Economic Outlook March 2015 Economic Policy Division U.S. GDP - - PowerPoint PPT Presentation

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Economic Outlook March 2015 Economic Policy Division U.S. GDP - - PowerPoint PPT Presentation

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Economic Outlook March 2015 Economic Policy Division U.S. GDP Actual and Potential Quarterly, Q1 1980 to Q4 2015 Real GDP Trillion 2009 Dollars Log Scale Forecast $18.0 $15.0 Actual $12.5 Potential $9.0 $6.5 1980 1985 1990 1995 2000

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SLIDE 1

Economic Outlook

March 2015

Economic Policy Division

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SLIDE 2

U.S. GDP Actual and Potential

Quarterly, Q1 1980 to Q4 2015

Real GDP Trillion 2009 Dollars Log Scale

1980 1985 1990 1995 2000 2005 2010

Actual Potential Potential GDP estimated by Congressional Budget Office

$15.0 $9.0 $18.0 $12.5 $6.5

Forecast

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SLIDE 3

U.S. GDP: Estimates of Potential

(Real $2013 dollars)

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SLIDE 4

U.S. Potential GDP

(Real $2009 dollars)

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

% Change Forecast

Potential GDP estimated by Congressional Budget Office

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SLIDE 5

1980 1985 1990 1995 2000 2005 2010 2015

  • 10
  • 5

5 10

Percent Change, Annual Rate

Real GDP Outlook

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SLIDE 6
  • 9
  • 6
  • 3

3 6 9 1980 1985 1990 1995 2000 2005 2010 2015 Percent Change, Annual Rate

Real Personal Consumption Expenditures

Personal Consumption Outlook

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SLIDE 7

10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 1980 1985 1990 $

Real Disposable per Capita Personal Income

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SLIDE 8

Household Net Worth

10 20 30 40 50 60 70 80 90 1980 1985 1990 1995 2000 2005 2010 Trillion $

Household Wealth

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SLIDE 9

Household Balance Sheet

10 20 30 40 50 60 70 80 90 100 1980 1985 1990 1995 2000 2005 2010 Total Assets Nonfinancial Assets Financial Assets Trillion $

Household Assets

5 10 15 20 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Trillion $

Household Liabilities

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SLIDE 10

Domestic Bank Lending

2,000 2,300 2,600 2,900 3,200 3,500 2007 2008 2009 2010 2011 2012 2013 2014 Billions $

Consumer Credit Outstanding

1,300 1,600 2007 2008 2009 2010 2011 2012 2013 2014 Billions $

Residential Real Estate Loans

600 900 1,200 2007 2008 2009 2010 2011 2012 2013 2014 Billions $

Consumer Revolving Loans

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SLIDE 11

Consumer Confidence

‐10 10 30 50 70 90 110 130 150 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 University of Michigan Consumer Sentiment Conference Board Consumer Confidence

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SLIDE 12

Real Business Fixed Investment

‐30 ‐20 ‐10 10 20 1990 1995 2000 2005 2010 2015

Percent Change, Annual Rate

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SLIDE 13

40 50 60 70 80 90 100 110 120 1980 1985 1990 1995 2000 2005 2010 Percent of Capacity

Investment Drivers

Industrial Production

60 65 70 75 80 85 90 1980 1985 1990 1995 2000 2005 2010 2015 Percent of Capacity

Capacity Utilization

1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2 1980 1985 1990 1995 2000 2005 2010 2015 Percent of Capacity

Inventory-to Sales-Ratio

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SLIDE 14

Sector Indicators

80 100 120 140 2006 2007 2008 2009 2010 2011 2012 2013 2014 SA, 2000=100

ATA Truck Tonnage Index

300 400 500 600 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 thous, 6-month moving average

Total Rail Carloadings

800 900 1,000 1,100 1,200 1,300 1,400 2006 2007 2008 2009 2010 2011 2012 2013 2014 6 month moving average; thous. tons

Boxboard Production

2 4 6 8 10 12 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ Bil, 3-month moving average

Monthly Leasing and Finance Index

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SLIDE 15

100 200 300 400 500 600 700 800 900 1,000 2007 2008 2009 2010 2011 2012 2013 2014 small large Billions $

C&I Loans at Commercial Banks

Domestic Bank Lending

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SLIDE 16

Business Confidence

30 35 40 45 50 55 60 65 70 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

ISM Manufacturing Index

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SLIDE 17

Oil

3,000 4,000 5,000 6,000 7,000 8,000 9,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Thousands of Barrels per Day

US Crude Oil Production

20 40 60 80 100 120 140 160 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Spot Oil Prices: West Texas Intermediate

$/ Barrel

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SLIDE 18

Natural Gas

15 18 21 24 27 30 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Trillion Cubic Feet

US Natural Gas Production

2 4 6 8 10 12 14 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Natural Gas Prices: Henry Hub

$/ Barrel

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SLIDE 19

Labor Market

100 110 120 130 140 150 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Million 200 300 400 500 600 700 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 SA, Thousands, 4-week Moving Average 2 4 6 8 10 12 14 16 18 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Unemployment Rate U‐6 Percent

Total Nonfarm Jobs Initial Unemployment Claims Unemployment Rate February 5.5%

100 110 120 130 140 150 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Million

Household Employment

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SLIDE 20

62 64 66 68 1980 1985 1990 1995 2000 2005 2010 2015 SA, percent

Civilian Participation Rate

5 10 15 20 25 30 1980 1985 1990 1995 2000 2005 2010 2015 Median Weeks Unemployed, SA

