a (7) None of these ? What Californians Google index 50 facebook - - PDF document
The 2020 Economic Outlook U.S. and California January 15, 2020 Mark Schniepp Director What are Californians Concerns? (1) Economy ? (2) Global Warming ? (3) Homelessness ? (4) This years Presidential Election (5) The Stock market ? (6)
Mark Schniepp Director
January 15, 2020
What are Californian’s Concerns?
(1) Economy ? (2) Global Warming ? (3) Homelessness ? (4) This year’s Presidential Election (5) The Stock market ? (6) The next Recession ? (7) None of these ?
10 20 30 40 50 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20
What Californians Google
index
facebook weather football instagram movies
star wars impeachment
(1) What you should know
(2) Searching for Recession (3) What you should know about
California
(4) Community College Update (5) The 2020 outlook
q Unemployment rate just dipped to 3.5 % q All time record job creation continues in the U.S. q The economy has slowed however
q Uncertainty from the trade war has been a cloud over the economy
q Stock market is at all time record highs
2,700 2,800 2,900 3,000 3,100 3,200 3,300 Feb-19 Mar-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Dec-19 Jan-20
S&P 500 Index
February 2019 -- January 14, 2020 index
q Long term interest rates remain very low
q Household wealth is at all time record highs
q record high stock market q very low debt q record high home prices
q Real wages have eclipsed their previous peak q Inflation around 2 percent, or less
10 20 30
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
6.4
18.8 11.0 5.5 7.3 26.5 7.5
13.4 25.1
22.8
Annual return on the Dow Jones Industrial Avg
2007 - 2019
percent change
3 4 5 6 7 8 9 10 11 Dec-64 Oct-71 Aug-78 Jun-85 Apr-92 Feb-99 Dec-05 Oct-12 Aug-19
Unemployment Rate / US
percent December 1964 -- August 2019
December 1964 -- December 2019
2,000 3,000 4,000 5,000 6,000 7,000 8,000 Nov-04 Jul-06 Mar-08 Nov-09 Jul-11 Mar-13 Nov-14 Jul-16 Mar-18 Nov-19
Job Openings / U.S.
November 2004 -- November 2019 thousands
7 million job openings
151 327 389 425 476 428 356 338 290
200 400 600 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Jobs Created / California
2009 - 2019
thousands
3% 5% 7% 9% 11% 13% 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
Unemployment Rate / California
percent
1986 -- 2019
50 100 150 200 250
Bay Area Far North Central Coast Sacramento Valley Inland Empire Central Valley Coastal Southern California
Job Openings by California Region
thousands
November 2019
570,000
How do you handle job openings?
q we don’t have any job openings q we recruit new college graduates q we raid other companies q we use all social media to recruit
q we’re hoping the next recession
will eliminate our need to hire
Searching for the most widely anticipated recession in history
25 50 75 100 125
Oct 45 - Nov 46 Oct 49 - Jul 53 May 54 - Aug 57 Apr 58 - Apr 60 Feb 61 - Dec 69 Nov 70 - Nov 73 Mar 75 - Jan 80 Dec 82 - Jul 90 Mar 91 - Mar 01 Nov 01 - Dec 07 Jun 09 - Dec 19
37 45 39 24 105 36 58 91 120 73
126
Economic Expansions in Months / U.S.
1945 to Now
months
50 56 62 68 74 80 86 92 98 104 Aug-06 Apr-09 Dec-11 Aug-14 Apr-17 Dec-19
Consumer Sentiment / University of Michigan
August 2006 -- December 2019 index 1985=100
What would Consumers Worry About ?
q . . . their jobs q today and in 6 months q . . . their wealth q the stock market q their home values q . . . about recession
20 30 40 50 60 70 80 90 Feb-19 Mar-19 Apr-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Dec-19 Jan-20
Google Search for "Recession"
February 2019 -- January 2020 index
Even Gavin Newsom talks recession (January 10, 2019 news conference)
Revenue Could Drop by Nearly $70 Billion in a Recession
California State Budget 2019-2020 / June 27, 2019
3 6 9 2009 2011 2013 2015 2017 2019 2021
General Fund Ending Fund Balance / California
FY 2008 - FY 2021 billions of dollars
Who Should Worry about Recession? q Anyone that has a job q Business owners q State, County, and City governments q Anyone with debt
q Lenders q Most everyone
95 98 101 104 107 110 113 Nov-14 Nov-15 Nov-16 Nov-17 Nov-18 Nov-19
Index of Leading Indicators / U.S.
index 2010 = 100 November 2014 -- November 2019
10 20 30 40 50 60 May-08 Apr-10 Mar-12 Feb-14 Jan-16 Dec-17 Nov-19
Probability of Recession / U.S.
