19 Sep‐19 Source: U.S. Dept. of Labor, LA Legislative Fiscal Office 10 Postlethwaite & Netterville, APAC 5