U.S. Economic Update and Outlook Carolinas Cash Adventure Conference May 24, 2016 Richard Kaglic Senior Regional Economist
U.S. Economic Update and Outlook
Carolinas Cash Adventure ConferenceMay 24, 2016
Richard KaglicSenior Regional Economist
2
The views expressed here are my own and do not represent those of my colleagues at the Federal Reserve
-9
-8
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-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
5
6
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Percent change from previous quarter at annual rate
Note: Projection is the median, central tendency, and range from the March 2016 Summary of Economic Projections. Red dots indicate median projections. Projections of change in real gross domestic product (GDP) are from the fourth quarter of the previous year to the fourth quarter of the year indicated. 3
Q10.5%
Source: Bureau of Economic Analysis via Haver Analytics & Federal Reserve Board
FOMC Projection
Real Gross Domestic Product
75
80
85
90
95
100
105
110
115
120
125
130
135
140
75
80
85
90
95
100
105
110
115
120
125
130
135
140
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
4
2012 = 100
March
Industrial Production
Source: Board of Governors via Haver Analytics
Manufacturing
Mining
Overall
Mar. Apr. Mar. Apr.
Purchasing Managers Index 51.8 50.8 Non-Manufacturing Index 54.5 55.7
Production 55.3 54.2 Business Activity 59.8 58.8
New Orders 58.3 55.8 New Orders 56.7 59.9
Employment 48.1 49.2 Employment 50.3 53.0
Supplier Deliveries 50.2 49.1 Supplier Deliveries 51.0 51.0
Inventories 47.0 45.5 Inventories 52.5 54.0
Prices 51.5 59.0 Prices 49.1 53.4
Backlog of Orders 51.0 50.5 Backlog of Orders 52.0 51.5
New Export Orders 52.0 52.5 New Export Orders 58.5 56.5
Imports 49.5 50.0 Imports 53.0 54.0
MANUFACTURING BUSINESS: NON-MANUFACTURING BUSINESS:
5DIFFUSION INDEXES: Numbers above 50 percent indicate more favorable responses towards economic activity.
ISM: Business Survey Indexes
Source: Institute for Supply Management via Haver Analytics
6Source: Bureau of Economic Analysis via Haver Analytics & Federal Reserve Board
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
GDP PCE BFI Res Inventory Xports Imports Govt
2015q4
2016q1
Contributions to Real GDP Growth
-4
-3
-2
-1
0
1
2
3
4
5
6
-4
-3
-2
-1
0
1
2
3
4
5
6
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
7
Disposable Personal Income & Expenditures
Source: Bureau of Economic Analysis via Haver Analytics
12 Month % Change
Real Personal Consumption Expenditure
Real Disposable Personal Income
March
Note: Real disposable personal Income was adjusted to remove tax-induced income shifting near end of 2012.
January February MarchIncome 0.2 0.2 0.3Expenditures 0.0 0.3 0.0
Month over Month % Change
450
500
550
600
650
700
450
500
550
600
650
700
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
8
Q4.
Household Net WorthPercent of disposable personal income
Source: Z.1 Financial Accounts of the United States via Haver Analytics
2.5
3
3.5
4
4.5
5
5.5
6
6.5
2.5
3
3.5
4
4.5
5
5.5
6
6.5
200020012002200320042005200620072008200920102011201220132014201520162017
9
Existing Single-Family Home Sales
Source: National Association of Realtors via Haver Analytics
Millions of Homes
Average Annual Existing Home Sales: 1990 through 1999
March4.76 mil.
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2000 2002 2004 2006 2008 2010 2012 2014 2016
10
Private Single-Family Housing Starts & Permits
Source: Census Bureau via Haver Analytics
Millions of Starts & Permits
Starts
Permits
1990 - 1999 Average Housing Starts
March
45
50
55
60
65
70
75
45
50
55
60
65
70
75
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
11
Current $, Billions
Shipments
March
New Orders
Core Capital Goods
Notes: Core capital goods are nondefense capital goods excluding aircraft.
Source: Census Bureau via Haver Analytics
12
Current $, Billions
Exports
Source: Census Bureau via Haver Analytics
100
120
140
160
180
200
100
120
140
160
180
200
06 07 08 09 10 11 12 13 14 15 16
75
85
95
105
115
125
135
75
85
95
105
115
125
135
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
13
Exchange Value of the USDIndex, March 1973 = 100
Source: Board of Governors via Haver Analytics
Notes: Measured as the real broad trade-weighted exchange value of the United States Dollar.
April
-800
-700
-600
-500
-400
-300
-200
-100
0
100
200
300
400
-800
-700
-600
-500
-400
-300
-200
-100
0
100
200
300
400
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Quarterly average of monthly changes, thousands of persons
Q1Average
14
Nonfarm Payroll Employment
Source: Bureau of Labor Statistics via Haver Analytics
Apr. 160Mar. 208Feb. 233Jan. 168Dec. 271
Monthly Change
15
Measures of Labor Utilization
Source: Bureau of Labor Statistics via Haver Analytics
3
6
9
12
15
18
3
6
9
12
15
18
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Percent
U3: Official Unemployment Rate
U6: U5 + Involuntary Part-Time
U5: U3 + Discouraged + Marginally Attached
April
-1.5
-1
-0.5
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
-1.5
-1
-0.5
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
16
March0.8%
FOMC Projection
Personal Consumption Expenditure Price Index12 Month % Change
Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics
2% Longer-run Target
Notes: FOMC projection is the median, range, and central tendency for Q4/Q4 percent changes, from the March 2016 meeting. Red dots indicate median projections.
-35-30-25-20-15-10-5051015202530354045
-21-18-15-12-9-6-30369
12151821242730
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
17
PPI Core Intermediate
Goods(Left Axis)
Commodity Research Bureau Spot Commodity
Price Index(Right Axis)
12 Month % Change
Commodity Price Indexes12 Month % Change
Source: Bureau of Labor Statistics & Commodity Research Bureau via Haver Analytics
April
Price Indexes March AprilPPI Core Intermed. Goods -2.9% -2.5%CRBS Spot Commodities -3.3% -1.0%
Questions/comments?
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