More of the Same; Or now for Something Completely Different? C2ER Place cover image here Richard Wobbekind Chief Economist and Associate Dean for Business and Government Relations June 14, 2017
Real GDP Growth Quarterly Real GDP Percent Change, SAAR 10 8 6 4 2 0-2 -4-6 -8-10 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Sources: Bureau of Economic Analysis and Consensus Forecasts.
Long-Term Real GDP Growth Trend Percent Change 20-Year Quarterly Moving Average 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Q4 1967 Q4 1975 Q4 1983 Q4 1991 Q4 1999 Q4 2007 Q4 2015 Source: Bureau of Economic Analysis, Real GDP.
Economic Growth Percent Change Personal Consumption Expenditures 8.00000 6.00000 4.00000 2.00000 0.00000-2.00000-4.00000-6.00000 Percent Change 25 20 15 10 5 0-5 Year-over-Year SAAR Fixed Business Investment Percent Change 10 8 6 4 2 0-2 -4-6 -8-10 2000 2002 2004 2006 2008 2010 2012 2014 2016 Percent Change Government Spending Year-over-Year SAAR Goods Exports 20 Year-over-Year 15 10 Year-over-Year 5 0 SAAR -5-10 -10-15 -15-20 -25-20 -30-25 2000 2001 2002 2004 2005 2006 2008 2009 2010 2012 2013 2014 2016 201 2000 2002 2004 2006 2008 2010 2012 2014 2016 Sources: Bureau of Economic Analysis, the National Bureau of Economic Research, and the Business Research Division.
Recession 8 Months Thousands, Month-over- Month, 12-Mo Average 300 200 100 0-100 National Employment Month-over-Month Change, 12-Month Average -200-300 -400-500 Recession 18 Months -600 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Sources: Bureau of Labor Statistics (Seasonally Adjusted), Moody s Analytics, and NBER.
Labor Underutilization Percentage of Labor Force 18.0 16.0 14.0 12.0 10.0 8.0 Average U-6 U-6 8.4% 6.0 4.0 Average U-3 U-3 4.3% 2.0 0.0 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Source: Bureau of Labor Statistics (Seasonally Adjusted).
State Employment Growth Year-over-Year April 2017 Source: Bureau of Labor Statistics (Seasonally Adjusted).
Demographics
2014 2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2052 2054 2056 2058 2060 U.S. Population by Race/Origin 1990-2060 Millions 450 400 350 300 250 200 All Other Races, Hispanic, Not Hispanic All Races 150 100 50 0 White, Not Hispanic Source: U.S. Census Bureau, 2014 National Population Projections.
U.S. Population Shares by Race/Origin Share of Population 70.0% 60.0% 50.0% White, Not Hispanic 40.0% 30.0% 20.0% 10.0% All Other Races, Not Hispanic Hispanic, All Races 0.0% 2014 2024 2034 2044 2054 Source: U.S. Census Bureau, 2014 National Population Projections.
Prime Working Age Population, 2015 Source: U.S. Census Bureau (2015). Includes 30-64 years of age.
Hispanic Population, 2015 Source: U.S. Census Bureau (2015).
Labor Force Participation Rate 68.0 67.0 66.0 65.0 64.0 63.0 62.0 61.0 60.0 59.0 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 Source: Bureau of Labor Statistics (Seasonally Adjusted).
Labor Force Participation Rate By Race/Ethnicity 71.0 70.0 69.0 68.0 67.0 66.0 White Total Hispanic or Latino Asian 65.0 64.0 63.0 Black or African American 62.0 61.0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Source: Bureau of Labor Statistics (Not Seasonally Adjusted).
Labor Force Participation Rates National by Age Cohort Percent 90 80 70 1986 2016 1998 1990 1997 2009 60 50 40 30 20 Peak 2016 Current 2016 10 0 20-24 25-34 35-44 45-54 55-64 65+ Age Group Source: Bureau of Labor Statistics, Current Population Survey (CPS).
Labor Force and Unemployment Rate National by Educational Attainment, Population 25 and Over, 2016 Percentage 80 70 60 50 LFPR 40 30 20 10 Unemployment Rate 0 Less than a high school diploma High school graduates Some college, no degree Associate degree Bachelor's degree Advanced degree Source: Bureau of Labor Statistics, Current Population Survey (CPS), Seasonally Adjusted.
