10 county budget conference...10 county budget conference september 14, 2017 . 2 the u.s economy...
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10 County Budget Conference
September 14, 2017
2
The U.S economy continues to expand.
Source: National Bureau of Economic Research (NBER) and Colorado Legislative Council June 2017 forecast.
0 20 40 60 80 100 120 140
December 1900 - September 1902August 1904 - May 1907
June 1908 - January 1910January 1912 - January 1913
December 1914 - August 1918March 1919 - January 1920
July 1921 - May 1923July 1924 - October 1926
November 1927 - August 1929March 1933 - May 1937
June 1938 - February 1945October 1945 - November 1948
October 1949 - July 1953May 1954 - August 1957
April 1958 - April 1960February 1961 - December 1969
November 1970 - November 1973March 1975 - January 1980
July 1980 - July 1981November 1982 - July 1990
March 1991 - March 2001November 2001 - December 2007
June 2009 - Present
Months of Economic Growth
June 2009 - Present
Post WWII Average:
61.5 Months
Forecast Period
3 Source: U.S. Bureau of Labor Statistics. Seasonally adjusted.
Colorado’s unemployment rate is historically low.
July 2017
2.4%
Unemployment Rate
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
1977 1982 1987 1992 1997 2002 2007 2012 2017
4 Source: U.S. Bureau of Labor Statistics. Seasonally adjusted.
Colorado Labor Supply and Demand
Millions of Workers
Labor Force
(Supply)
Employment
(Demand)
1.0
1.5
2.0
2.5
3.0
3.5
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
5
Nonfarm Employment Growth
Source: U.S. Bureau of Labor Statistics with Legislative Council Staff rebenchmark estimates. Seasonally adjusted.
Year-over-Year Percent Change
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
1990 1995 2000 2005 2010 2015
Colorado
United States
6
Nonfarm Employment Growth
Source: U.S. Bureau of Labor Statistics with Legislative Council Staff rebenchmark estimates. Seasonally adjusted.
Year-over-Year Percent Change
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
1990 1995 2000 2005 2010 2015
Colorado
United States
Unemployment
Rate
7 Source: Source: U.S. Bureau of Labor Statistics. Data are seasonally adjusted.
81.3%
69.2%
67.1%
56.8%
30%
40%
50%
60%
70%
80%
90%
50s 60s 70s 80s 90s 00s 10s
Aged 25 to 54
Men
Total Civilian
Women
Prime Working Age
U.S. Labor Force Participation Rate Share of the Civilian Population
8
State Unemployment Rates, July 2017
Source: Bureau of Labor Statistics. Seasonally adjusted. Map prepared by Legislative Council Staff.
50 3
9
Wage Withholding
Source: Office of the State Controller and Colorado Department of Revenue with Legislative Council Staff seasonal
adjustments. Data through May 2017.
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2006 2008 2010 2012 2014 2016
Millions in Monthly Collections
10
Manufacturing Activity Expanding
Source: Federal Reserve Board of Governors.
Industrial Production Index
Index 2012 = 100
85
90
95
100
105
110
2007 2009 2011 2013 2015 2017
11
$0.6
$0.8
$1.0
$1.2
$1.4
$1.6
$1.8
$2.0
$2.2
2007 2009 2011 2013 2015 2017
Business Income
Source: Bureau of Economic Analysis. Profits and income with inventory valuation and capital consumption adjustments.
Business Investment, Income and Profits
Trillions of Dollars
Corporate Profits
after Tax
Equipment & Intellectual Property
Investment
Proprietors' Income
12
Lending Conditions
Source: Federal Reserve Board of Governors, Senior Loan Officer Survey.
Net Percentage of Domestic Banks Tightening Standards
for Commercial and Industrial Loans
-40%
-20%
0%
20%
40%
60%
80%
100%
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Large and Middle-Market Firms Small Firms
-3.9%
-4.1%
2017Q3
13
Home Prices Index 2007=100
Source: U.S. Federal Housing Finance Agency.
80
90
100
110
120
130
140
150
160
170
2007 2009 2011 2013 2015 2017
Colorado Denver-Aurora-Lakewood Boulder Fort Collins
70
80
90
100
110
120
130
140
150
160
170
2007 2009 2011 2013 2015 2017
Grand Junction Greeley Pueblo Colorado Springs
14
Retail Trade
Sources: U.S. Census Bureau.
$350
$400
$450
$500
2007 2009 2011 2013 2015 2017
2.5% increase
year-to-date
through
July over the
same
period last year
Real U.S. Retail and Food Service Sales
Billions of 2017 Dollars
15
Retail Trade
Sources: U.S. Census Bureau advanced monthly retail trade report.
