"The 3 Rs: Recession, Resources + Recovery" - speech by reknown economist and Dean of the Maxine Goodman Levine College of Urban Affairs at Cleveland State University...Dr. Ned Hill. Given at the 2009 Annual Meeting of the Ohio Economic Development Association (OEDA).

1. The 3 Rs: Recession, Resources, and Recovery Edward (Ned) Hill Dean, Levin College of Urban Affairs Cleveland State University Ohio Economic Development Association October 14, 2009

2. Quarterly Real GDP and 12-month percent change in Quarterly Real GDP from 1979(1) to 2009(2) Edward (Ned) Hill Source: US Bureau of Economic Analysis, National Income and Product Accounts, Retrieved Oct 14, 2009 from FRED, St Louis Federal Reserve Bank. Released Sept 30,2009. Recessions are shaded. Real GDP in billions of $2000 12-month Percent Change Real GDP in Billions of $2005 12-month percent change in Real GDP General performance Quarterly data, last data point second quarter of 2009

3. Number of people employed in the economy and the Unemployment Rate, monthly 1979 to 2009 Edward (Ned) Hill Source: US Bureau of Labor Statistics, Current Population Survey, retrieved from FRED, St Louis Federal Reserve Bank, Oct 14, 2009. Recessions are shaded Number of Jobs Unemployment Rate General Performance Number employed (000) Unemployment rate (%) Since the recession started: 7.2 million jobs lost (-5.2% of total) Unemployment rate: 4.9% to 9.8%

4. Recession over? 6 month percent change in GDP Forecast data from July 2009 on Edward (Ned) Hill Source: HIS Global Insight and USA Today retrieved September 25,2009 Forecast data Forecast 2.8% 1/07 1/08 1/09 US GDP

5. forecast of annual percent change in GDP; improving over time Edward (Ned) Hill Source: The Economist , electronic edition, retrieved October 12, 2009 from http://www.economist.com/markets/indicators/displaystory.cfm?story_id=14365843 Global GDP

6. Edward (Ned) Hill Source: Wall Street Journal Sept 25, 2009 Global GDP

7. The 4-week moving average of new unemployment insurance claims usually trends down at the end of recessions—this is encouraging Edward (Ned) Hill 4 week average of number of claims Source: Bureau of Labor Statistics, Unemployment Insurance Weekly Claims Retrieved Oct 12, 2009 from FRED, St Louis Federal Reserve Bank . Weekly data Jan 1968 to Oct 3, 2009 2001 1990-91 2007-09 1980-82 1973-75 1969-70 Labor market

8. A more localized look at the 4 week moving average of new unemployment insurance claims Edward (Ned) Hill Peak: April 4, 2009 Labor market Source: Bureau of Labor Statistics, Unemployment Insurance Weekly Claims Retrieved Oct 12, 2009 from FRED, St Louis Federal Reserve Bank . Weekly data, January 2005 to October 3, 2009 November 2007 Oct 3, 2009

10. Consumer confidence: Weak recovery begins Dropping since January 2004; Increase March to August Edward (Ned) Hill Source: St. Louis Federal Reserve Bank, FRED, from University of Michigan, http://research.stlouisfed.org/fred2/series/UMCSENT/downloaddata?cid=98retrieved Oct 12, 2009 1966(1)=100 Monthly data 01/90 to 08/09 Recessions are shaded Confidence: C

11. CFO economic confidence Feeling better in May. Time for the next quarter’s data Edward (Ned) Hill Source: The Economist, June 3, 2009 http://www.economist.com/markets/rankings/displaystory.cfm?story_id=13781864 The latest quarterly poll of over 1,000 CFOs, conducted in late May by Duke University in America, Tilburg University in the Netherlands and CFO, a sister publication to The Economist. Confidence: I

12. Trade weighed value of the dollar reflects its role as a reserve currency—but gravity is reasserting itself due to trade Edward (Ned) Hill Peak Feb 2002 129.5 Bottom July 2008 95.4 Feb 2009 111.8 Value of the dollar Source: St Louis Federal Reserve Bank, FRED, retrieved Oct 3, 2009 Credit markets freeze Sept 15 2007 China floats Yuan

13. Dollar increases as a reserve currency against major industrial currencies; Gains moderate in 2009 Edward (Ned) Hill $ increases in value $ decreases in value Monthly data Jan 1999 to June 2009; Indexed to relative values in January 199 when Euro was floated Source: St Louis Federal Reserve Bank, FRED, retrieved Oct 14, 2009 Value of the dollar China floats Yuan Credit markets freeze € :$ CA$:US$ £:$ ¥:$

14. Dollar in managed decline against Yuan Drops in value against currencies of industrializing nations Edward (Ned) Hill Monthly data Jan 1999 to Sept 2009; Indexed to relative values in January 1999 when Euro was floated Source: St Louis Federal Reserve Bank, FRED, retrieved Oct 14, 2009 $ increases in value $ decreases in value China floats Yuan Credit markets freeze Value of the dollar Brazil:$ India:$ Mexico:$ Korea: $ China: $

15. Auto & light truck sales walked off a cliff with a cash-for-clunkers rebound Decline starts in January 2006; accelerates September 2007; falls apart September 15, 2008; cash for clunkers worked; Annualized monthly auto and light truck sales Edward (Ned) Hill Source: St. Louis Federal Reserve Bank, FRED, from US Bureau of Economic Analysis , retrieved October 12, 2009 Aug 09 Feb 09 Aug 07 June 05 Jan 06 Autos

16. Cars and trucks will be made in the United States North America remains a big market US & Canadian production numbers drop; Mexico climbs Edward (Ned) Hill Source: International Organization of Automobile Manufactures (OICA) http://oica.net/category/production-statistics/2007-statistics/ retried July 1, 2009

17. In 2008 UAW and CAW membership produced 6.5 million vehicles in North America (52%); Nonunion assembly plants produced 5.9 million (48%) units Edward (Ned) Hill Source: International Organization of Automobile Manufactures (OICA) http://oica.net/category/production-statistics/2007-statistics/ retried July 1, 2009 It is likely that less than 50% of North American production will come from plants organized by the UAW and CAW in 2009 and going forward.

18. A tale of 4 clusters: Auto assembly in North America Old domestic heartland; New Domestic center I-70 – I-75 crosshair; Southeast Corridor Edward (Ned) Hill Source: Ohio Department of Development, Office of Strategic Research Autos

19. Ohio’s economic performance Edward (Ned) Hill Economic performance: Ohio is America’s economic battleground

20. The economic challenge for the region and Ohio was in late 1990s until the end of the 2001 recession Edward (Ned) Hill United States Ohio Cleveland-Akron CSA Economic performance: GDP growth rates trail the nation Source: Economy.com

22. Four facts explain the performance of this market area Edward (Ned) Hill Changing economic advantage Low rates of innovation & entrepreneurship Failed corporate strategies and old products Place-based legacy costs Economic performance : Four observations

27. Edward (Ned) Hill

29. What’s next Reading the dust storm on the horizon “ Hard to tell from here. Could be buzzards. Could be economic development consultants. Most likely the chase for stimulus cash” Edward (Ned) Hill