Transcript FEA Econ Presentation Jan 2014

The 2014 Economy:
Back to the Future
(or maybe back to the early 90’s)
R. Christopher Jones, Ph.D.
What did 2013 offer us (the U.S.)?
 An economy that is still growing..
 Recession technically over June 2009
16 out of 17 quarters with positive real GDP
growth since Q3 2009
Unemployment at lowest point in 5 years (7%)
Retail sales growth relatively solid
Growth in industrial production and capacity
utilization
Interest rates still low, and we have avoided
inflation
29.2% growth in S&P 500
2
What else did it bring?
 Not all the news was great..
We created 1.08 million jobs in 2013
 Fewest net jobs created since 2010
Increasing Federal debt and expansive
monetary policy continue to spark fears of
inflation
International debt crisis still threatens monetary
and economic stability
Marginal growth in housing starts
3
What about Florida?
 Growth has returned, but not “2000’s style”
growth
Best job growth in since 2005 (159k)
Unemployment dropped 1.6 percent in 2013, to
lowest rate in 5 ½ years (6.2 percent)
Housing starts are increasing (34% growth in
2013)
Home values beginning to move upward
All major regional markets seem to have
awakened from the economic coma
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Q3 13
Q3 10
Q3 07
Q3 04
Q3 01
Q3 98
Q3 95
Q3 92
Q3 89
Q3 86
Q3 83
Q3 80
Q3 77
Q3 74
Q3 71
Q3 68
Q3 65
Q3 62
Q3 59
Q3 56
Q3 53
$16,000
$15,000
$14,000
$13,000
$12,000
$11,000
$10,000
$9,000
$8,000
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
Q3 50
Billions
U.S. Real GDP
1950-2013 (Chained 2009 Dollars)
5
-15.0%
Q3 13
Q3 10
Q3 07
Q3 04
Q3 01
Q3 98
Q3 95
Q3 92
Q3 89
Q3 86
Q3 83
Q3 80
Q3 77
Q3 74
Q3 71
Q3 68
Q3 65
Q3 62
Q3 59
Q3 56
Q3 53
Q3 50
U.S. Real GDP Annualized % Growth
1950-2013
20.0%
15.0%
10.0%
5.0%
0.0%
-5.0%
-10.0%
6
U.S. Unemployment Rate
1959-2013
7
U.S. Housing Starts (SAAR)
1960-2013
8
Real Retail & Food Svcs. Sales
1992-2013
9
Inflation (CPI-U)
1970-2013
10
Sep-11
Jul-13
May-04
Mar-06
Jan-08
Nov-09
Jan-97
Nov-98
Sep-00
Jul-02
Jul-91
May-93
Mar-95
Mar-84
Jan-86
Nov-87
Sep-89
Sep-78
Jul-80
May-82
May-71
Mar-73
Jan-75
Nov-76
Jan-64
Nov-65
Sep-67
Jul-69
May-60
Mar-62
Real Per Capita Disposable
Personal Income 1960-2013
$38,000
$36,000
$34,000
$32,000
$30,000
$28,000
$26,000
$24,000
$22,000
$20,000
$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
11
Credit Market Debt Per Capita
1961-2013 (infl. adj.)
12
Consumer Sentiment
1980-2013
13
Federal Debt
1971-2013
14
2014 U.S. Forecast
 Growth continues, real GDP will grow by 3% 3.25%
 Modest job growth continues, unemployment
finish out the year around 5.3% - 5.5%
 Stock markets grow by 7% - 10%
 Inflation concerns still can’t be ignored, nor can
the international debt crisis
 Is there a “boom” period ahead in the short
run?
 Not likely – but probably no collapse, either
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Florida: The Facts
 Florida has added 623,100 jobs since July 2010
 Represents 11.9 percent of all U.S. jobs created during
this period
 The net job gains (623.1k) represent two-thirds of the
job losses experienced during the recession (930,800)
 Dec. 2012 – Nov. 2013: Gained 159,400 jobs
 6.2% unemployment (Nov. 2013)
 52,081 housing starts first 11 mos. of 2013, compared
to 38,758 in 2012 and 29,324 in 2011
 Home prices have increased by 8.4 percent in the past
year
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Florida Real GDP
(millions of chained 2005 dollars)
1997-2012
17
Florida Employment (000s)
1990-2013
18
Florida Unemployment Rate
1982-2013
19
Florida Housing Starts
1988-2013
20
Florida Home Price Index
(Q1 1980 = 100)
1988-2013
21
Florida Home Ownership Rate
1984-2012
22
Leading Index for Florida
1988-2013
23
FL Employment By Region
1990-2013 (000s)
24
FL Unemployment Rate by Region
1990-2013
25
FL Housing Starts By Region
1990-2013
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FL Consumer Distress Index
by Region (Financial Distress < 70)
2005-2013
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What’s in Store for Florida?
 More job growth, lower unemployment
But the growth will be modest
Florida’s economic picture today looks a lot like the
early 1990’s
 Are we ever going to see a full recovery of the
housing sector?
Depends on how you define “full recovery”
If you use 2000’s criteria, no
 All areas are moving forward again
SE Florida will create the most jobs (most diverse
economy)
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