Total U.S. Retail Sales Share of Sales
Nonstore Retailers 11.0%
Gasoline Stations 7.5%
Building, Garden & Supplies Dealers 6.6%
Motor Vehicle & Parts Dealers 20.9%
Furniture & Home Furnishings Stores 2.0%
Miscellaneous Store Retailers 2.2%
Food Services & Drinking Places 11.8%
Food & Beverage Stores 12.4%
General Merchandise Stores 12.0%
Clothing & Clothing Accessory Stores 4.5%
Health & Personal Care Stores 5.8%
Electronics & Appliance Stores 1.7%
Sporting Goods & Hobby 1.5%
Change in U.S. Retail Sales, Year-to-Date through July
4.5%
11.2%
9.5%
7.0%
5.2%
4.4%
4.1%
3.8%
2.5%
1.5%
1.0%
0.6%
-0.9%
-4.1%
16
Will wages show up in prices?
Source: U.S. Bureau of Labor Statistics.
Inflation is calculated as the growth in urban area prices in a given period relative to the same period in the prior year.
*Headline inflation includes all products and services. **Core inflation excludes food and energy prices.
Denver-Boulder-Greeley CPI-U Inflation Year-over-Year Change in Prices
First Half 2017 over First Half 2016
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
7%
2007 2009 2011 2013 2015 2017
Core** 2.7%
Headline* 3.1%
2017H1
3.1%
2.7%
11.9%
2.0%
5.1%
-6.8%
4.1%
1.9%
3.5%
-2.4%
-1.6%
Headline
Core
Energy
Food
Housing
Apparel
Transportation
Medical Care
Recreation
Education
Other
Selected Components
17
Effective Federal Funds Rate
Source: Federal Reserve Board of Governors.
0%
1%
2%
3%
4%
5%
6%
2007 2009 2011 2013 2015 2017
1.16%
August 30, 2017
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
2017 2018 2019 Longer Run
June 2017 FOMC Participants Assessments of Appropriate Monetary Policy
Mid-Point of Target Range or Target Level for the Federal Funds Rate
Federal Reserve
18
Federal Reserve Balance Sheet
Source: Federal Reserve Board of Governors.
$0$50
$100$150$200$250$300$350$400$450
$0
$1
$2
$3
$4
$5
2007 2009 2011 2013 2015 2017
Trillions
Traditional Portfolio
All Other
Central Bank
Liquidity Swaps
Mortgage Backed Securities
& Federal Agency Debt
Par Value of
U.S. Treasury Notes and Bonds,
and Agency Debt
by Maturity Date
Billions
19
Forecast
Source: Colorado Legislative Council Staff, June 2017 Economic Forecast.
Legislative Council Staff Forecast
Calendar Years 2015 2016 2017 2018 2019 Real GDP (Billions) $16,397 $16,662 $17,012 $17,386 $17,699
Percent Change 2.6% 1.6% 2.1% 2.2% 1.8%
Population (Thousands, as of July 1) 1 5,448.8 5,540.5 5,634.7 5,730.5 5,822.2
Percent Change 1.9% 1.7% 1.7% 1.7% 1.6%
Nonfarm Employment (Thousands) 2 2,541.8 2,599.6 2,646.4 2,691.4 2,737.1
Percent Change 3.1% 2.3% 1.8% 1.7% 1.7%
Unemployment Rate 2 3.8 3.3 2.6 2.6 2.5
Personal Income (Millions) 3 $277,732 $287,620 $302,864 $321,945 $341,583
Percent Change 4.2% 3.6% 5.3% 6.3% 6.1%
Wage and Salary Income (Millions) 3 $146,574 $152,594 $161,444 $171,777 $182,255
Percent Change 5.7% 4.1% 5.8% 6.4% 6.1%
Retail Trade Sales* (Millions) 4 $94,920 $99,097 $104,052 $108,942 $114,171
Percent Change 4.7% 4.4% 5.0% 4.7% 4.8%
Housing Permits (Thousands) 1 30.4 36.9 42.5 43.6 45.7
Percent Change 4.2% 21.6% 14.9% 2.8% 4.8%
Nonresidential Construction (Millions) 5 $4,886 $5,673 $5,253 $5,789 $5,957
Percent Change 13.1% 16.1% -7.4% 10.2% 2.9%
Denver-Boulder-Greeley Inflation 2 1.2% 2.8% 3.0% 2.6% 2.6%
