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Economic Outlook Webinar
Dr. Joe Webb, DirectorWhatTheyThink
Economics & Research CenterSeptember 24, 2008
Presented by:
WhatTheyThinkEconomics & Research Center
This program will begin at 2 PM EDT
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Agenda
The latest fun & games First look at 2009's economy Technology trends to watch for in 2009 and 2010 Our Readers’ View:
Latest Economic & Research Center Survey Results Fall into Fall with Dr. Joe's Reading List
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The Overall Economy: Y/Y GDP is the real story
Real GDP on a Y/Y basis 2006q3 2.4% 2006q4 2.4% 2007q1 1.3% 2007q2 1.8% 2007q3 2.8% 2007q4 2.3% 2008q1 2.5% 2008q2 2.2%
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Can we believe the economic data? Inflation adjustment in PCE (the way GDP is adjusted) is not
behaving properly on US data, imports, and exports PCE (Personal Consumption Expenditures “deflator”) uses the CPI and
adjusts based on the volumes of purchases CPI is a fixed market basket of thousands of goods, regardless of demand PCE underestimates inflation effects and therefore may overestimate GDP
Rapid changes in prices create data havoc, no matter which direction
It’s a reminder that we should not be preoccupied with short-term data that are always subject to revision months later
Government statisticians will get it right – two years from now
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Leading Economic Indicators
Source: The Conference BoardChart: Dallas Federal Reserve
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Housing Sales
Source: Bureau of the CensusChart: Dallas Federal Reserve
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Initial Jobless Claims and Unemployment Rate
Source: Bureau of Labor Statistics, Department of LaborChart: Dallas Federal Reserve
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Federal Reserve Economy-Wide Industrial Capacity Utilization
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Yield Curve
Source: Federal Reserve BoardChart: Dallas Federal Reserve
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Real Value of the Dollar
Source: Dallas Federal Reserve
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Exports and Imports
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Consumer Sentiment and Confidence
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Unemployment Rising
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Q. Recession or Not? A. Worse Recession
The press has declared a recession, so therefore…
Housing stinks and will get worse Financial crises, huge government
bailout Banks are not lending Unemployment getting worse Auto sales are bad Inflation above historical rates Commodity prices starting to
decline, indicating slowdown
No Recession Only Q4-07 was negative,
and barely so Still at full employment,
even though at high end Exports are growing Fed won’t raise rates Lower commodities prices will add
to GDP and economic activity Housing was a regional bubble and
some markets are improving Financial crisis on way to being
solved Capital gains still at 15%
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Real Issues Stagflation: slow growth, high inflation
Fed backed into a corner of its own making Mortgage markets sluggish, still settling out Taxes will rise, dampening investment
Net present value of projects have higher thresholds because of higher taxes and higher inflation
Weak dollar (on a long-term basis) reduces interest in foreign direct investment Waiting for dollar to stabilize or reverse course
Tax rebates were illusionary, and another stimulus package will be even more inflationary
Productivity > real GDP, means employment will not increase Economic sense continues to suffer in this political year, and can
take a while to unwind, considering recent banking problems
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Bottom Line: A Very Difficult Job for All Industry Executives to Navigate Not a true recession, but it will definitely be called one
Real GDP for the 2009 may be below 2% Q2-08 was 3.2%, revise to 2.2%?
Inflation for the 2008 will top 5%, 2009 as much as 5.5% Unemployment has reached 6%, and can go to 6.5% easily,
or even higher in 2009 Workforce growing faster than normal population growth as households send
second and third workers into workforce Fed will have to put the brakes on easing in 2009 to control inflation,
but may not be able to Oil price is still much higher than last year despite (temporary) pullback
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Commercial Printing
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What the Market is Telling Us Not getting good signals from content-creation
employment data Media shift still ongoing despite media budget cutbacks Monthly changes in print volume accelerating
to the downside; Q4 looks weak Business conditions data indicate “Tale of Two Cities”
split, which is usually signal of shakeout and upcoming credit problems
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Employment Continues to Weaken,Even in Content Creation
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Updated U.S. Commercial Printing Forecasts (in August 2008 $)
Conservative model: 2008: $100.9B 2013: $82.5B
Aggressive model: 2008: $96.8B 2013: $60.2B
GDP model using +2.5% GDP
real growth rate 2008: $103.1B 2012: $96.2B
WTT ERC forecasts 2008: $97.0 2013: $78.0B
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PrintOnlineTotal
Newspaper Industry Woes Not Being Cured by Online RevenuesInflation-adjusted ad dollars, annualized as 4-quarter moving totals
based on data from Newspaper Association of America, www.naa.org and the Bureau of Labor Statistics© 2008, WhatTheyThink Economics & Research Center
Online ad revenuesnow 7.6% of total,
$3.3 B, growing <6%
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Make Sure Growth is Real Stay aggressively ahead of costs by changing procedures,
workflows, tools Penny-pinching is meaningless, creativity is priceless Latest multipliers to compare years in August 2008 dollars
2003: x1.187 2004: x1.156 2005: x1.116 2006: x1.074 2007: x1.054 2008: x1.000
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Commercial Printing Survey Results
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Who Responded? Principal data target: 344 U.S. Commercial Printers
Well-distributed across all employee size classes and subclasses
Representative of WhatTheyThink commercial printer subscribers
Collected data from in-plant printers and other segments To appear in columns, audio charts of the week
and special reports Data projected to marketplace using stratified method
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How 2008 compares to 2007 for U.S. Commercial Printers
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What are the top three or four issues that companies like yours must face in 2009?
