Rupert Report Peter Rupert Professor Department of Economics, UCSB - PowerPoint PPT Presentation

Rupert Report Peter Rupert Professor Department of Economics, UCSB Director, UCSB Economic Forecast Project Economic Update January 26, 2017 www.efp.ucsb.edu/talk

economics and the election

what to expect uncertainty

what to expect uncertainty Dodd-Frank

what to expect uncertainty Dodd-Frank international trade

what to expect uncertainty Dodd-Frank international trade taxes and spending

what to expect uncertainty Dodd-Frank international trade taxes and spending Obamacare

what to expect uncertainty Dodd-Frank international trade taxes and spending Obamacare oil/energy

what to expect uncertainty Dodd-Frank international trade taxes and spending Obamacare oil/energy immigration

what to expect uncertainty Dodd-Frank international trade taxes and spending Obamacare oil/energy immigration ugh, I need a lot more slides! but...

Real GDP Logged Billions of 2009$, Seasonally Adjusted 10.0 9.5 9.0 8.5 8.0 7.5 7.0 Linear Trend 1929 1940 1950 1960 1970 1980 1990 2000 2010

so far... some positive signs stock market gdp FOMC a bit more upbeat

Dow Jones Industrial Index (000’s) 20 18 16 14 12 10 8 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016

Dow Jones Industrial Index (000’s) 20 Election 19 18 17 16 Jan 01 Mar 01 May 02 Jul 01 Sep 01 Nov 01 Jan 02 2016 2016 2016 2016 2016 2016 2017

Dow Jones Industrial Index (000’s) 20 My Birthday 19 18 17 16 Jan 01 Mar 01 May 02 Jul 01 Sep 01 Nov 01 Jan 02 2016 2016 2016 2016 2016 2016 2017

Real GDP 6 quarterly change at an annual rate year−over−year change 5% 4% 4% 4 3.5% 3.1% 2.8% 2.6% 2.3% Percent 2% 2% 2 1.4% 0.9% 0.8% 0.8% 0 −1.2% −2 2013 2014 2015 2016 Econsnapshot.com Source: BEA

what’s up with our friends at the Fed? increases this year?

housing and financial aspects home price growth has moderated mortgage crisis has abated foreclosures back to “normal” yet, foreclosure timelines not!

Zillow Home Value Index Index (100 = Pre−Recession Max Value) 120 100 80 60 40 Santa Barbara[ $1,064,100] Carpinteria[ $788,600] Montecito[ $3,048,500] Goleta[ $786,800] Santa Maria[ $352,500] 20 Lompoc[ $307,000] Guadalupe[ $266,900] 2000 2002 2004 2006 2008 2010 2012 2014 2016

Zillow Home Value Index YoY Growth Rate (%) 40 Santa Barbara[6%] Carpinteria[0%] Montecito[7%] Goleta[3%] Santa Maria[8%] Lompoc[10%] Guadalupe[12%] 20 0 −20 −40 2001−Feb 2004−Feb 2007−Feb 2010−Feb 2013−Feb 2016−Feb

Ratio of HH Liabilities to HH Net Worth Percent (%) 26 24 22 20 18 16 Q1 1995 Q1 1998 Q1 2001 Q1 2004 Q1 2007 Q1 2010 Q1 2013 Q4 2015 www.efp.ucsb.edu Source: Board of Governors, Flow of Funds

Homes foreclosed per month, by MSA Number of homes per 10,000 60 Riverside, CA Sacramento, CA San Diego, CA 50 Los Angeles, CA San Francisco, CA California 40 30 20 10 0 2000 2002 2004 2006 2008 2010 2012 2014 2016

Percent of Home with Negative Equity 0.40 Santa Barbara California 0.35 United States 0.30 0.25 0.20 0.15 0.10 2011−Q2 2012−Q1 2012−Q4 2013−Q3 2014−Q2 2015−Q1 2015−Q4 2016−Q3

10 % 12 % 14 % 0 % 2 % 4 % 6 % 8 % Percent of Homes with Negative Equity Santa Barbara County Santa Maria Santa Barbara City Lompoc Goleta Carpinteria Solvang Guadalupe Buellton

Negative Equity Loan−to−Value: 2016Q3 100 % 80 % 60 % 40 % 20 % 0 % Santa Barbara County Santa Maria Santa Barbara City Lompoc Goleta Carpinteria Solvang Guadalupe Buellton 100−120% 120−140% 140−160% 160−180% 180−200% >200%

income and wages

Gini Coefficient Real per capita personal income across counties 0.18 US California 0.16 0.14 0.12 0.10 0.08 1969 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014

new findings on inequality most of the inequality is “between firms” not “within firms”

labor markets

wages wage growth picking up in the US but not evenly across the state

Inflation and Average Hourly Earnings Percent change from a year ago, all private workers CPI AHE 4 2 0 −2 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016

Real Mean Wage Growth 2015 − 2016 [−1%, 0%] (0%, 1%] (1%, 2%] (2%, 3%] (3%, 6%] Source: CA EDD

employment employment growth strong but varies by industry and geography unemployment as well

Total Nonfarm Payrolls, Seasonally Adjusted Index (Dec 2007 = 100) Santa Barbara County [ 175,120 ] California [ 15,476,015 ] United States [ 138,434,120 ] 105 100 95 2000 2002 2004 2006 2008 2010 2012 2014 2016 Notes: December 2007 level in brackets. www.efp.ucsb.edu Source: BLS & CA EDD

Total Civilian Employment, Seasonally Adjusted Index (Jan 2010 = 100) Buellton [ 3,127 ] 115 Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc [ 17,601 ] Santa Barbara City [ 51,151 ] Santa Maria [ 46,649 ] Solvang [ 2,706 ] 110 105 100 2010 2011 2012 2013 2014 2015 2016 2016 Note: Current level in brackets. www.efp.ucsb.edu Source: BLS & CA EDD

Unemployment Rate, Seasonally Adjusted Percent (%) Buellton [ 2.9% ] Carpenteria [ 3.97% ] 12 Goleta [ 2.71% ] Guadalupe [ 4.3% ] Lompoc [ 5.95% ] Santa Barbara City [ 3.64% ] Santa Maria [ 5.53% ] 10 Solvang [ 5.63% ] 8 6 4 2010 2011 2012 2013 2014 2015 2016 2016 Note: Most recent rate in brackets. www.efp.ucsb.edu Source: BLS & CA EDD

December 2016 Employment by Industry Santa Barbara County Leisure & Hospitality Dec 2015 − Dec 2016 Growth Rate (%) 7.5 Trans., Ware. & Util. 5.0 Information Goods Producing Educ. & Health Services 2.5 Government Wholesale Trade Financial Activities Other Services Retail Trade 19.2 14.2 13 11 10.6 10.2 3.1 2.5 1.7 0.0 9.5 2.8 2.1 Prof. & Bus. Services Total Farm −2.5 0 25 50 75 100 Percent of Total Employment

final thoughts policy uncertainty strong growth in the US FOMC forecast: 3 25bp increases in 2017?

Real GDP Logged Billions of 2009$, Seasonally Adjusted 10.0 9.5 9.0 8.5 8.0 7.5 7.0 Linear Trend 1929 1940 1950 1960 1970 1980 1990 2000 2010

thank you!