The Economic Outlook Mississippi University Research Center - - PowerPoint PPT Presentation

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The Economic Outlook Mississippi University Research Center - - PowerPoint PPT Presentation

Sep 17, 2022 103 likes •303 views

The Economic Outlook Mississippi University Research Center Mississippi Institutions of Higher Learning Darrin Webb, State Economist dwebb@mississippi.edu (601) 432-6556 To subscribe to our publications, email Janna Weller at

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The Economic Outlook

Mississippi University Research Center Mississippi Institutions of Higher Learning Darrin Webb, State Economist

dwebb@mississippi.edu (601) 432-6556

To subscribe to our publications, email Janna Weller at jweller@mississippi.edu Visit our website for state and county level economic data www.mississippi.edu/urc Follow URC on Twitter @MississippiURC

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Consumer and Business Confidence

50 60 70 80 90 100 110

Consumer Sentiment

Sentiment Low from Great Recession 55.8 70 75 80 85 90 95 100 105 110 115

National Federation of Independent Businesses (NFIB) Optimism Index

Optimism Low from Great Recession 81.0 URC May 2020 2

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US Real GDP: Annualized Quarterly Growth

3.1% 2.0% 2.1% 2.1%

  • 4.8%
  • 36.5%

6.1% 9.4% 12.2% 9.4% 5.8% 3.9% 3.8% 4.4% 4.6% 4.2%

  • 40%
  • 30%
  • 20%
  • 10%

0% 10% 20% 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4 URC May 2020 3

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US Real GDP

$15,500 $16,000 $16,500 $17,000 $17,500 $18,000 $18,500 $19,000 $19,500 $20,000 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4

Billions of Chained 2012 Dollars

URC May 2020 4

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Comparing Recessions, , 2008 vs. . 2020

Quarterly ly Real l GDP In Indexed to La Last Quarter of f Growth

82 84 86 88 90 92 94 96 98 100 102

Q -2 Q -1 Q 0 Q +1 Q +2 Q +3 Q +4 Q +5 Q +6 Q +7 Q +8 Q +9 Q +10

"Great Recession" COVID19 Recession

Q-0 is last quarter of growth before recession

URC May 2020 5

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US Real GDP: Annual Growth

  • 12.9%
  • 11.6%
  • 2.5%
  • 7.3%
  • 15%
  • 10%
  • 5%

0% 5% 10% 15% 20% 25% 1931 1933 1935 1937 1939 1941 1943 1945 1947 1949 1951 1953 1955 1957 1959 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 URC May 2020 6

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Monthly Change in Non-farm Employment

  • 881,000
  • 1,000,000
  • 800,000
  • 600,000
  • 400,000
  • 200,000

200,000 400,000 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 URC May 2020 7

The # of jobs fell by over 20 million in April

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Employment: Annualized Quarterly Growth

1.3% 1.1% 1.5% 1.7% 0.8%

  • 55.3%
  • 9.8%

12.4% 19.3% 15.4% 10.2% 7.1% 6.1% 6.2% 6.0% 5.2%

  • 60%
  • 50%
  • 40%
  • 30%
  • 20%
  • 10%

0% 10% 20% 30% 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4 URC May 2020 8

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Unemployment Rate

3.9% 3.6% 3.6% 3.5% 3.8% 18.1% 19.6% 18.2% 15.8% 13.8% 12.6% 11.7% 10.8% 9.9% 9.0% 8.2%

0% 5% 10% 15% 20% 25% 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4 URC May 2020 9

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Brent Oil Spot Price Per Barrel

$63.38 $20.06

$0 $20 $40 $60 $80 $100 $120 $140

2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 2012Q3 2013Q1 2013Q3 2014Q1 2014Q3 2015Q1 2015Q3 2016Q1 2016Q3 2017Q1 2017Q3 2018Q1 2018Q3 2019Q1 2019Q3 2020Q1 2020Q3 2021Q1 2021Q3 2022Q1 2022Q3 2023Q1 2023Q3 2024Q1 2024Q3

URC May 2020 10

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MS Real GDP: Annualized Quarterly Growth

1.0% 2.3% 1.8% 2.1%

  • 5.3%
  • 43.6%

5.0% 9.0% 8.3% 6.7% 3.7% 2.2% 2.0% 2.2% 2.6% 2.7%

  • 50%
  • 40%
  • 30%
  • 20%
  • 10%

0% 10% 20% 2019Q1 2019Q2 2019Q3 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4 URC May 2020 11

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MS Real GDP

$90,000 $92,000 $94,000 $96,000 $98,000 $100,000 $102,000 $104,000 $106,000 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4

Millions of Chained 2012 Dollars

URC May 2020 12

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Historical GDP in MS

20000 40000 60000 80000 100000 120000

Millions of Chained 2012 Dollars

URC May 2020 13

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Historical Annual Growth of MS Real GDP

  • 4.7%
  • 7.6%
  • 10.0%
  • 8.0%
  • 6.0%
  • 4.0%
  • 2.0%

0.0% 2.0% 4.0% 6.0% 8.0% URC May 2020 14

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MS Nonfarm Employment

200 400 600 800 1,000 1,200 1,400 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 2022Q3 2022Q4

Thousands of Jobs

URC May 2020 15

Preliminary Data show a decline of 117 thousand jobs in April

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Weekly Unemployment Claims in 2020

50,000 100,000 150,000 200,000 250,000

  • 5,000

10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000

Continued Claims Initial Claims

Initial Claims Continued Claims URC May 2020 16

Highest Initial Claims from “Great Recession” was 9,420 Highest Continued Claims from “Great Recession was 49,935

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MS Unemployment Rate

5.6% 5.4% 18.7% 19.8% 18.7% 16.9% 15.4% 14.3% 13.5% 12.7% 11.6% $0 $0 $0 $0 $0 $0 2019Q4 2020Q1 2020Q2 2020Q3 2020Q4 2021Q1 2021Q2 2021Q3 2021Q4 2022Q1 2022Q2 URC May 2020 17

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MS General Fund

with Current URC Projections

$5,131.8 $5,598.4 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021

Millions

URC May 2020 18

FY 2020 Estimate represents a decline of $864.4 Million below November Estimate. FY 2021 Estimate represents a decline of $367.1 Million below November Estimate. These estimates reflect a shift of $436 million from FY 2020 to FY 2021 due to change in filing dates.

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Final Comments

  • Income supported by unprecedented federal transfer payments

(stimulus and additional unemployment claims)

  • Projections always include assumptions about unknowns

Current level of unknowns are elevated Assumptions for current situation can change dramatically with new information Useful revenue data is limited – April Revenue report reveals very little

  • Expect basic story to remain the same – Short Recession, Long Recovery
  • deepest hit in 2020Q2
  • conditions begin to improve in Q3 as economy restarts; a relative short recession
  • Recovery continues into Q4 and through 2021-22
  • Depth of recession means prolonged period before full recovery
  • MS follows similar pattern but is slower to fully recover; possibly 2023

URC May 2020 19