council of economic advisers: year in review economic briefing
TRANSCRIPT
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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Year in Review Economic BriefingCouncil of Economic Advisers
December 19, 2013
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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3Source: Bureau of Labor Statistics.
Businesses Have Added 8.1 Million Jobs Over the Last 45 Months
-1000
-800
-600
-400
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0
200
400
-1000
-800
-600
-400
-200
0
200
400
Jan-07 Jan-09 Jan-11 Jan-13
Monthly Change in Private Payroll Employment
Thousands, Seasonally Adjusted
Nov-13
12-month
moving average
I. Labor Market
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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4Source: Bureau of Labor Statistics.
0
1
2
3
4
5
6
7
8
Jan-90 Jan-95 Jan-00 Jan-05 Jan-10
Unemployment Rate by DurationPercent of Civilian Labor Force
Nov-13
Unemployed for26 Weeks or Less
Unemployed for
27 Weeks & Over
2001-07 Average
2001-07 Average
The Unemployment Rate Has Fallen SteadilyBut the Long-Term Unemployment
Rate Remains Significantly Elevated
I. Labor Market
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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5Source: Bureau of Labor Statistics.
Recent Months of Real Wage Growth Have
Been Strongest Since 2009...
-3
-2
-1
0
1
2
3
4
5
6
-3
-2
-1
0
1
2
3
4
5
6
2007 2008 2009 2010 2011 2012 2013 2014
Growth in Real Average Hourly Earnings for
Production and Nonsupervisory Workers
12-Month Percent Cha nge
Nov-2013
I. Labor Market
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But Wage Inequality Continued its Decades-Long Increase
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
2.9
3.0
3.6
3.8
4.0
4.2
4.4
4.6
4.8
5.0
5.2
5.4
2000:Q1 2003:Q1 2006:Q1 2009:Q1 2012:Q1
Usual Weekly Earnings for Full-Time Wage & Salary
Workers, by PercentileRatio
Ratio of 90th Percentile to
10th Percentile
(Left Axis)
Ratio of 90th Percentile
to Median
(Right Axis)
T
E
ST
T
E
S
T
2013:Q3
Source: Bureau of Labor Statistics.
I. Labor Market
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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7Source: Bureau of Economic Analysis.
Real GDP Growth in Q3 Was the Strongest in Over a Year
0.3
3.12.7
1.5
-2.7
2.0
-2.0
-8.3
-5.4
-0.4
1.3
3.9
1.6
3.9
2.8 2.8
-1.3
3.2
1.4
4.9
3.7
1.2
2.8
0.1
1.1
2.5
3.6
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-8
-6
-4
-2
0
2
4
6
8
-10
-8
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-4
-2
0
2
4
6
8
2007:Q1 2008:Q1 2009:Q1 2010:Q1 2011:Q1 2012:Q1 2013:Q1
Real Gross Domestic Product GrowthAnnualized Quarterly Percent Change
2013:Q3
II. GDP
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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8Source: Federal Reserve Board.
8
9
1011
12
13
14
15
1617
18
19
20
2122
Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14
Car and Light Truck SalesMil lions of Units, Seasonally Adjusted Annual Rate
Nov-13
Vehicle Sales Rose to a 5-Year High in November
II. GDP
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-30
-20
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0
10
20
30
40
-40
-30
-20
-10
0
10
20
30
40
2007:Q1 2009:Q1 2011:Q1 2013:Q1
Real Residential Investment:
Quarterly Percent ChangePercent, Annual Rate
2013:Q3
9Source: Bureau of Economic Analysis.
Residential Investment Has Contributed to Growth For 12 Straight Quarters
II. GDP
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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10Source: Bureau of Economic Analysis.
But Business Fixed Investment Has Grown More Slowly
-30
-25
-20
-15
-10
-5
0
5
10
15
20
-30
-25
-20
-15
-10
-5
0
5
10
15
20
2007:Q1 2009:Q1 2011:Q1 2013:Q1
Real Business Fixed Investment:
Quarterly Percent ChangePercent, Annual Rate
2013:Q3
II. GDP
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The Trade Deficit Is Narrower than Pre-Crisis Years, Helped by a Falling Deficit in Petroleum
ProductsAnd the Current Account Deficit is the Lowest As a Share of the Economy Since 1998
*2013 based on merchandise trade data through October and average current account through Q3.
Source: Census Bureau; Bureau of Economic Analysis.
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3
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0
10
20
30
40
50
60
70
80
00 01 02 03 04 05 06 07 08 09 10 11 12 13*
All other goods
Petroleum
U.S. Merchandise Trade and Current Account Deficits
Avg. Monthly Goods Trade Deficit, Bil. Chn. 09$ Current Account Deficit Percent of GDP
II. GDP
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Source: Census Bureau.
