SLIDE 1
US Macro Overview March 5, 2019
SLIDE 2 Overview
- Real GDP grew 3.1% in 2018, well above the economy’s
potential growth rate.
- Labor markets continued to tighten while the rate of increase of
wages and trend inflation moved higher.
- Growth of real GDP expected to slow in 2019, but there are a
wide range of opinions about how much slowing will occur.
- We expect growth to slow from the 3.1% (Q4/Q4) but to
remain above the economy’s potential growth rate (around 1 ¾%), leading to further tightening of labor markets and some gradual increase in the underlying inflation rate.
1
SLIDE 3
1 2 3 4 5 6
1 2 3 4 5 6 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Growth of Real GDP
Four Quarter Percent Change Four Quarter Percent Change
Source: Bureau of Economic Analysis Note: Shading shows NBER recessions.
2
SLIDE 4
56 58 60 62 64 66 68 2 4 6 8 10 12 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Labor Market Indicators
Percent Percent
Note: Shading shows NBER recessions.
Unemployment Rate (Left Axis) Labor Force Participation Rate (Right Axis) Employment to Population Ratio (Right Axis)
Source: Bureau of Labor Statistics via Haver Analytics
3
SLIDE 5
1 1.5 2 2.5 3 3 4 5 6 7 8 9 10
1 1.5 2 2.5 3 Source: Bureau of Labor Statistics
Civilian Unemployment Rate: 16 yr + (SA, %)
Employment Cost Index and the Unemployment Rate
% Change, Year to Year % Change, Year to Year
ECI: Wages & Salaries for Private Industry Workers (SA)
Note: Data reported quarterly from Q1-2009 to Q4-2018
4
SLIDE 6
1 2 3 4 5
1 2 3 4 5 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 12 Month % Change 12 Month % Change
Source: Bureau of Economic Analysis via Haver Analytics Note: Shading shows NBER recessions.
Core PCE Core PCE: Goods FOMC Objective for Headline PCE Inflation
Measure of Underlying PCE Price Inflation
5
Core PCE: Services
SLIDE 7
1 1.5 2 2.5 3 3.5 4 4.5 5 6 6.5 7 7.5 8 8.5 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
S&P 500 and 10Yr BB+ ̶ 10Yr AAA Industrial Bonds Spread
Log Index, 1941-43=10
Source: Wall Street Journal and Standard & Poor’s Global Fixed Income Research via Haver Analytics.
S&P 500 (Left Axis) Yield Spread (Right Axis) Percentage Points
6
SLIDE 8
20 40 60 80 100 120 0.5 1 1.5 2 2.5 3 3.5 2014 2015 2016 2017 2018 2019
Spot Prices for Copper and Crude Oil
Dollar per Pound
Source: Wall Street Journal and EIA/Chicago Mercantile Exchange via Haver Analytics.
Copper (Left Axis) Crude Oil (Right Axis) Dollar Per Barrel
7
SLIDE 9
2 4 6 8 10 12 14
2 4 6 8 10 12 14 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Real Consumer Spending and the Personal Saving Rate
12 Month % Change %
Source: Bureau of Economic Analysis, Federal Reserve Board via Haver Analytics Note: Shading shows NBER recessions.
Real Personal Consumption Expenditures Personal Saving Rate
8
SLIDE 10
20 40 60 80 100 120 140 160 180 20 40 60 80 100 120 140 160 180 2010 2012 2014 2016 2018
Consumer Confidence and Expectations
Index, 1985=100
Source: The Conference Board via Haver Analytics.
Consumer Confidence (Left Axis) Consumer Expectations (Right Axis) Index, 1985=100
9
SLIDE 11 0.2 0.4 0.6 0.8 1 1.2 1.4 0.2 0.4 0.6 0.8 1 1.2 1.4 1980 1990 2000 2010
Household Liabilities over Disposable Income
Ratio
Source: Federal Reserve Board and Bureau
- f Economic Analysis via Haver Analytics.
10 Note: Shading shows NBER recessions.
Ratio
SLIDE 12 2 4 6 8 10 12 2 4 6 8 10 12 Student Loan
Transition into Serious Delinquency (90+) by Loan Type
Source: New York Fed Consumer Credit Panel/Equifax Note: 4 Quarter Moving Sum Student loan data are not reported prior to 2004 due to uneven reporting
Credit Card Mortgage Auto Loan HE Revolving Percent of Balance Percent of Balance
11
SLIDE 13 500 550 600 650 700 750 800 500 550 600 650 700 750 800
Credit Score at Origination: Auto Loans*
Score
Source: New York Fed Consumer Credit Panel/Equifax * Credit Score is Equifax Riskscore 3.0
50th percentile 25th percentile 10th percentile Score
12
SLIDE 14
200 300 400 500 600 700 3.2 3.6 4 4.4 4.8 5.2 2012 2014 2016 2018
Mortgage Rates and New Single-Family Home Sales
%
Source: Mortgage Bankers Association, US Census Bureau via Haver Analytics
3MMA SAAR, Thous. FRM 30-Year Interest Rate (Left Axis) New Single-Family Houses Sold (Right Axis)
13
SLIDE 15 US NE MW S W
0.0%
Up to $200K 2.3%
N/A
5.8%
$200K to $300K
18.5% 1.1%
$300K to $500K
7.7% 24.4%
Over $500K
- 20.6%
- 13.8%
- 11.1%
- 2.4%
- 23.9%
US NE MW S W 10.3% 19.2% 14.8% 6.3% 15.1% Up to $200K
N/A
12.4% $200K to $300K 11.7%
17.2% 15.2% 12.4% $300K to $500K 9.8% 19.2% 14.8% 3.8% 18.0% Over $500K 25.6% 19.2% 167.9% 31.4% 12.4% US NE MW S W
14.6%
Up to $200K
12.6%
5.4%
$200K to $300K
10.6%
$300K to $500K 10.1%
46.8% 38.3%
Over $500K 20.1% 12.6% 95.7% 38.3% 16.2% Price Range 2017Q4 to 2018Q3 2016Q2 to 2017Q1 2013Q1 to 2013Q4
Percent Change in New Home Sales by Region and Price Range
Total Total Total Price Range Price Range
14
SLIDE 16 50th percentile 25th percentile 10th percentile 500 550 600 650 700 750 800 500 550 600 650 700 750 800
Credit Score at Origination: Mortgages*
Score Score
Source: New York Fed Consumer Credit Panel/Equifax * Credit Score is Equifax Riskscore 3.0; mortgages include first-liens only.
15
SLIDE 17
5 10 15
5 10 15 2007 2009 2011 2013 2015 2017
Business Fixed Investment
Four Quarter Percent Change Four Quarter Percent Change
Source: Bureau of Economic Analysis Note: Shading shows NBER recessions.
16
SLIDE 18
50000 55000 60000 65000 70000 75000 50000 55000 60000 65000 70000 75000 2010 2012 2014 2016 2018
Nondefense Capital Goods ex. Aircraft
3MMA
Source: Census Bureau via Haver Analytics.
New Orders (Left Axis) Shipments (Right Axis) 3MMA
17
SLIDE 19
2 4 6 8 10
2 4 6 8 10 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 4 Quarter % Change 4 Quarter % Change
Source: Bureau of Economic Analysis via Haver Analytics Note: Shading shows NBER recessions.
Federal State and Local
Real Government Consumption and Gross Investment
18
SLIDE 20
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Real Net Exports as a % of GDP
Percent
Source: BEA; Haver Analytics. Note: Shading shows NBER recessions.
Percent
19
