National Economic Outlook Alan Gin Associate Professor of Economics - - PowerPoint PPT Presentation

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Oct 11, 2022 224 likes •412 views

National Economic Outlook Alan Gin Associate Professor of Economics School of Business Administration U.S GDP Growth Rate 2000 Present 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 % Change 0.0 1.0 2.0 3.0 4.0 5.0 6.0

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National Economic Outlook

Alan Gin Associate Professor of Economics School of Business Administration

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‐9.0 ‐8.0 ‐7.0 ‐6.0 ‐5.0 ‐4.0 ‐3.0 ‐2.0 ‐1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 % Change

U.S GDP Growth Rate

2000 ‐ Present

Source: Bureau of Economic Analysis, University of San Diego

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‐0.50 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 GDP Consumption Investment Net Exports Government Expenditures

Contributions to % Change in Real GDP

1947 ‐ Great Recession Recovery

Source: Bureau of Economic Analysis, University of San Diego

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‐900 ‐800 ‐700 ‐600 ‐500 ‐400 ‐300 ‐200 ‐100 100 200 300 400 500 600 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Thousands

Change in Employment

National Economy (2005 ‐ Present)

8.7 million jobs lost in Great Recession 15.6 million jobs gained in the last 83 months

Source: Bureau of Labor Statistics, University of San Diego

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Source: Bureau of Labor Statistics, University of San Diego 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10%

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

Unemployment Rate

U.S. (2005 - present)

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Source: Bureau of Labor Statistics, University of San Diego

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 13.0 14.0 15.0 16.0 17.0 18.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Percent

Labor Underutilization

Unemployed Discouraged Workers Marginally Attached Part Time for Economic Reasons

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Source: Federal Reserve Bank of St. Louis

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Reasons for decline in labor force participation rate

 Retirement of Baby Boom generation  Less participation by students  More people leaving for disability reasons  Affordable Care Act allows some to leave work

force and still have health insurance

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Source: Federal Reserve Bank of St. Louis

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Labor Market

 Labor market finally beginning to tighten

 Operations streamlined during Great Recession, more

productivity from remaining workers

 Greater use of temporary/part-time workers

 Downward pressure on middle and lower income

workers

 Technological changes  Globalization  Decline in unionization  Reduced real value of the minimum wage

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Employment Income Consumer Spending Investment and Hiring

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Outlook

 Economy growing, but slowly

 GDP growth of 2.5 percent expected for 2017  Probability of a recession is low, but not zero

 Unemployment rate may edge up slightly  Fed likely to increase interest rates by 50 basis points

by the end of the year

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Four Big, Long-Term Issues

 Reduced employment opportunities

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Globalization

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Technology – Internet, automation

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“Gig” economy  Retirement crisis

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Low level of savings  STEM divide

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Education and skills more important than ever  Growing income inequality

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Social unrest?

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Income inequality has increased significantly since the 1980s

Source: Federal Reserve Bank of St. Louis

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Source: Mother Jones

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Source: Mother Jones

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Outlook for San Diego

 Growth in the local economy slowing

 Job growth of 30,000 expected in 2016, 25,000 in

2017

 Unemployment rate to edge up slightly  Job growth in health care, administrative and waste

services, leisure and hospitality, and construction

 Low single digit gain expected in housing prices