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What are the top three or four issues that companies like yours must face in 2009?
The “bottom items”
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What areas are you emphasizing to deal with the slower economy?
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What areas are you emphasizing to deal with the slower economy?
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What areas are you emphasizing to deal with the slower economy?
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Content Creation Survey Results
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What designers have been working on in the last six months
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What ad agencies have been working on in the last six months
Note: mid-size and large agency data not projectable
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Graphic Designers – Media that will grow by more than 10% in their work
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Ad Agencies -- Media that will grow by more than 10% in their work
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Tech Trends to Watch in 2009 and 2010
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“Computer-phones” to be more than just the iPhone
Google Android T-Mobile phone now released The Android project and
the Open Handset Alliance Companies and organizations involved:
Broadcom, China Mobile Communications, eBay, Google, Intel, LG Electronics, Marvell Semiconductor, Motorola, NTT DoCoMo, Nuance Communications, NVIDIA, Qualcomm, Samsung, Sprint Nextel, T-Mobile, Texas Instruments, many others
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http://www.msnbc.msn.com/id/26510338/
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Rise in “netbooks”
Numerous small notebooks from Asus, Dell, others
Usually Linux or Windows XP-based, uses Intel Atom
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Mobile books and other media
E-books will have a major move Amazon Kindle: new size to be out soon
Designed for the textbook market Sold more than 250,000 of current model
Esquire’s e-paper stunt “Mobile Media” will be relatively small market compared
to others, but will become part of daily information and entertainment access
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Web 2.0 (whatever that is) grows
Social networking continues to move beyond its younger audience WSJ and NYT have added social networking in last 2 weeks
More people using computers as “thin clients” Collaboration media go mainstream
Market segments get smaller and smaller; the need to brand and use multiple media grows larger and larger
Public relations continues to be key area
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Dr. Joe’s Fall Reading List
Study hard!Tests to be Given During Graph Expo
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Dr. Joe’s Fall Reading List How media are used by 21 different B2B segments,
an American Business Media survey Annual Veronis Suhler Stevenson communications
markets forecast summarized in their press release Graphic Design USA survey of designers… their verbatim
comments are priceless Microsoft’s PC ad campaign? Produced on a Mac!
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Dr. Joe’s Fall Reading List Financial Times:
Greenspan’s Sins Come Back to Haunt Us LA Times sues its new buyer: why it’s a bad idea
Good discussion of what ails the newspaper biz Investor Mark Cuban tells newspapers to declare bankruptcy New York Magazine: Is the Book Business at its End? B2B: Why Custom Publishing is Staying Strong Pew Internet Survey: Games and Civic Involvement
It’s not what is commonly thought
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Dr. Joe’s Fall Reading List Price Waterhouse Coopers State of Publishing and Media
Report Access to summaries News article about it
Offline media (“out of home media”) discussed by New York Times
E-mail gaining in utility among marketers (DM News) Best implementation of digital magazine I have seen
The Sporting News according to Texterity’s implementation
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AdWeek: The Real Digital Revolution … the real digital revolution is about consumer empowerment, the ability to
research and learn about products and services and make decisions independently from, and in spite of, any sort of advertising messages.
…"They" are talking about us and we can't butt in. … Until recently, the paradigm went something like this: Ad leads to purchase. Nowadays, it goes like this: Ad leads to Google leads to purchase. That's seismic.
Car companies are among the ones hardest hit by this shift… consumers [are] turning in droves to review sites, message boards and the like, to get the real story on the vehicles they plan to buy -- even to find out what kind of cars someone like them should plan to buy…
That's a pretty shocking development in a market that was shrouded in mystery and misinformation for years and where consumers had nothing more to rely on for information than the materials the car companies issued.
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Dr. Joe’s Fall Reading List
How they date recessions at the NBER How the Consumer Price Index works:
the BLS answers its critics World Bank data resources Dr. Joe’s free software list
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Other Dr. Joe Items
Dr. Joe on the road… go to “the sightings” page on WhatTheyThink
Dr. Joe and Richard Romano have rewritten “Renewing the Printing Industry.” It’s now available at no charge as a free download thanks to our sponsor MindFireInc.
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Thank You to MindFireInc!
QUESTIONS?Mark Your Calendars:
Next Economic Outlook Webinaris December 10, 2008
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Audio Chart of the Week - FREE Chart of Industry Trend
or Topic Weekly 3 to 6 minutes Wide range of topics from
content creation and technology to end-use markets and more
Use the chart in internal presentations
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Management, Marketing, and Economic Notes - FREE “Blog”-like comments about
latest news A lot happens between
weekly columns Sometimes I just vent
“Road Warrior” Comments and
recommendations about personal computing and communications technologies
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Economics & Research Center - FREE ERC Industry Snapshot
Updated just hours after new industry data are published
Data Shipments, capacity Imports/exports Employment Postal weights and pieces
Markets Content creation & printing Paper US & Canada
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In Search of Dr. Joe… and others… WhatTheyThink.com
“Mondays with Dr. Joe” Economics & Research Center (ERC) ERC Notes ERC Industry Snapshot
PrintCEOBlog.com Economic and other webinars