Wage and Employment Benefits 2016 Unemployment Rate Median Weekly Earnings 1.6% 1.6% 2.4% 2.7% Doctoral degree Professional degree Master's degree Bachelor's degree 1,664 $1,745 $1,380 $1,156 3.6% Associate's degree $819 4.4% Some college, no degree $756 5.2% High school diploma $692 7.4% Less than a high school diploma $504 Source: Bureau of Labor Statistics. Note: Data are for persons age 25 and over. Earnings are for full-time wage and salary workers.
U.S. Income and Consumption 4.0 Real Disposable Income Percent Change 4.0 Real Personal Consumption 3.0 2.2% 2.8% 3.0 2.4% 2.6% 2.0 2.0 1.0 1.0 0.0 0.0-1.0-1.0-2.0-2.0-3.0 2007 2009 2011 2013 2015 2017-3.0 2008 2010 2012 2014 2016 2018 Sources: Consensus Forecasts.
Personal Income Growth 2016 Source: Bureau of Economic Analysis.
Household Wealth Q4 2000-Q4 2016 $ Trillions 120 100 80 Other Assets 60 40 20 0-20 Q4 2000 Q4 2002 Q4 2004 Q4 2006 Q4 2008 Q4 2010 Q4 2012 Q4 2014 Q4 2016 Mutual Funds Corporate Equities Real Estate Total Liabilities Source: Federal Reserve Board, Balance Sheet of Households and Nonprofit Organizations (B.101) (Not Seasonally Adjusted).
Household Debt Burden Percent of Disposable Income DSR 13.5 13.0 12.5 12.0 11.5 Debt Service Ratio (L) FOR 18.5 18.0 17.5 17.0 11.0 10.5 10.0 9.5 Financial Obligations Ratio (R) 16.5 16.0 15.5 9.0 1991 1994 1997 2000 2003 2006 2009 2012 2015 15.0 Source: Federal Reserve, Household Debt Service and Obligations Ratios.
Index of Consumer Confidence 1985=100 Recession 8 months 160 Recession 18 months 140 Mountain Region 120 100 80 United States 60 40 20 0 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 Sources: The Conference Board and National Bureau of Economic Research.
Vehicle Sales and Retail Sales Thousands, SAAR 25,000 Vehicle Sales Retail and Food Services Sales Annual Percent Change 15.0 20,000 10.0 15,000 10,000 5.0 0.0-5.0 5,000-10.0 0 2003 2005 2007 2009 2011 2013 2015 2017-15.0 2004 2006 2008 2010 2012 2014 2017 Sources: Bureau of Economic Analysis, Moody s Analytics, U.S. Census Bureau (Seasonally Adjusted Annual Rate).
Nominal Corporate Profits and Business Fixed Investment Percent Change Nominal Pre-Tax Corporate Profits Percent Change Business Fixed Investment 30.0 10.0 25.0 20.0 15.0 10.0 5.0 0.0 4.1% 3.9% 5.0 3.7% 3.2% -5.0 0.0-5.0-10.0-10.0-15.0-15.0-20.0 2004 2006 2008 2010 2012 2014 2016 2018-20.0 2004 2006 2008 2010 2012 2014 2016 2018 Sources: Bureau of Economic Analysis, Consensus Forecasts.
ISM Indices 70 65 60 55 ISM Manufacturing Index 70 65 60 55 ISM Non-Manufacturing Index 50 50 45 45 40 40 35 35 30 2003 2005 2007 2009 2011 2013 2015 2017 30 2003 2005 2007 2009 2011 2013 2015 2017 Source: Institute for Supply Management (ISM).
National FHFA Home Price Growth Year over Year Q4 2016 Source: Federal Housing Finance Agency Home Price Index, All Transactions Index.
National Housing Starts Millions 2.5 2.0 1.5 1.3 1.4 1.0 0.5 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Sources: U.S. Census Bureau and Consensus Forecasts.
Federal Budget Balance $ Billions 0-200 -400-600 -800 -$600 -$689-1,000-1,200-1,400-1,600 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Sources: Bureau of Economic Analysis and Consensus Forecasts.
U.S. Nominal Broad Dollar Index and Real Net Exports U.S. Nominal Broad Dollar Index 1973=100 130 125 $ Billions 0-100 Real Net Exports 120 115 110 105 100 95 90 2000 2002 2004 2006 2008 2010 2012 2014 2016-200 -300-400 -500-600 -700-800 -900 -$634 -$699 2001 2003 2005 2007 2009 2011 2013 2015 2017 Sources: Federal Reserve, Bureau of Economic Analysis, and Consensus Forecasts.