Duration of Unemployment

2,000 4,000 6,000 8,000 10,000 1980 1985 1990 1995 2000 2005 2010 Thousands

Part-time for Economic Reasons

500 1000 1500 2000 2500 3000 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Thousands

Marginally Attached Discouraged Workers

Labor Market

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SLIDE 21

Employment-Population Ratio

52 54 56 58 60 62 64 66 1980 1985 1990 1995 2000 2005 2010 Percent

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SLIDE 22

0.5 1.0 1.5 2.0 2.5 3.0 3.5 2000 2001 2003 2005 2008 2010 2012 2014

Interest Rate Spreads

Risk Spread

Moody's Seasoned Baa Corporate Bond Yield Minus Moody's Seasoned Aaa Corporate Bond Yield

‐2.0 ‐1.0 0.0 1.0 2.0 3.0 4.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Percent

Yield Spread

10-Year Treasury – 3 month Treasury

1 2 3 4 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Percent

TED Spread

3-Month LIBOR Minus 3-Month Treasury

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SLIDE 23

500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Jan 2008

  • Apr. July Oct. Jan

2009 Apr Jul Oct Jan 2010 Apr Jul Oct Jan 2011 Apr Jul Oct Jan 2012 Apr Jul Oct Jan 2013 Apr Jul Oct Jan 2014 Apr Jul Oct Jan 2015 Billions $

Excess Federal Reserve Assets Money Supply (M1)

Fed Policy

Bank Assets and Liabilities

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SLIDE 24

U.S. Trade

‐900 ‐800 ‐700 ‐600 ‐500 ‐400 ‐300 ‐200 ‐100 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 SAAR, Bil. Chn. 2000$

Real Net Exports of Goods and Services

65 75 85 95 105 115 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 Exchange Rate (Major Currencies/US$)

U.S. Nominal Trade Weighted Exchange Rate

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SLIDE 25

Eurozone Growth and Jobs

Source: Oxford Economics ‐12.0 ‐10.0 ‐8.0 ‐6.0 ‐4.0 ‐2.0 0.0 2.0 4.0 6.0 2009 2010 2011 2012 2013 2014 Percent Change, Annual Rate

Real GDP

6.0 8.0 10.0 12.0 14.0 2009 2010 2011 2012 2013 2014 Percent

Unemployment Rates

‐1.0 ‐0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 2009 2010 2011 2012 2013 2014

Inflation: Eurozone CPI Percent Change, Year to

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SLIDE 26

Eurozone Monetary Policy

Source: Oxford Economics ‐0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 2009 2010 2011 2012 2013 2014

Refinancing Operations Marginal Lending Rate Deposit Rate

Percent

ECB Monetary Policy Actions

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SLIDE 27

European Growth

Source: Oxford Economics ‐6.0 ‐4.0 ‐2.0 0.0 2.0 4.0 6.0 8.0 10.0 2010 2011 2012 2013 2014 France Germany Italy Spain Percent Change, Annual Rate

Real GDP

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SLIDE 28

United Kingdom Growth and Jobs

Source: Oxford Economics ‐12.0 ‐10.0 ‐8.0 ‐6.0 ‐4.0 ‐2.0 0.0 2.0 4.0 6.0 2009 2010 2011 2012 2013 2014 Percent Change, Annual Rate

Real GDP

2 4 6 2009 2010 2011 2012 2013 2014 Percent

Unemployment Rates

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SLIDE 29

Source: Oxford Economics

Emerging Markets

‐2.0 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 2010 2011 2012 2013 2014 Mexico China India Brazil South Africa Russia Percent Change, Year to Year

Real GDP

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SLIDE 30

‐15 ‐10 ‐5 5 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Percent of GDP ‐2000 ‐1500 ‐1000 ‐500 500 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Billions $

Deficit to GDP

CBO’s Baseline Deficit

(January 2015) Budget Deficit

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SLIDE 31

10 20 30 40 50 60 70 80 90 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Percent of GDP

Government Baseline Outside Debt

(January 2015) Debt to GDP Debt

5,000 10,000 15,000 20,000 25,000 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Billions $

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SLIDE 32

Government Revenues and Outlays

( percent of GDP)

5 10 15 20 25 30 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 Revenues (%GDP) Outlays (%GDP)

Forecast

Source: CBO Baseline (January 2015)

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SLIDE 33

34.4% 53.2% 12.5%

FY 2000

(% of total)

Total Outlays: $1.8 trillion 33.6% 59.8% 6.5%

FY 2014

(% of total)

Total Outlays: $3.5 trillion 22.9% 63.6% 13.5%

FY 2025

(% of total)

Total Outlays: $5.9 trillion

Discretionary Entitlements Net Interest

Government Outlays

Source: CBO Baseline (January 2015)

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SLIDE 34

FY 2014 Revenues and Outlays

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 $‐ $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500 $4,000 Billions

Discretionary Individual and Corporate Income Taxes Other

Revenues Outlays

Mandatory (entitlements and net interest) Discretionary

Source: CBO Baseline (January 2015)

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SLIDE 35

FY 2025 Revenues and Outlays

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $‐ $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 Billions

Social Insurance Taxes Individual and Corporate Income Taxes Other

Revenues Outlays

Mandatory (entitlements and net interest) Discretionary

Source: CBO Baseline (January 2015)