From 2008 peak to now: a dozen ways the District’s economy has changed

The official start of the Great Recession was December 2007; but the District’s employment continued to grow until September 2008. The years that followed included several shocks to DC’s economy, most notably the effects of the recession and federal cutbacks (shutdown and sequester). Since then, our demographics and workforce changed as we chronicled in many places in this blog.

Here are 12 notable economic trends that have shaped the District the September 2008 employment peak to January 2015 (or as close to the January 2015 date as data permit).

  1. More people, more households: population grew by 81,200 (14 percent), households by 29,000 (11 percent).
    image002
  2. More employed residents working in D.C. or elsewhere. Resident employment, including self-employed and residents who work in the suburbs—increased at a pace twice that of wage and salary jobs located in DC (15 percent v. 7 percent). We added 50,300 wage and salaried jobs and 45,500 resident employees.image004
  3. More of the earnings stay in the city. Total wages and salaries received by DC resident grew faster than wages earned in DC. (33% v 19%)—not surprising, given the strong growth in resident employment. Residents seem to be getting higher paid jobs, including ones formerly held by suburbanites who have retired or moved on.image006
  4. Not all District residents benefit from the boom. Total number of unemployed residents rose 36 percent (7,800 more)—but unemployment compensation payments received by DC residents decreased 31 percent. (This data do not explain how these two fit together, but there is a story here.)image008
  5. Personal Income of all D.C. residents combined grew 25 percent. Adjusted for inflation, this is a 14 percent growth. Incomes of households, again adjusted for inflation, grew 2.3 percent, and per capita real income did not grow at all.image010
  6. Almost all job growth was in the private sector. Federal civilian employment first grew with the stimulus, and then declined, netting additional 3,300 jobs for the period. The decline in state and local jobs (3,067) offset almost all of the federal gain. image012
  7. Employment became more diversified. The federal government and professional services together accounted for 42 percent of all jobs in September 2008. Both sectors continued to add jobs, but this amounted to only 18 percent of DC’s net job growth. By contrast, the four fastest growing industries—retail, education, health, and hospitality—accounted for 73 percent of the growth.image014
  8. The fastest growing sectors are not the highest paying. Wages and salaries in the four fast growing industries noted above accounted for only 23 percent of all DC wage growth. Despite their 18 percent share of DC’s job growth, federal government, and professional services accounted for almost half of the increase in wage and salary earnings. This is not too far from their 54 percent share of the 2008.3 total.image016
  9. DC added many more new households than new housing units. The increase in households (29,000) appears to be much greater than the increase in housing units whether one measures it by new housing permits issued by the DC government (12,483) or by the combined number of new condo units sold, permits for small projects of one to four units, and increased occupancy in larger market rate rental apartment buildings (14,372). Population increase therefore seems likely to have been accompanied by significant adjustment to and renovation of the DC housing stock beyond what is captured in the housing permit data. (The Census Bureau defines a household as an occupied housing unit.)
    image017
  10. Housing prices increased faster than incomes. The increase in value of single-family housing units in DC as measured by the Federal Housing Finance Agency outpaced the increase in DC Personal Income (37 percent v. 25 percentimage019).
  11. Occupied commercial office space increases matched the increases in jobs in DC (8 percent v 7 percent). Vacancy rate went up a little (6.2 percent to 6.9 percent) as the total inventory rose by 8 percent. image021
  12. DC government tax collections grew at rates similar to personal income. Tax collections, measured by the 12-month moving total went up by 22 percent while personal income went up by 25 percent. The increase in collections reflect policy changes as well as changes to the economy.image023

You can find more on these trends in the District’s monthly Trend Reports.

What exactly is this data? Population data are from Moody’s Analytics. Quarterly data, seasonally adjusted. Moody’s derives quarterly population estimates from annual Census Bureau population; it also provides estimates of the number of households. Labor market data are from Bureau of Labor Statistics, Seasonally adjusted. September is the average for the quarter. All measures of employment include full time and part time. Resident employment includes persons working outside of DC and self-employed or contract workers. Personal income data are from US Bureau of Economic Analysis and ORA. ORA estimates wages of DC residents based on the assumption that benefits as a percent of wages are the same for wages earned by DC residents as for wages earned by all persons working in DC. Property income is rent, dividends and interest and does not include capital gains.

One thought on “From 2008 peak to now: a dozen ways the District’s economy has changed

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s