Regional Economic Update

Robert K. TriestVice President and Director,

New England Public Policy CenterFederal Reserve Bank of Boston

robert.triest@bos.frb.org

Lincoln Institute of Land PolicyDecember 2, 2016

The views expressed in this presentation are those of the author and do notnecessarily represent the views of the Federal Reserve Bank of Boston or

the Federal Reserve System.

Federal Reserve Districts

R. Triest Regional Economic Update, December 2, 2016 2/ 15

Employment growth in New England and the U.S.

.9.9

51

1.05

1.1

Pre

-rec

essi

on p

eak

= 1

2000m1 2002m1 2004m1 2006m1 2008m1 2010m1 2012m1 2014m1 2016m1

US CT ME MANH RI VT

Seasonally adjustedSource: Bureau of Labor Statistics Establishment Survey and Haver Analytics

R. Triest Regional Economic Update, December 2, 2016 4/ 15

Unemployment rates (U-3)

24

68

1012

perc

ent

2000m1 2002m1 2004m1 2006m1 2008m1 2010m1 2012m1 2014m1 2016m1

US CT ME MANH RI VT

Seasonally adjustedSource: Bureau of Labor Statistics Household Survey and Haver Analytics

R. Triest Regional Economic Update, December 2, 2016 5/ 15

Initial claims for unemployment insurance benefits

.51

1.5

22.

5Ja

n 20

05 =

1

2004m1 2006m1 2008m1 2010m1 2012m1 2014m1 2016m1

US CT ME MANH RI VT

12-month moving averageSource: U.S. Dept. of Labor and Haver Analytics

R. Triest Regional Economic Update, December 2, 2016 6/ 15

U-6 labor underutilization rate

510

1520

perc

ent

2004q1 2007q1 2010q1 2013q1 2016q1

US CT ME MANH RI VT

12-month moving averageSource: Bureau of Labor Statistics and Haver Analytics

R. Triest Regional Economic Update, December 2, 2016 7/ 15

New England and U.S. employment growth by supersector

Construction

Education and Health Services

Finance, Insurance, Real Estate

Goverment

Leisure and Hospitality

Manufacturing

Prof. and Business Services

Other Services

Trade, Transp., and Utilities

Source: Bureau of Labor Statistics Establishment Survey and Haver Analytics

Industry employment growth, thousands of jobs

October '07-October '09 October '09-October '16

R. Triest Regional Economic Update, December 2, 2016 8/ 15

FHFA house price index

5010

015

020

025

019

95 =

100

1985q1 1990q1 1995q1 2000q1 2005q1 2010q1 2015q1

US CT ME MANH RI VT

Seasonally adjustedSource: Federal Housing Finance Agency and Haver Analytics

R. Triest Regional Economic Update, December 2, 2016 9/ 15

State general revenues

.8.9

11.

11.

2P

re-r

eces

sion

pea

k =

1

2006m1 2008m1 2010m1 2012m1 2014m1 2016m1

CT ME MANH RI VT

12-month moving averageSource: Federal Reserve Bank of Boston New England Economic Indicators

R. Triest Regional Economic Update, December 2, 2016 10/ 15

The Federal Open Market Committee meets 8 times yearly

Janet Yellen

Eric Rosengren Esther George Daniel Tarullo Jerome Powell

Lael Brainard James Bullard Stanley Fischer William Dudley Loretta Mester

FOMC Alternate Members:

Charles Evans Michael Strine Patrick Harker Robert Kaplan Neel Kashkari

R. Triest Regional Economic Update, December 2, 2016 11/ 15

SEP: (September 2016) Growth in Real GDPFor release at 2:00 p.m., EDT, September 21, 2016

Figure 1. Medians, central tendencies, and ranges of economic projections, 2016–19 and over the longer run

Percent

Change in real GDP

Central tendency of projections

Range of projections

Median of projections

Actual

2011 2012 2013 2014 2015 2016 2017 2018 2019 Longer run

Unemployment rate

2011 2012 2013 2014 2015 2016 2017 2018 2019 Longer run

3

2

1

Percent

9

8

7

6

5

4

Percent

PCE inflation

2011 2012 2013 2014 2015 2016 2017 2018 2019 Longer run

3

2

1

Note: Definitions of variables and other explanations are in the notes to the projections table. The data for the actual values of the variables are annual.

Source: https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20160921.pdf

R. Triest Regional Economic Update, December 2, 2016 12/ 15

SEP: (September 2016) Unemployment Rate

For release at 2:00 p.m., EDT, September 21, 2016

Figure 1. Medians, central tendencies, and ranges of economic projections, 2016–19 and over the longer run

Percent

Change in real GDP

Central tendency of projections

Range of projections

Median of projections

Actual

2011 2012 2013 2014 2015 2016 2017 2018 2019 Longer run

Unemployment rate

2011 2012 2013 2014 2015 2016 2017 2018 2019 Longer run

3

2

1

Percent

9

8

7

6

5

4

Percent

PCE inflation

2011 2012 2013 2014 2015 2016 2017 2018 2019 Longer run

3

2

1

Note: Definitions of variables and other explanations are in the notes to the projections table. The data for the actual values of the variables are annual.

Source: https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20160921.pdf

R. Triest Regional Economic Update, December 2, 2016 13/ 15

SEP: (September 2016) PCE Inflation Rate

For release at 2:00 p.m., EDT, September 21, 2016

Figure 1. Medians, central tendencies, and ranges of economic projections, 2016–19 and over the longer run

Percent

Change in real GDP

Central tendency of projections

Range of projections

Median of projections

Actual

2011 2012 2013 2014 2015 2016 2017 2018 2019 Longer run

Unemployment rate

2011 2012 2013 2014 2015 2016 2017 2018 2019 Longer run

3

2

1

Percent

9

8

7

6

5

4

Percent

PCE inflation

2011 2012 2013 2014 2015 2016 2017 2018 2019 Longer run

3

2

1

Note: Definitions of variables and other explanations are in the notes to the projections table. The data for the actual values of the variables are annual.

Source: https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20160921.pdf

R. Triest Regional Economic Update, December 2, 2016 14/ 15

SEP: (September 2016) Timing of Policy Firming

For release at 2:00 p.m., EDT, September 21, 2016

Figure 2. FOMC participants’ assessments of appropriate monetary policy: Midpoint of target range or target level for

the federal funds rate

Percent

2016 2017 2018 2019 Longer run

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Note: Each shaded circle indicates the value (rounded to the nearest 1/8 percentage point) of an individual par-ticipant’s judgment of the midpoint of the appropriate target range for the federal funds rate or the appropriate target level for the federal funds rate at the end of the specified calendar year or over the longer run. One participant did not submit longer-run projections for the federal funds rate.

Source: https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20160921.pdf

Note: each dot represents the judgement of one FOMC participant of the midpoint of the appropriate target rangefor the Federal Funds Rate at the end of the calendar year.

R. Triest Regional Economic Update, December 2, 2016 15/ 15