Transcript (PPS, 2.3MB)

National Economic Indicators
Ray Owens
October 14, 2015
Real Gross Domestic Product
6
Percent change from previous quarter at annual rate
6
Q2
3.9%
5
5
4
FOMC Projection
4
3
3
2
2
1
1
0
0
-1
-1
-2
-2
-3
-3
-4
-4
-5
-5
-6
-6
-7
-7
-8
-8
-9
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
-9
Note: Projection is the median, central tendency, and range from the September 2015 Summary of Economic
Projections. Red dots indicate median projections. Projections of change in real gross domestic product (GDP)
are from the fourth quarter of the previous year to the fourth quarter of the year indicated.
Source: Bureau of Economic Analysis via Haver Analytics & Federal Reserve Board
2
Decomposition of Real GDP: Productivity
10-year annual growth rates
5
5
4.5
4.5
4
4
3.5
3.5
3
3
2.5
2.5
2
2
1.5
1.5
1
1
0.5
0.5
0
0
1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
Note: Productivity is calculated as real GDP per employee, from the Household Survey.
Source: Bureau of Economic Analysis via Haver Analytics 3
Decomposition of Real GDP: HH Employment
10-year annual growth rates
5
5
4.5
4.5
4
4
3.5
3.5
3
3
2.5
2.5
2
2
1.5
1.5
1
1
0.5
0.5
0
0
1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
Source: Bureau of Economic Analysis via Haver Analytics 4
Decomposition of Real GDP
10-year annual growth rates
5
5
4.5
4
4.5
4
HH Employment
3.5
3.5
3
3
2.5
2.5
2
Productivity
1.5
2
1.5
1
1
0.5
0.5
0
0
1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
Note: Productivity is calculated as real GDP per employee, from the Household Survey.
Source: Bureau of Economic Analysis via Haver Analytics 5
Nonfarm Payroll Employment
144
Millions of Persons
144
September
142.4 mil.
142
142
140
140
138
138
136
136
134
134
132
132
130
130
128
2007
2008
2009
2010
2011
2012
2013
2014
2015
128
2016
Source: Bureau of Labor Statistics via Haver Analytics
6
Nonfarm Payroll Employment
400
Quarterly average of monthly changes, thousands of persons
400
300
300
Q3 Avg.
200
200
100
100
0
0
-100
-100
-200
-200
-300
-300
Monthly Change
Sep.
142
Aug.
136
Jul.
223
Jun.
245
May.
260
-400
-500
-600
-400
-500
-600
-700
-700
-800
-800
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Bureau of Labor Statistics via Haver Analytics
7
Unemployment Rate
11
Percent
11
10.5
10.5
10
10
9.5
9.5
9
9
8.5
8.5
8
8
7.5
7.5
7
7
6.5
6.5
6
September
5.1%
5.5
6
FOMC Projection
5.5
5
5
4.5
4
2008
4.5
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
4
2020
Notes: FOMC projection is the median, range, and central tendency for the Q4 levels, from the September 2015
meeting. Red dots indicate median projections
Source: Bureau of Labor Statistics & Board of Governors via Haver Analytics
8
Measures of Labor Utilization
19
Percent
19
17
17
15
15
13
13
U6: U5 + Involuntarily Part-Time
11
11
September
9
9
U5: U3 + Discouraged + Marginally Attached
7
7
5
5
U3: Official Unemployment Rate
3
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
3
2016
Source: Bureau of Labor Statistics via Haver Analytics
9
Labor Force Participation
68
Percent of Population
68
67
67
66
66
65
65
64
64
63
63
62
September
62
61
61
60
60
59
59
58
58
57
57
1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
Source: Bureau of Labor Statistics via Haver Analytics
10
Labor Productivity, Nonfarm Business
6
Year over Year % Change
Quarterly Change
at Annual Rate
Q2 15
3.3%
Q1 15
-1.1%
Q4 14
-2.2%
Q3 14
3.1%
5
6
5
4
4
3
3
Post-War Average
2
2
1
1
0
0
Q2
0.6%
-1
-2
2007
2008
2009
2010
2011
2012
2013
2014
2015
-1
-2
2016
Source: Bureau of Labor Statistics via Haver Analytics
11
Average Hourly Earnings
4
12 Month % Change
4
Monthly % Change
Sep.
