summer/fall 2013 economic overview

7/29/2019 Summer/Fall 2013 Economic Overview

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Summer/Fall 2013

Economic OverviewPresented By

Kenneth Hunter, MPA

ABFM Executive Committee

Editor, Line Item

September 12, 2013


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3/43

Evaluating the Economy


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Sources for Information


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Understanding Productivity


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2013q2, 1.6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

2005q1

2005q2

2005q3

2005q4

2006q1

2006q2

2006q3

2006q4

2007q1

2007q2

2007q3

2007q4

2008q1

2008q2

2008q3

2008q4

2009q1

2009q2

2009q3

2009q4

2010q1

2010q2

2010q3

2010q4

2011q1

2011q2

2011q3

2011q4

2012q1

2012q2

2012q3

2012q4

2013q1

2013q2

Annualized US Chained GDP Growth, 2005-Present

1980-2005 Average, 3.2%


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1.7%

2.0%

3.6%1.3%

1.6%

-0.6%

-0.5%

2.1%

0.0%

2.5%

3.4%-5.4%

-5.5%

-5.7%

5.9%

5.8%

6.3%

1.7%1.4%

3.4%

0.4%

1.7%

1.2%

2.6%

-0.4%

-8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0%

Personal consumption expenditures

Goods

Durable goods

Nondurable goods

Services

Gross private domestic investment

Fixed investment

Nonresidential

Structures

Equipment

Intellectual property products

Residential

Change in private inventories

Net exports of goods and services

Exports

Goods

Services

ImportsGoods

Services

Govt. expenditures & gross investment

Federal

National defense

Nondefense

State and local

Annual Growth Rate, Elements of Chained US GDP, 2005-Present


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3.7%0.9%

-0.3%0.9%

1.7% 5.6%7.8%

-1.2%-0.4%

-0.8%0.0%

0.7%-1.7%

1.4%3.8%

6.2%0.2%

3.3%-2.4%

2.0%2.0%

0.3%3.8%

-1.2%3.2%

3.1%1.9%

-3.2% 3.4%2.0%

2.5%-1.6%

0.7%1.0%

2.2%0.2%

2.8%-0.6%

2.9%

-4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0%

AustraliaAustria

BelgiumBrazil

CanadaChileChina

Czech RepublicDenmark

FinlandFrance

GermanyHungary

IcelandIndia

IndonesiaIreland

IsraelItaly

JapanKorea

LuxembourgMexico

NetherlandsNew Zealand

NorwayPoland

PortugalRussian FederationSlovak Republic

South AfricaSpain

SwedenSwitzerland

TurkeyUnited Kingdom

United StatesEuro area (17 countries)

G20

2012 Chained GDP Growth


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44,78543,848

40,10241,455

22,2116,091

26,60042,176

23,06038,282

36,24941,231

25,07122,124

37,78343,579

29,83033,139

35,20730,800

91,37718,321

43,14632,150

65,638

22,16725,23023,622

25,32327,609

32,08143,176

53,73318,078

36,89249,614

36,369

- 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000

AustraliaAustria

BelgiumCanada

ChileChina

Czech RepublicDenmark

EstoniaFinlandFrance

GermanyGreece

HungaryIcelandIreland

IsraelItaly

JapanKorea

LuxembourgMexico

NetherlandsNew Zealand

NorwayPoland

PortugalRussian Federation

Slovak RepublicSlovenia

SpainSweden

SwitzerlandTurkey

United KingdomUnited States

OECD Total

2012 GDP Per Capita ($US)


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5.9%

5.8%

1.9%6.3%

5.0%

6.7%

6.8%

6.9%

6.6%

6.0%

7.7%

9.6%

5.6%

-0.7%

6.3%

5.3%4.6%

6.6%

1.8%

5.5%

8.8%

3.3%

-2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0%

Exports of goods and services

Exports of goods

Foods, feeds, and beveragesIndustrial supplies and materials

Durable goods

Nondurable goods

Capital goods, except automotive

Civilian aircraft, engines, and parts

Other

Automotive vehicles, engines, and parts

Consumer goods, except automotive

Durable goods

Nondurable goods

Other

Exports of services

Transfers under U.S. military agency sales contracts

Travel

Passenger fares

Other transportation

Royalties and license fees

Other private services

Other

Annual Growth Rate, Chained Values of US Exports, 2005-Present


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July 2008, 5.4%

July 2013, 1.8%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

Oct

Jan

Apr

Jul

1-Yr Change in Chained CPI, All Items, January 2006-Present


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14/43The market certainly recovered!

Wheres the Wealth?


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Are Markets Stressed?


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Treasury Yields Ticking Upward


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Dollars Position Helping Exports


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Housing Market Slowly Recovering


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Mortgage Rates Climbing


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Energy Costs Trending Upward

h d d l l


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Where do we stand on volatility?

Crude Oil

Gold

S&P 500


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How are Individuals Doing?