May 2008 -- November 2019
% likelihood
the probability that the U.S. economy will be in recession in 6 months
24,500 25,000 25,500 26,000 26,500 27,000 27,500 28,000 28,500 29,000 7/17/19 8/21/19 9/26/19 10/31/19 12/6/19 1/14/20
Dow Jones Industrial Average
the last 125 days . . . . . to January 14, 2019
index
What you should know about the
California economy right now
q Surprising sustained strength in job creation q New development remains especially strong
Orange County, Sacramento and Central Valleys
q Technology remains the principal engine
420 460 500 540 580 620 660 700 740 780 2003 2005 2007 2009 2011 2013 2015 2017 2019
Employment in Technology Sectors / California
thousands
2003 -- 2019
These jobs cannot be filled fast enough
Film and video recording Software development Data processing and web hosting Computer systems design Scientific & technical consulting
10 20 30 40 50 60 1998 2001 2004 2007 2010 2013 2016 2019
New Apartment Unit Production / California
1998 -- 2019 thousands of units permitted 2 4 6 8 10 12 14 16 18 20 1979 1983 1987 1991 1995 1999 2003 2007 2011 2015 2019
Investment in New Commercial & Industrial Structures / California
1979 -- 2019
billions of dollars
Office Vacancy rate low in LA and SF Industrial vacancy at record lows Even retail store vacancy is still low
0.0 0.4 0.8 1.2 1.6 2.0 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
Investment in New Hotels / California
1992 -- 2019
billions of dollars
Proposition 51: $9 billion for schools SB1: $5.2 billion per year for transportation infrastructure
2.5 3.5 4.5 5.5 6.5 7.5 8.5 9.5 1990 1995 2000 2005 2010 2015 2020 2025 2030
Population Age 65 & over / California
1990 - 2030
millions
48 percent
CA Demographics are changing
q The fastest growing age cohort is 65+ q The largest age cohort is the Millennial generation, born 1980 to 1999 and are now aged 21 to 40 q And because Millennials don’t have kids . . . . . q . . . population growth has now slowed to the lowest rate since records have been kept q Net in-migration to California has turned negative q Hispanic population now the dominant ethnicity in California
39.3 38.3 13.1 5.7 3.5
Distribution of Ethnicity / California • 2019
Hispanic White Asian Black
Student Demographics / Ethnicity
(1) Black
(2) Asian
(3) Hispanic
(4) White
(5) Multi-Ethnicity
(6) Other
2017 - 2018
50 100 150 200 250 300 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Net In-migration / California
1991 - 2019 thousands of persons 0.0 0.5 1.0 1.5 2.0 2.5 3.0 1969 1974 1979 1984 1989 1994 1999 2004 2009 2014 2019
Population Growth / California
1969 -- 2019
percent change
320 360 400 440 480 520 560 600 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
Births / California
1977 - 2019
thousands
1.3 1.4 1.5 1.6 1.7 1.8 1.9 250 300 350 400 450 500 550 600 650 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
CC Enrollment and Organic 18 year olds California
1992 - 2018 thousands
millions of students
Organic 18 year olds
1.3 1.4 1.5 1.6 1.7 1.8 1.9 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
Community College Enrollment / California
1992 - 2018
millions
25 50 75 100 125 150 175 200 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
Distance Education / FTES California Community Colleges
1997 -- 2019
thousands
0.85 0.90 0.95 1.00 1.05 1.10 1.15 1.20 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019
On-Campus Enrollment / FTES California Community Colleges
1997 -- 2019
millions of students
Factors Affecting CC Enrollment
student enrollment
the economy created more jobs and the unemployment rate fell
10 20 30 40 50 1987 1991 1995 1999 2003 2007 2011 2015 2019
Fees per Unit California Community Colleges
Fall 1987 - Fall 2019
dollars per unit
AB 19
Will 2 or 4 year colleges thrive
q Demographic changes are raising challenges
for higher education in the U.S.
q The nation’s fertility rate plunged by more
than 12 percent since 2007
q No recovery in fertility rates has since occurred q Therefore, beginning in 2026, the number of
native-born kids reaching college age will begin a rapid decline
300 340 380 420 460 500 540 580 620 1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030
18 Year Olds / California
1990 - 2030 thousands
Births 18 years ago
18 year olds
forecast
50,000 100,000 150,000 2002 2005 2008 2011 2014 2017 2020 2023 2026 2029
Net In-migration / California
2002- 2030
in-migrants minus out- migrants
5.0 5.5 6.0 6.5 7.0 1990 1995 2000 2005 2010 2015 2020 2025 2030
Population Ages 5 to 17 / California
1990 - 2030 millions
q Expect modest increase in enrollment for
2 and 4 year colleges over next few years . . .
q Stability through 2023, then the models
show a rise in 2024 and 2025 before “the weight of the current birth dearth reduces enrollment by more than 15 percent (latter half of 2020s)
q So after 60 years of steady growth in demand,
the future suggests challenges for many 2 and 4 year higher learning institutions
4,000 6,000 8,000 10,000 12,000
Gen Z Millennials Gen X Baby Boomers
Population by Generation / California
2020
thousands
Generation Z Millennials Generation X Baby Boomers
425 450 475 500 525 550 575 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030
Births / California
2000 - 2030
thousands of live births
2.2 1.8 2.5 2.9 1.6 2.4
2.9 2.3
1.8 1.7
1.0 1.5 2.0 2.5 3.0 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Real Gross Domestic Product Growth / U.S.
2012 - 2021
percent change 3 – 2 –2
2020 Economic Summary
vulnerable recession range
1.8 percent today for the 10 year Treasury
q No more Tom Brady in the Super Bowl q 5G (lightening fast, much lower latency)
q Autonomous vehicles will assuredly be here
q Streaming content wars
Netflix, Disney, Amazon, Hulu, Sling
q Alexa will control all systems inside a home
q The economy (and the world) will not collapse in 2030 from climate change
another year of
growth and prosperity