enterpriseseattle forecast 2012 - ken goldstein
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40th Annual Economic Forecast Conference, Thursday, January 12, 2012 (Seattle, WA)2012 Forecast - Ken Goldstein, The Conference BoardTRANSCRIPT
enterpriseSeattle’s 40th Economic Forecast Conference
Thursday, January 12, 2012Washington State Convention Center
[email protected] ▪ (206) 389-8650 ▪ www.enterpriseSeattle.org
2012 FORECAST: A LOOK AHEAD Moderator:
Jeff Marcell, enterpriseSeattle
Panelists:
- Dick Conway, Puget Sound Economic Forecaster
- Mike Dueker, Russell Investments
- Ken Goldstein, The Conference Board
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Ken Goldstein
Stuck in the Slow Lane
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Overview:
No Momentum – No Help on the Way
Ditto Global Economy - Even In Euro-Zone
(3.9% in 2011, 3.2% in 2012)
Food + Energy + Commodity + CONFIDENCE
Housing Still A Drag
Currency Speculation
Recession Risk 50-50
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Global Economy Is Coming Back
Source: IMF, The Conference Board
2012 2013-2016 2017-2025 U S 1.8 3.0 2.3 Euro Area 0.5 1.7 1.7 Japan 2.1 1.2 1.5 Other Advanced Economies 2.5 2.6 1.7 Developing Asia (ex. China and India) 2.8 4.4 3.8 China 8.7 6.5 3.5 India 7.4 6.0 4.6
Latin America 2.9 3.4 3.2 Middle East 2.3 3.8 3.5 Africa 2.4 4.2 3.9 World Total 3.2 3.5 2.7
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The Conference Board’s Leading Economic Indexes
Industrial Production in Choppy Water
Source: The Conference Board
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov2010 2011
U.S.A 1.2 0.8 0.2 0.9 0.7 -0.3 0.7 0.3 0.5 0.3 0.1 0.9 0.5
MEXICO 1.3 0.2 0.7 -0.2 0.8 0.5 -0.4 0.3 0.0 -1.1 -0.3 -0.5
UK -0.1 0.5 0.2 0.4 0.4 0.4 0.6 0.0 0.2 -0.5 -0.4 -0.4
GERMANY 0.9 0.7 0.7 0.7 0.2 0.5 0.5 0.3 0.0 -2.1 -1.3 0.3
FRANCE -0.3 0.7 0.9 0.6 0.8 0.2 -0.4 0.4 -0.3 -0.4 -0.6 0.5
SPAIN -1.1 0.1 1.0 0.1 -0.5 -0.2 0.0 -0.2 -0.8 -0.2 -0.4 -0.2
JAPAN 0.0 0.2 1.2 0.8 -1.2 -2.3 -0.9 0.5 1.1 0.1 -0.4 1.1
KOREA 0.9 1.2 1.2 0.0 0.7 -0.4 0.5 -0.5 -0.2 0.4 -0.7 0.0
AUSTRALIA 0.2 0.1 -0.6 -0.2 0.5 0.8 0.4 0.3 1.0 0.7 0.6 0.6
CHINA -0.1 -1.1 0.5 0.3 1.0 0.1 0.4 1.0 0.6 0.6 0.4 -0.1
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In All Regions – Even The Euro-Zone
Note: Shaded areas represent recessionsSource: The Conference Board
-25
-20
-15
-10
-5
0
5
10
15
20
25
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Nov.'11
6-month annualized percent change
US LEI
Asia LEI Euro Area LEI
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Especially Service-Sector Job Growth
Note: Shaded areas represent recessions.Data as of November 2010 are based on surveys conducted by The Nielsen Company; data prior to that are based on surveys conducted by TNS.Source: The Nielsen Company, TNS, NBER, The Conference Board
0
40
80
120
160
200
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Index, 1985=100
Dec.'11
Expectation
Present Situation
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Stuck in the Slow Lane
2011 2012 2011 2012 2013 III Q* IV Q I Q II Q ANNUAL ANNUAL ANNUAL---------------------------------------------------------------------------------------------------------------------------------------------------
Real GDP 1.8 2.8 1.3 1.6 1.8 1.8 2.2--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------CPI Inflation 3.1 1.0 1.1 1.6 3.1 1.7 1.9--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Real Consumer Spending 1.7 2.7 2.4 2.2 2.2 2.2 2.0--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Real Capital Spending 15.7 3.4 4.1 3.1 8.7 5.0 3.6--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Net Exports Bil. '00$ -402.8 -398.7 -410.0 -409.5 -410.6 -402.5 -364.3--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Industrial Production 6.2 3.5 3.1 2.5 4.1 3.2 2.6--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Unemployment Rate (%) 9.1 8.7 8.8 9.0 9.0 8.9 8.6--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------90 Day T-Bills (%) 0.02 0.05 0.05 0.17 0.06 0.14 0.3010 Yr Treas Bonds (%) 2.43 2.07 1.97 1.97 2.79 2.00 2.55--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Exchange Rates$/EURO 1.40 1.36 1.30 1.30 1.39 1.30 1.27 Yen/$ 79 77 79 80 80 81 89 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------*Actual Data
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Price Split
Source: Department of Energy, The Conference Board
0
1
2
3
4
0
2
4
6
8
10
12
14
1994 1996 1998 2000 2002 2004 2006 2008 2010
$ per thousand cubic feet $ per gallon
Gasoline (right scale)
Natural Gas (left scale)
3Q '11
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Wealth destruction phase Cresting
Note: Shaded areas represent recessionsSource: The Conference Board
-4
-2
0
2
4
6
8
10
12
14
16
88 90 92 94 96 98 00 02 04 06 08 10 12 14
October1987Crash
JunkBondCrashandFridaythe 13thmini crash
AsianCrisis
Long TermCapital
CorporateAccountingScandals
Burstingof EquityBubble
CreditCrunch
Oct '11
Bear SternsCollapse
LehmanBrothersCollapse
The Conference Board's Experimental Monthly Financial Instability Index
SovereignDebtCrisis inEurope
U.S. DebtDowngrade
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Euro Premium Erosion
Note: Shaded areas represent recessionsSource: FRB, The Conference Board
1.0
1.1
1.2
1.3
1.4
1.5
1.62003 2004 2005 2006 2007 2008 2009 2010 2011 2012
U Forecast
-Stdev
Trend Jan. '03 - Dec. '11
+Stdev
USD/EUR
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In A Panicky World – Flight To Safety
Note: Shaded areas represent recessionsSource: FRB, The Conference Board
75
80
85
90
95
100
105
110
115
120
125
130
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Y
+Stdev
-Stdev
Forecast
Trend Jan.'03 - Dec. '11
JPY/USD