-115,000

848,000

2,006,000

-.5M

.M

.5M

1.M

1.5M

2.M

2.5M

Last 1 Month Since Start of 2013 Since August 2012

Change in US Civilian Employment, August 2013


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Published 9/6/2013


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2007-11-01,

23,745,000

2013-08-01,

26,846,000

20M

22M

24M

26M

28M

30M

2005-01-01

2005-03-01

2005-05-01

2005-07-01

2005-09-01

2005-11-01

2006-01-01

2006-03-01

2006-05-01

2006-07-01

2006-09-01

2006-11-01

2007-01-01

2007-03-01

2007-05-01

2007-07-01

2007-09-01

2007-11-01

2008-01-01

2008-03-01

2008-05-01

2008-07-01

2008-09-01

2008-11-01

2009-01-01

2009-03-01

2009-05-01

2009-07-01

2009-09-01

2009-11-01

2010-01-01

2010-03-01

2010-05-01

2010-07-01

2010-09-01

2010-11-01

2011-01-01

2011-03-01

2011-05-01

2011-07-01

2011-09-01

2011-11-01

2012-01-01

2012-03-01

2012-05-01

2012-07-01

2012-09-01

2012-11-01

2013-01-01

2013-03-01

2013-05-01

2013-07-01

Civilian Labor - Part Time - January 2005 to August 2013

2007-11-01,122,850,000 2013-08-01,117,324,000

110M

2005-01-01

2005-03-01

2005-05-01

2005-07-01

2005-09-01

2005-11-01

2006-01-01

2006-03-01

2006-05-01

2006-07-01

2006-09-01

2006-11-01

2007-01-01

2007-03-01

2007-05-01

2007-07-01

2007-09-01

2007-11-01

2008-01-01

2008-03-01

2008-05-01

2008-07-01

2008-09-01

2008-11-01

2009-01-01

2009-03-01

2009-05-01

2009-07-01

2009-09-01

2009-11-01

2010-01-01

2010-03-01

2010-05-01

2010-07-01

2010-09-01

2010-11-01

2011-01-01

2011-03-01

2011-05-01

2011-07-01

2011-09-01

2011-11-01

2012-01-01

2012-03-01

2012-05-01

2012-07-01

2012-09-01

2012-11-01

2013-01-01

2013-03-01

2013-05-01

2013-07-01

Civilian Labor - Full Time - January 2005 to August 2013

U l Cl i DOWN!


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Unemployment Claims DOWN!

Hi i R d (S Of)


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Hiring Resumed (Sort Of)

Hi i R d (S t Of)


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Hiring Resumed (Sort Of)

Th Bi t Shift f All!


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The Biggest Shift of All!

Di t Still BIG I !


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Discouragement Still a BIG Issue!


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Earnings are

Improving

It B TOUGH R i !


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Saez, Emmanuel. Striking it Richer: The Evolution of Top Incomes in the United States (Updated with 2012 preliminary estimates).

http://elsa.berkeley.edu/~saez/saez-UStopincomes-2012.pdf(September 3, 2013)

Its Been a TOUGH Recession!
http://elsa.berkeley.edu/~saez/saez-UStopincomes-2012.pdfhttp://elsa.berkeley.edu/~saez/saez-UStopincomes-2012.pdfhttp://elsa.berkeley.edu/~saez/saez-UStopincomes-2012.pdfhttp://elsa.berkeley.edu/~saez/saez-UStopincomes-2012.pdfhttp://elsa.berkeley.edu/~saez/saez-UStopincomes-2012.pdfhttp://elsa.berkeley.edu/~saez/saez-UStopincomes-2012.pdf


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G li P i i P ti


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Gasoline Prices in Perspective


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What It Means for Government


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Federal Debt Keeps Growing!


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Hows the Fed Helping?


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Revenues, 11.2%

Revenues, 2.3%

Expenditures, 3.1%

Expenditures, -

0.1%

Debt Outstanding,

0.0%

Debt Outstanding,

3.4%

-2%

0%

2%

4%

6%

8%

10%

12%

State Local

1-Yr Change in State & Local Government Revenues & Exependitures,

FY 2011

State & Local Condition Better


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Local Pensions are Underfunded

100%

93%

90%88%

87% 86%88%

84%

80%78%

74%

50%

60%

70%

80%

90%

100%

110%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Aggregate Actuarial Funding Ratio of Select State & Local

Defined-Contribution Plans, FY 2001 to FY 2011


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Local Pensions are Underfunded

0%

20%

40%

60%

80%

100%

120%

140%

FY 2010 Actuarial Funding Ratios, US State & Local Defined Benefit Plans

Group Funding Aggregate, 77.8%

Source: Center for Retirement Research, Boston College


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Looking forward?


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Outlook

US GDP Growth

2.3% annualized rate for 3rd Quarter

1.9% growth for 2013 (down from earlier 2.4%)

3.0% growth in 2014

Probability of Feds Taper

~45% during rest of 2013

~80% in 2014


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Thank You!

Kenneth Hunter

[email protected]

www.ABFM.org

summer/fall 2013 economic overview

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