Money, Interest Rates, and Prices
The FED $ in Millions 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 Treasury Securities Federal Agency Debt Securities Mortgage Backed Securities Other Assets 0-1,000,000-2,000,000 Deposits -3,000,000 Reserve Notes Outstanding, Net Holdings -4,000,000 Other Liabilities -5,000,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Source: Federal Reserve Balance Sheet, H.4.1 Statistical Release.
Interest Rates 2000-2018 (Forecast) Percent 7.0 6.0 10-Year T-Note 5.0 4.0 3.0 2.0 1.0 3-Month T-Bill 0.0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 Sources: Federal Reserve and Moody s.
Total Debt Balance and its Composition Percent 14 Mortgage HE Revolving Auto Loan Credit Card Student Loan Other 12 10 8 6 (3%) (10%) (6%) (9%) (4%) (67%) 4 2 0 2003 Q4 2004 Q4 2005 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 Source: FRBNY Consumer Credit Panel/Equifax.
2003 Q2 2003 Q4 2004 Q2 2004 Q4 2005 Q2 2005 Q4 2006 Q2 2006 Q4 2007 Q2 2007 Q4 2008 Q2 2008 Q4 2009 Q2 2009 Q4 2010 Q2 2010 Q4 2011 Q2 2011 Q4 2012 Q2 2012 Q4 2013 Q2 2013 Q4 2014 Q2 2014 Q4 2015 Q2 2015 Q4 2016 Q2 2016 Q4 Loan Delinquency Percent of Balance 90+ Days Delinquent by Loan Type Percent 16 14 Mortgage HELOC Auto Loan Credit Card Student Loan Other All 12 10 8 6 4 2 0 Source: FRBNY Consumer Credit Panel.
National Inflation Year-over-Year Percent Change 6.0 5.0 4.0 3.0 2.0 Shelter All items less food and energy 1.0 0.0 All items -1.0-2.0-3.0 Mar-01 Mar-03 Mar-05 Mar-07 Mar-09 Mar-11 Mar-13 Mar-15 Mar-17 Source: Bureau of Labor Statistics (SA).
International and National Summary GDP growth nearing potential Balance sheets getting stronger Global output and trade growth Strong Value of the dollar Rising (but low) interest rates Inflation modest, but a future concern?
Concerns Interest rates Global growth Commodity prices Value of the dollar Policy
Thank You!
IN MD LA KS OK IL AL ME IA WY PA AR Ak NM NY MS OH DE NJ VT WV FHFA state bar chart, 2010-2016 5-Yr Home Price Growth Rates 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% NV CA AZ CO FL OR WA DC ID GA MI UT TX HI TN MN SC ND NC MA NH SD NE MT MO WI KY RI VA Source: Federal Housing Finance Agency (FHFA)
CA IN MS RI TN MN NJ NV AR KS WA CT IL MA TX FL ID IA KY MD MI PA SC VT WV UT OH DC AZ ME NE VA NM LA ND WI NC OK SD MO AL GA HI NY WY CO AK DE MT NH OR State Sales Tax Rate 2017 State Sales Tax, 2017 10.0% 9.0% 8.0% 7.0% 6.0% 5.0% U.S. Average: 5.1% 4.0% 3.0% 2.0% 1.0% 0.0% Source: Tax Foundation.
LA TN AR AL WA OK IL KS NY AZ CA TX NV MO NM CO MN SC OH MS GA INRI NC NE NJ FL IA ND UT SD CT PA WV MA VT ID KY MD MI DC VA ME WI WY HI AK DE MT NH OR Combined State and Local Sales Tax Rate State and Local Sales Tax, 2017 10.0% 9.0% 8.0% 7.0% 6.0% U.S. Average: 6.47% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Source: Tax Foundation.
AK FL NV NH SD TX WA WY TN ND OH NM HI MS DE RI OK IN MA LA KS PA NJ KY AZ AL IL WV SC ME GA ID VT WI MN NE CT MD NC MT UT AR IA CO VA NY CA MO ORMI State Personal Income Tax Revenue Percent of General Revenue that Stems from Personal Income Tax Percent of General Fund, Fall 2016 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Source: National Association of Budget Officers, The Fiscal Survey of States, Fall 2016. Calculations by BRD staff.