Economic Outlook March Economic Policy Division

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1 Economic Outlook March 212 Economic Policy Division

2 Real GDP Outlook Percent Change, Annual Rate

3 U.S. GDP Actual and Potential Quarterly, Q1 197 to Q4 211 Real GDP Trillion 2 Dollars Log Scale Forecast $4.2- $6.3- Actual Potential $11.- $7.7- $14.- $9.4- $ Potential GDP estimated by Congressional Budget Office

4 Personal Consumption Outlook Percent Change, Annual Rate Real Personal Consumption Expenditures Percent Change 3 1. Trillion $ Household Wealth -1. Real Disposable Income Per Capita

5 Household Balance Sheet Trillion $ Household Assets Nonfinancial Assets Financial Assets Trillion $ Household Liabilities Percent of Disposable Personal Income Consumer Debt Service

6 Net National Savings 7% 6% % 4% 3% 2% 1% % -1% -2% -3% percent of GDP Net National Savings Rate percent of GDP 9% Savings Components 6% 3% % -3% -6% -9% -12% Government Household Corporate

7 Housing Market Trends Thous. of Units, SAAR 2 Thous. of Units, SAAR 14 Home Sales Housing Starts New Home Sales (left axis) 4 Existing Home Sales (right axis) Sales Price, Thous. $ Median Home Prices Thous. of Units, SAAR 7 New Homes (left axis) Existing Homes (right axis) Housing Inventory Existing Homes New Homes

8 Housing Market Trends Dollars Median Asking Rent Housing Affordability Index Percent, SA Mortgage Delinquency Rates Conventional Subprime: Total Past Due Conventional Prime: Total Past Due Percent, SA Mortgage Foreclosure Rates All Loans Conventional Subprime

9 Percent Change, Annual Rate 4 Investment Real Private Investment in Equipment & Software Percent Change, Annual Rate Real Private Investment - Structures Billion Chained 2$, Annual Rate Real Change in Private Inventories

10 Sector Indicators SA, 2= ATA Truck Tonnage Index month moving average; thous. tons 1,4 1,2 1, 8 6 Boxboard Production thous, 6-month moving average 4 Total Rail Carloadings

11 SAAR, Bil. Chn. 2$ U.S. Trade Real Net Exports of Goods and Services Exchange Rate (Major Currencies/US$) U.S. Nominal Trade Weighted Exchange Rate

12 Real GDP Growth Percent Change, Annual Rate Canada Mexico Percent Change, Year to Year China India Japan Percent Change, Annual Rate Spain Portugal 2. Italy Ireland Greece Percent Change, Annual Rate UK -1. France -2. Germany Source: Oxford Economics

13 Inflation (Consumer Price Index) Percent Change, Year to Year Percent Change, Year to Year 2 16 China India 12 Japan Percent Change, Year to Year -2-4 Spain Portugal -6 Italy Ireland -8 Greece Percent Change, Year to Year UK France 4 Germany Source: Oxford Economics

14 Unemployment Rates Percent Canada Mexico Percent China India 2 1 Japan Spain Italy Greece Portugal Ireland PercentPercent US UK France 2 Germany Source: Oxford Economics

15 Percent Canada Mexico Interest Rates (1 Year Government Bonds) Percent China India Japan Spain Portugal 2 Italy Ireland 2 Greece Percent Percent UK France 1 Germany Source: Oxford Economics

16 Percent Change 1 Real GDP Growth of Top Trading Partners World EU Canada China Mexico Japan Germany UK S. Korea Brazil Taiwan France NLD Saudi Arabia India Ven Singapore Source: Oxford Economics, USCC Forecast

17 Billions $ 7 U.S. Bank Exposure to Europe Public Sector Banks Non-bank Private Sector Derivatives and Other Exposures 2 1 France Germany Greece Ireland Italy Portugal Spain Source: Bank for International Settlements

18 Billions $ 3, 2, European Bank Exposure to Periphery 2, 1, Greece Ireland Italy Portugal Spain 1, All European Banks Belgium France Germany Switzerland UK Source: Bank for International Settlements

19 Labor Market Million Total Nonfarm Jobs Million Household Employment SA, Thousands, 4-week Moving Average Initial Unemployment Claims Percent Unemployment Rate January: 8.3 percent

20 Labor Market Thousands Marginally Attached Discouraged Workers Thousands 1, 8, Part-time for Economic Reasons 6, 4, 2, SA, percent Civilian Participation Rate Median Weeks Unemployed, SA Duration of Unemployment

21 Labor Participation Rates (by age class, population shares) Percent to 24 years 2 to 34 years 3 to 44 years 4 to 4 years years and over 16% 16.8% 16.4% 18.1% 32.7% December 27 June 211 January 212

22 Percent Change, 3-Month Annualized Rate 1 Inflation Consumer Price Index Percent Change, 3-Month Annualized Rate Core Consumer Price Index

23 $/gallon $. $4. $3. $2. $1. Oil, Gas, and Diesel Prices $ $/barrel $16. $14. $12. $1. $8. $6. $4. $2. $. Source: EIA, Dept of Energy Gas Diesel WTI (Right Axis) 1967 = Spot Market Price Index: All Commodities 1967 = Spot Market Price Index: Metals

24 Interest Rates & Spreads Percent Year Treasury Note Yield 3-Month Treasury Note Yield Percent TED Spread 3-Month LIBOR Minus 3- Month Treasury Risk Spread Moody's Seasoned Baa Corporate Bond Yield Minus Moody's Seasoned Aaa Corporate Bond Yield

25 Fed Policy Billions $ 3, Bank Assets and Liabilities 2, 2, 1, 1, Jan 28 Apr. July Oct. Jan 29 Apr Jul Oct Jan 21 Apr Jul Oct Jan 211 Apr Jul Oct Jan 212 Excess Required Federal Reserve Assets Money Supply (M1)

26 Domestic Bank Lending Billions $ 9 C&I Loans at Commercial Banks Large Small Billions $ 1,8 Consumer Credit Outstanding 1,6 1,4 1,2 1, 8 6 Revolving 4 2 Nonrevolving Billions $ Home Equity Loans Large Small Percent 12 Delinquency Rates at Commercial Banks C&I Loans Credit Cards Residential Real Estate Commercial Real Estate

27 CBO s Baseline Deficit (January 212) Billions $ Budget Deficit - -1, -1, -2, Percent of GDP Deficit to GDP

28 Alternative Deficit Forecasts Billions $ 4 Budget Deficit Forecast , -1,2-1,4-1,6 CBO Baseline CBO Alternative Fiscal Scenario President's Budget Percent of GDP Deficit to GDP CBO Baseline CBO Alternative Fiscal Scenario President's Budget Forecast

29 Government Baseline Debt (CBO s Baseline January 212) Billions $ 2, Debt 1, 1,, Percent of GDP 8 Debt to GDP

30 Alternative Debt Forecasts Billions $ 2, CBO Baseline Forecast 2, 1, 1,, Debt CBO Alternative Fiscal Scenario President's Budget Percent Debt to GDP Forecast CBO's Baseline Projection Alternative Fiscal Scenario President's Budget

31 Government Revenues and Outlays ( percent of GDP) 3 2 Forecast 2 1 Revenues (%GDP) Outlays (%GDP) Source: CBO Baseline (January 212)

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