0.0%
Aug.
0.4%
Jul.
0.2%
Jun.
0.0%
3.5
3
3
2.5
September
2.20%
2
2.5
2
1.5
1
2007
3.5
1.5
2008
2009
2010
2011
2012
2013
2014
2015
1
2016
Source: Bureau of Labor Statistics via Haver Analytics
12
Household Net Worth
700
Percent of disposable personal income
700
Q2.
650
650
600
600
550
550
500
500
450
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
450
2016
Source: Z.1 Financial Accounts of the United States via Haver Analytics 13
Disposable Personal Income & Expenditures
6
12 Month % Change
6
5
5
4
4
Real Disposable Personal
Income
3
3
2
August
2
1
1
0
0
-1
-1
-2
-3
-4
2007
-2
Month over Month % Change
Income
Expenditures
Real Personal
Consumption Expenditure
2008
2009
2010
2011
2012
2013
June
0.2
0.1
2014
July
0.4
0.3
August
0.3
0.4
2015
-3
-4
2016
Note: Real disposable personal Income was adjusted to remove tax-induced income shifting near end of 2012.
Source: Bureau of Economic Analysis via Haver Analytics 14
New Single-Family Home Sales
1.4
Millions of Homes
1.4
1.3
1.3
1.2
1.2
1.1
1.1
1.0
1.0
0.9
0.9
0.8
0.8
0.7
0.6
Average Annual New Home Sales:1990 through 1999
0.7
August
0.55 mil.
0.6
0.5
0.5
0.4
0.4
0.3
0.3
0.2
0.2
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: Census Bureau via Haver Analytics 15
Real Investment in Equipment
40
Percent change from previous quarter at annual rate
40
30
30
20
20
10
10
Q2
0.3%
0
0
-10
-10
-20
-20
-30
-30
-40
-40
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Bureau of Economic Analysis via Haver Analytics 16
Real Investment in Intellectual Property
12
Percent change from previous quarter at annual rate
12
10
10
Q2
8.6%
8
8
6
6
4
4
2
2
0
0
-2
-2
-4
-4
-6
-6
-8
-8
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Bureau of Economic Analysis via Haver Analytics 17
Industrial Production
140
2007 = 100
140
135
135
130
130
Mining
125
125
120
120
115
115
Overall
110
August
110
105
105
100
100
Manufacturing
95
95
90
90
85
85
80
80
75
2007
2008
2009
2010
2011
2012
2013
2014
2015
75
2016
Source: Board of Governors via Haver Analytics 18
Exchange Value of the USD
135
Index, March 1973 = 100
135
125
125
115
115
105
105
September
95
95
85
85
75
1980
1984
1988
1992
1996
2000
2004
2008
2012
75
2016
Notes: Measured as the real broad trade-weighted exchange value of the United States Dollar.
Source: Board of Governors via Haver Analytics 19
Balance of International Trade
0
Current $, Billions
0
Petroleum Balance
-10
-10
-20
-20
-30
-30
Non-Petroleum
Balance
-40
-40
-50
-50
Trade Balance
-60
-60
August
-48.3 Bil.
-70
-70
-80
-80
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Note: Customs Value of Trade Balance
Source: Census Bureau via Haver Analytics 20
Personal Consumption Expenditure Price Index
5
12 Month % Change
5
4.5
4.5
4
4
3.5
3.5
3
FOMC Projection
2.5
2.5
2% Longer-run Target
2
2
1.5
1.5
1
1
0.5
0.5
August
0.3%
0
0
-0.5
-0.5
-1
-1.5
2008
3
-1
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
-1.5
2019
Notes: FOMC projection is the median, range, and central tendency for Q4/Q4 percent changes, from the September
2015 meeting. Red dots indicate median projections.
Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 21
Core Personal Consumption Expenditure Price Index
5
12 Month % Change
5
4.5
4.5
4
4
3.5
3.5
3
3
FOMC Projection
2.5
2% Longer-run Target
2
2
1.5
1.5
1
1
August
1.3%
0.5
0.5
0
0
-0.5
-0.5
-1
-1.5
2008
2.5
-1
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
-1.5
2019
Notes: FOMC projection is the median, range, and central tendency for Q4/Q4 percent changes, from the September
2015 meeting. Red dots indicate median projections. Core PCE Price Index excludes expenditures on gasoline and
food services.
Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics 22
TIPS Inflation Compensation
4
Percent
3.5
4
3.5
5-Year
5 Years Ahead
3
3
2.5
2.5
2
1.5
2
1.5
5-Year
1
1
October 2nd
0.5
0.5
0
0
-0.5
-0.5
-1
-1.5
2009
-1
2010
2011
2012
2013
2014
2015
-1.5
2016
Source: Board of Governors Research Series via Haver Analytics 23
Monetary Policy Instruments
7.0
Percent
7.0
6.5
6.5
6.0
6.0
5.5
5.5
5.0
5.0
4.5
4.5
4.0
4.0
3.5
3.5
3.0
Federal Funds Target Rate
3.0
2.5
2.5
2.0
2.0
1.5
1.5
Primary Credit Rate
1.0
0.5
0.0
2005
October 9th
Interest Rate Paid on
Reserves
Federal Funds Rate
Target Range
2006
2007
2008
1.0
0.5
2009
2010
2011
2012
2013
2014
2015
0.0
2016
Source: Board of Governors via Haver Analytics
24
FOMC Statement
September 17, 2015
Information received since the Federal Open Market Committee met in July suggests that economic activity is expanding at a moderate pace.
Household spending and business fixed investment have been increasing moderately, and the housing sector has improved further; however,
net exports have been soft. The labor market continued to improve, with solid job gains and declining unemployment. On balance, labor
market indicators show that underutilization of labor resources has diminished since early this year. Inflation has continued to run below the
Committee's longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports. Market-based measures of
inflation compensation moved lower; survey-based measures of longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Recent global economic and
financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term.
Nonetheless, the Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with
labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate. The Committee continues to
see the risks to the outlook for economic activity and the labor market as nearly balanced but is monitoring developments abroad. Inflation is
anticipated to remain near its recent low level in the near term but the Committee expects inflation to rise gradually toward 2 percent over the
medium term as the labor market improves further and the transitory effects of declines in energy and import prices dissipate. The Committee
continues to monitor inflation developments closely.
To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to
1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee
will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will
take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation
expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the
target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that
inflation will move back to its 2 percent objective over the medium term.
Source: Board of Governors
25
Continued…
The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and
agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities
at auction. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help
maintain accommodative financial conditions.
When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its
longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after
employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the
target federal funds rate below levels the Committee views as normal in the longer run.
Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael
Brainard; Charles L. Evans; Stanley Fischer; Dennis P. Lockhart; Jerome H. Powell; Daniel K. Tarullo; and John C.
Williams. Voting against the action was Jeffrey M. Lacker, who preferred to raise the target range for the federal funds rate
by 25 basis points at this meeting.
September 17, 2015
Source: Board of Governors
26
Eurodollar Futures
Percent
3.5
3.5
September 15, 2015
3
3
2.5
2.5
October 13, 2015
2
1.5
1.5
1
1
0.5
0
2015
2
0.5
2016
2017
2018
2019
2020
2021
0
2022
Source: CME Group via Bloomberg 27
Summary of Economic Projections: Federal Funds Rate
5
Percent
5
4
4
3
3
2
2
1
1
0
0
-1
2015
2016
2017
2018
-1
Longer run
Note: Each dot in the chart represents the value of an FOMC participant’s judgment of the midpoint of the appropriate
target range (or the appropriate target level) for the federal funds rate at the end of the calendar year.
Projections made for the September 2015 meeting.
28
Source: Board of Governors
Treasury Yield Curve
3.5
Percent
3.5
3.25
3.25
3
3
2.75
2.75
September 15, 2015
2.5
October 9, 2015
2.5
2.25
2.25
2
2
1.75
1.75
1.5
1.5
1.25
1.25
1
1
0.75
0.75
0.5
0.5
0.25
0.25
0
0
6M
2 Yrs 3 Yrs
5 Yrs
7 Yrs
10 Yrs
Time to Maturity
Source: Board of Governors via Haver Analytics
29