Housing Has Been Recovering and There Is Still Upside Potential
400
800
1200
1600
2000
2400
2800
400
800
1200
1600
2000
2400
2800
'60 '65 '70 '75 '80 '85 '90 '95 '00 '05 '10 '15
New Residential Construction: Building Permits
Thousands, Annual Rate
Nov-13
Estimate of CurrentAverage Annual
Demand
III. Housing
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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13Source: National Association of Realtors.
Despite the Run-Up in Mortgage Rates, Home Prices Remain Affordable
60
80
100
120
140
160
180
200
220
60
80
100
120
140
160
180
200
220
Jan-71 Jan-81 Jan-91 Jan-01 Jan-11
Composite Housing Affordability IndexInde x (Median Income = Qualifying Income = 100)
Oct-13
More Affordable
Less Affordable
III. Housing
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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14Source: Mortgage Bankers Association; Freddie Mac.
But Higher Rates Have Dampened Refinancing Activity
0
1000
2000
3000
4000
5000
6000
7000
8000
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
Jan-07 Jan-09 Jan-11 Jan-13
Mortgage Rates and Refinancing ApplicationsPercent Index (3/16/90=100)
RefinancingApplications
(Right Scale)
30-Year FixedRate Mortgage
(Left Scale)
Dec. 12-13
III. Housing
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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Household Debt Service Payments are At Lowest on Record
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9
10
11
12
13
14
15
1980:Q1 1990:Q1 2000:Q1 2010:Q1
Household Debt Service RatioPercent of Disposable Income
2013:Q3
Note: Reflects estimated payments on mortgage and consumer debt.
Source: Federal Reserve Board.
III. Housing
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The U.S. is Now Projected to Produce More Natural Gas and Total Liquid Fuels than
Russia and Saudi Arabia
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10
20
30
40
50
2008 2009 2010 2011 2012 2013
U.S., Russia, and Saudi Arabia Liquid Fuels
and Natural Gas Production, 2008-2013 (est.)Qua drillion British Thermal Units
Liquid
Fuels
Natural
Gas
U.S.
Russia
Saudi
Arabia
Source: Energy Information Administration.
IV. Energy
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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17Source: Energy Information Administration.
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2000 2002 2004 2006 2008 2010 2012 2014
Imports (4-WeekMoving Average)
Domestic Production(4-Week Moving Average)
Week Ended12/13/2013
Crude Oil Production & ImportsMil lions of Barrels Per Day
Domestic Oil Production Has Exceeded Imports For First Time Since 1995
IV. Energy
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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Recent Years of Health Care Cost Growth Are Lowest On Record
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2
3
4
5
6
7
8
1961 1971 1981 1991 2001 2011
Real Per Capita Growth in National Health Expenditures
Percent
2013*
*Data for 2012 and 2013 are projections.
Source: CEA calculations based on data from the Centers for Medicare and Medicaid Services and
the Bureau of Economic Analysis.V. Health Care
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*Data for 2012 and 2013 are projections.
Source: CEA calculations based on data from the Centers for Medicare and Medicaid Services and
the Bureau of Economic Analysis.
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0
1
2
3
4
5
6
Private Insurance Medicare Medicaid
2000-2007
2007-2010
2010-2013
Real Per Enrollee Growth in Health Spending by PayerAverage Annual Growth Rate
19
Health Care Cost Slowdown is Broad-Based
V. Health Care
Th B d D fi i H F ll R idl h P id P l W ld S bili
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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20Source: Office of Management and Budget; Congressional Budget Office.
The Budget Deficit Has Fallen Rapidly the Presidents Proposals Would Stabilize
Debt as a Percentage of GDP Over The Next 10 Years
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-10
1
2
3
4
56
7
8
9
1011
-3
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1
2
3
4
56
7
8
9
1011
2000 2003 2006 2009 2012 2015 2018 2021 2024
Federal Budget DeficitPercent of GDP (Fiscal Year)
CBO's Current Law Baseline(May 2013)
CBO's Estimate of Administration'sFY 2014 Budget (May 2013)
Actual
VI. Fiscal Situation
Th D li i th D fi it Si FY2009 R t th L t F Y
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8/13/2019 Council of Economic Advisers: Year in Review Economic Briefing
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21Source: Office of Management and Budget; Congressional Budget Office.
The Decline in the Deficit Since FY2009 Represents the Largest Four-Year
Improvement Since the Demobilization from WWII
5.7
3.7
3.22.7
0
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2
3
4
5
6
7
2009-2013 1996-2000 1992-1996 1983-1987
Largest Post-War Four-Year Deficit Reductions
Percent of GDP (Fiscal Year)
VI. Fiscal Situation
Sl i C t G th H C t ib t d t L C t E ti t f
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Slowing Cost Growth Has Contributed to Lower Cost Estimates for
Medicare and Medicaid
4.5
4.8
5.0
5.3
5.5
5.8
6.0
6.3
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Percent of GDP
Recent CBO Projections of Medicare and Medicaid Outlays
Aug-10 Aug-11
Aug-12
May-13
Source: Congressional Budget Office.
i l Si i