1. Economic Update Economic Development Council of Seattle-King County Board Meeting February 27, 2014 Spencer Cohen Senior Economic Analyst

2. As of December 2013, non-farm jobs in the Seattle MSA grew by 44,800 jobs over the past 12 months –A 3.1% year-over-year increase The not-seasonally adjusted unemployment rate in King County was 4.7% in December 2013, down from 6.0% in December of 2012. Seattle area inflation was 1.3% (year-over-year) for December 2013. –Up from 0.6% in October 2013. 2 EXECUTIVE SUMMARY

3. In January 2014, driver’s license transfers to King County grew 18.3% year-over-year, from 3,858 to 4,565, based on a three month moving average. King County Taxable Retail Sales were $12.1 Billion in Q3 2013, 7.4% greater than Q3 2012. Home price index is remained high, 30 points above a recent low in February 2012. 3 EXECUTIVE SUMMARY (continued)

4. Three Questions, Six Measures Is the economy growing and if so, how rapidly? –Two measures: Total jobs and new residents How is the cost of living changing? –Key measure: Wages and Inflation How are we sustaining public sector services and fiscal health? –Two key measures: home prices and taxable retail sales 4 CONTENTS

5. EMPLOYMENT TRENDS Cumulative change in Seattle MSA and Washington State Employment, 2001 - 2013 Washington State employment has grown by 7.8% since January 2001. Seattle employment has risen by 6.6% in the same period. Seasonally adjusted, based on 3 month moving average Sources: Washington State Employment Security Department; Community Attributes Inc. 5 Percent Change Seattle Washington

6. EMPLOYMENT TRENDS Percent Change Quarterly Seattle MSA and Washington State Employment, 2008 - 2013 Seattle gained 44,800 in the last 12 months. Seasonally adjusted, based on 3 month average Sources: Washington State Employment Security Department; Community Attributes Inc. 6 % change by quarter, year over year Washington Seattle

7. EMPLOYMENT TRENDS Seattle MSA Employment Monthly change in jobs by sector (thousands), seasonally adjusted, based on 3 month moving average Sources: Washington State Employment Security Department; Community Attributes Inc. “Professional and Business Services” added over 7,400 jobs in 2013. Retail added 8,500 jobs. 7 Government and Education Other Services Finance, Insurance and Real Estate (FIRE) Manufacturing Construction and Resources Retail WTU Information Change in jobs, thousands, month-over-month

8. WHAT’S DRIVING GROWTH? Change in Employment, Seattle MSA, Top 5 Sectors, December 2012 to December 2013 Retail added 9,400 jobs between December 2012 and December 2013, equal to 21% of job gains by subsector. Year-over-year change in 3 month moving average, percentage change in parentheses Sources: Washington State Employment Security Department; Community Attributes Inc. 8

9. MIGRATION King County License Transfers Total number of transfers (LHS) and year-over-year change (RHS), based on 3 month moving average Sources: Washington State Department of Licensing; Community Attributes Inc. In the last 12 months, 11,300 Californians changed their residence to King County, followed by 3,600 Texans. More than 1,000 people from India changed their license. 9 Total change year over year % change year over year

10. COST OF LIVING Seattle Urban Consumer Price Index Year-over-year change, by month Sources: U.S. Bureau of Labor Statistics; Community Attributes Inc. CPI increased slightly in the December, up 1.3% compared to 0.6% in October. 10 % change year over year 3.8% 1.3% -0.5%

11. HOUSING MARKET S&P/Case-Shiller Home Price Indices and Vacancy Rates Case-Shiller index for Seattle MSA is 30 points above recent low in 2012. King County apartment vacancy up 0.5% from April 2013. Seattle-Tacoma-Bellevue MSA, 3mma for price index, 2009-2013 (Feb) Sources: S&P Case-Shiller Indices Dupre+Scott; Community Attributes Inc. 11 Vacancy Rate

12. RETAIL ACTIVITIES Total Taxable Retail Sales, King County Year-over-year change, by quarter Sources: Washington State Department of Revenue; Community Attributes Inc. Total taxable retail sales peaked at $12.1 billion in the third quarter 2013. Per capita taxable retail sales grew 7.4% y/y in Q3 2013. 12

13. 13 Thank you! Spencer Cohen Senior Economic Analyst Community Attributes Inc. spencer.cohen@communityattributes.com

14. EMPLOYMENT TRENDS Unemployment and Labor Force, King County Year-over-year change, December 2008 – December 2013 Early in the recession, labor force decelerated faster than unemployment rate. Not seasonally adjusted, based on 3 month moving average Sources: U.S. Bureau of Labor Statistics; Community Attributes Inc. 14 Percent Change

15. EMPLOYMENT TRENDS Initial Unemployment Claims, King County Not seasonally adjusted, based on 3 month moving average Sources: Washington State Employment Security Department; Community Attributes Inc. 15 Number of Claims Construction