economic outlook fall 2012 -...
TRANSCRIPT
P A T R I C K M . B A R K E Y A N D P A U L E . P O L Z I N
B U R E A U O F B U S . & E C O N . R E S E A R C H T H E U N I V E R S I T Y O F M O N T A N A
Economic Outlook Fall 2012
Another Mid-Year Economic Malaise
Very weak consumer spending brings U.S. growth below 2 percent in second quarter
European recession, prospect of currency crisis hangs over global economy
Western states doing better
Inflation remains a non-issue
Housing is healing
Faster Growth Postponed Again
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
1 2 3 4 1 2 3 4 1 2 3 4
January
September
Forecast Actual
Percent
Growth in U.S. Real GDP, percent, Actual and Forecast
2011 2012 2013
0
5
10
15
20
25
30
35
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Introduction of Euro Lehman bankruptcy
Yields on 10-year Government Bonds
Greece
Portugal
Ireland
Italy Spain
France Germany
Percent The Rise and Fall of Europe
U.S. Housing Price Appreciation Closer
-6
-4
-2
0
2
4
6
Jan-
10
Feb-
10
Mar
-10
Apr
-10
May
-10
Jun-
10
Jul-1
0
Aug
-10
Sep-
10
Oct
-10
Nov
-10
Dec
-10
Jan-
11
Feb-
11
Mar
-11
Apr
-11
May
-11
Jun-
11
Jul-1
1
Aug
-11
Sep-
11
Oct
-11
Nov
-11
Dec
-11
Jan-
12
Feb-
12
Mar
-12
Apr
-12
May
-12
Jun-
12
10-city
20-city
Percent Change in Case-Shiller Composite Housing Price Index, 3 month moving average
Montana’s Current Status: The Good and the Bad
Income growth looks strong
Job market is healing
Housing prices beginning to recover
Energy investment is robust
Spring/Summer has been very dry
Retail remains very weak
Global economic concerns affecting energy and commodity prices
Income Tax Withholding 12-month totals
640
650
660
670
680
690
700
710
720
730
740
Jul-0
8
Sep-
08
Nov
-08
Jan-
09
Mar
-09
May
-09
Jul-0
9
Sep-
09
Nov
-09
Jan-
10
Mar
-10
May
-10
Jul-1
0
Sep-
10
Nov
-10
Jan-
11
Mar
-11
May
-11
Jul-1
1
Sep-
11
Nov
-11
Jan-
12
Mar
-12
May
-12
Income Tax Withholding 12-month totals
640
650
660
670
680
690
700
710
720
730
740
Jul-0
8
Sep-
08
Nov
-08
Jan-
09
Mar
-09
May
-09
Jul-0
9
Sep-
09
Nov
-09
Jan-
10
Mar
-10
May
-10
Jul-1
0
Sep-
10
Nov
-10
Jan-
11
Mar
-11
May
-11
Jul-1
1
Sep-
11
Nov
-11
Jan-
12
Mar
-12
May
-12
11% rate
986.17 3722.61 ($ per Metric Ton)
Lead 1881.48
1112.90 3546.30 ($ per Metric Ton)
Zinc 1847.75
39.15 133.93 ($ per Barrel)
Oil 87.89
Low High
3105.10 9880.94
($ per Metric Ton) Copper
7584.26
Metals & Energy (as of August 2012)
1.04 1.94 ($ per Pound)
Beef 1.80
4.29 11.97 ($ per bushel)
Wheat 9.41
4.62
2.25 5.42
($ per bushel) Barley
5.42
370.69 [Current]
Materials & Foodstuffs (as of August 2012)
Low High
321.65 430.78
($ per Thousand BF) Lumber
388.17 current
Commodity Prices: Favorable to Montana?
0
10
20
30
40
50
60
70
80
90
100
Energy, 14%
Mining, 5% Wood Products, 5%
Other Manufacturing, 12%
Transportation, 11%
Agric. & Related, 11%
Fed. Military, 9%
Travel & Tourism, 9%
Fed. Civilian, 23%
Percent
Labor Income and Basic Industries, Montana
-10
-8
-6
-4
-2
0
2
4
6
8 19
91
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
2010
Percent Change
Nonfarm Earnings and Nonfarm Basic Earnings Montana, 1991-2010
Nonfarm Earnings Nonfarm Basic
-4
-2
0
2
4
6
8
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
2010
2011
Percent Change
Nonfarm Earnings, Actual and Projected Montana, 1995-2011
Actual Projected
0
10
20
30
40
50
60
70
80
90
100
Energy, 14%
Mining, 5% Wood Products, 5%
Other Manufacturing, 12%
Transportation, 11%
Agric. & Related, 11%
Fed. Military, 9%
Travel & Tourism, 9%
Fed. Civilian, 23% Mild Declines
Unknown
Recovering
Mixed
Weak Recovery
Flat
Prospects
Strong Growth
Percent
Labor Income and Basic Industries, Montana
Better Than Feared
Change in Nonfarm Earnings,
Montana, 2009-2015
-2.0
0.9
2.6
-3.3
1.0
1.8
2.4 2.2 2.1 2.3
-4
-3
-2
-1
0
1
2
3
'09 '10 '11 '12 '13 '14 '15
Actual Projected
Annual Percent Change In Nonfarm Earnings (in Constant Dollars)
4.7 4.4 3.2 3.1 2.8
1.5 1.3
-3.1
13.6
9.1
6.7 6.4
11.7
8.4
6.5
4.2
-4
-2
0
2
4
6
8
10
12
14
16
Gallatin Silver Bow Cascade Yellowstone Flathead Ravalli Lewis & Clark Missoula
2009-2011
2002-2004
2.2
1.5 1.8
2 2.1 2.1 2.1
3 3.3
0
0.5
1
1.5
2
2.5
3
3.5 Percent
Projected Annual Percent Change In Nonfarm Earnings (in Constant Dollars) 2012-2015
Recovery Year for Real Wages
Questions?