LUNCH WITH THE KEYNOTE SPEAKER...LUNCH WITH THE KEYNOTE SPEAKER PRESENTATION BY DR. GIOVANNI OLIVEI Dr. Giovanni P. Olivei | Vice President and Economist, Federal Reserve Bank of BostonDisclaimer

LUNCH WITH THE KEYNOTE SPEAKER

PRESENTATION BY DR. GIOVANNI OLIVEIDr. Giovanni P. Olivei | Vice President and Economist, Federal Reserve Bank of Boston

The U.S. Macro Outlook

Massachusetts Investor ConferenceNovember 20, 2019Giovanni Olivei, Vice President and EconomistFederal Reserve Bank of Boston

Disclaimer

Views are my own and do not necessarily represent the views of the Federal Reserve Bank of Boston or the Federal Reserve System.

Source: Bureau of Labor Statistics

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1947-73 1973-90 1990-07 2007-18

Labor Productivity GrowthNonfinancial Corporate Sector

%

Source: Bureau of Economic Analysis

8.0

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0

1995:Q1 1997:Q1 1999:Q1 2001:Q1 2003:Q1 2005:Q1 2007:Q1 2009:Q1 2011:Q1 2013:Q1 2015:Q1 2017:Q1 2019:Q1

Investment in Equipment and Intellectual PropertyShare of GDP

%

Source: Census Bureau

60000

70000

80000

90000

100000

110000

120000

130000

2004 Q32005 Q32006 Q32007 Q32008 Q32009 Q32010 Q32011 Q32012 Q32013 Q32014 Q32015 Q32016 Q32017 Q32018 Q3

Business Formation

Business Formation (within 4 Qtrs)

Source: USPTO, WIPO

0

50000

100000

150000

200000

250000

300000

350000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Patent Grant Count

Utility Patent Grants, U.S. Origin Utility Patent Grants, Foreign Origin

Source: Bureau of Labor Statistics

54

56

58

60

62

64

66

68

1995:Q1 1997:Q1 1999:Q1 2001:Q1 2003:Q1 2005:Q1 2007:Q1 2009:Q1 2011:Q1 2013:Q1 2015:Q1 2017:Q1 2019:Q1

Labor Share

%

Nonfinancial Corporate

Nonfarm Business

Source: Bureau of Labor Statistics

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

11.0

Jan

-92

Jan

-93

Jan

-94

Jan

-95

Jan

-96

Jan

-97

Jan

-98

Jan

-99

Jan

-00

Jan

-01

Jan

-02

Jan

-03

Jan

-04

Jan

-05

Jan

-06

Jan

-07

Jan

-08

Jan

-09

Jan

-10

Jan

-11

Jan

-12

Jan

-13

Jan

-14

Jan

-15

Jan

-16

Jan

-17

Jan

-18

Jan

-19

Unemployment Rate

%

Source: Bureau of Labor Statistics

25

30

35

40

45

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Civilian Labor ForceAge and Education

Labor Force: 45 Years & Over, % of Total Labor Force: 25 Years & Over, College Graduates, % of Total

Source: Bureau of Labor Statistics

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Unemployment RateAge and Education

Civilian Unemployment Rate: 16+ yr, %

Civilian Unemployment Rate: 45+ yr, %

Civilian Unemployment Rate: 25+ yr, Bachelor Degree and Higher, %

Sources: Bureau of Labor Statistics and author’s calculations

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

Wage InflationAverage Hourly Earnings

Avg Hourly Earnings: Prod & Nonsupervisory Workers (%,Q4/Q4)

Avg Hourly Earnings: Prod & Nonsupervisory Workers (%,Q4/Q4), Productivity Adjusted

Source: Bureau of Labor Statistics

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

20

30

40

50

60

70

80

90

100

110

120

Corporate Profits and Wage Inflation

Nonfinancial Corporations: Real Unit Profits (SA, 2012=100)

Avg Hourly Earnings: Prod & Nonsupervisory Workers (%,Q4/Q4)

Real Unit Profits Index, 2012 = 100

Wage Inflation%

Sources: Bureau of Labor Statistics and NBER

-4.0

-3.0

-2.0

-1.0

0.0

1.0

2.0

3.0

4.0

5.0

Jan

-60

Sep

-61

May

-63

Jan

-65

Sep

-66

May

-68

Jan

-70

Sep

-71

May

-73

Jan

-75

Sep

-76

May

-78

Jan

-80

Sep

-81

May

-83

Jan

-85

Sep

-86

May

-88

Jan

-90

Sep

-91

May

-93

Jan

-95

Sep

-96

May

-98

Jan

-00

Sep

-01

May

-03

Jan

-05

Sep

-06

May

-08

Jan

-10

Sep

-11

May

-13

Jan

-15

Sep

-16

May

-18

Unemployment Rate Changes and Recessions

12-month Change in the Unemployment Rate

%

Source: Federal Reserve Board and NBER

0

2

4

6

8

10

12

14

Sep

-82

Oct

-83

No

v-8

4

Dec

-85

Jan

-87

Feb

-88

Mar

-89

Ap

r-9

0

May

-91

Jun

-92

Jul-

93

Au

g-9

4

Sep

-95

Oct

-96

No

v-9

7

Dec

-98

Jan

-00

Feb

-01

Mar

-02

Ap

r-0

3

May

-04

Jun

-05

Jul-

06

Au

g-0

7

Sep

-08

Oct

-09

No

v-1

0

Dec

-11

Jan

-13

Feb

-14

Mar

-15

Ap

r-1

6

May

-17

Jun

-18

Jul-

19

Federal Funds Rate Target and Recessions

%