National Forecast Presentation

2.1 MB·

Old Dominion University
2013 National Economic Outlook

January 30, 2013

Professor Vinod Agarwal
Professor Mohammad Najand
Professor Gary A. Wagner

www.odu.edu/forecasting
1
Presentation Outline
• 2012 Scorecard
• Current economic conditions
• Outlook for 2013
– What are the likely sources for growth?
• Monetary Policy
• Downside Risks
• Upside risks
2
2012 Scorecard
2012 2012
Forecast Actual
Real Gross Domestic Product (GDP) 2.40% 2.26%
Employment 2.00% 1.38%
Unemployment rate 7.9% 8.1%
Consumer Price Index (CPI) 2.30% 1.74%
CPI – Core 2.10% 1.89%
3- month Treasury bill 0.50% 0.09%
10- year Treasury bond 1.90% 1.80%
30- year conventional mortgage 3.80% 3.66%
Potential and Actual (Real) Gross Domestic Product, 2000-2015
$16,000
$14,000
s
r
a
l
lo
D
5
0
0 $12,000
2
f
o
s
n
o
illiB
$10,000
$8,000
Potential GDP Actual GDP
4
Source: Bureau of Economic Analysis and Old Dominion University Economic Forecasting Project.
Growth in Real Gross Domestic Product (GDP), 2006:Q1 – 2012:Q4
Seasonally adjusted annualized rate *100
2012:Q4 is forecasted.
6

4
2
0
e
g
a
t 2012 Growth Rates:
n -2
e
cr Q1 = 2.0%
e
P
Q2 = 1.3%
-4
Q3 = 3.1%
-6 Q4 = 1.2%
-8
-10
6 6 6 6 7 7 7 7 8 8 8 8 9 9 9 9 0 0 0 0 1 1 1 1 2 2 2 2
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
/ / / / / / / / / / / / / / / / / / / / / / / / / / / /
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
/ / / / / / / / / / / / / / / / / / / / / / / / / / / /
1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0
1 1 1 1 1 1 1
5
Source: Bureau of Economic Analysis and Old Dominion University Economic Forecasting Project.
Where has GDP growth been coming from?
Last Four Quarters, seasonally adjusted annualized rate
5%
Defense spending
4.1% increased by 12.9%
4%
Change in inventories = 2.5%
3.1%
GDP
3%
Consumption
2.0%
Nonresidential investment
2%
1.3% Residential investment
Change in inventories
1%
Government
0% Exports
Imports
-1%
-2%
2011:Q4 2012:Q1 2012:Q2 2012:Q3
6
Source: Bureau of Economic Analysis and Old Dominion University Economic Forecasting Project.
Month-to-Month Change in US Total Nonfarm Employment
January 2004 – December 2012
Average last 12 months: +141,800
Average last 6 months: +159,700
600
400
200
0
s
d
n
a
s -200
u
o Average monthly change 2004-2006:
h
T
-400 + 184,000 jobs
-600
Losing roughly 800,000 per month
-800
-1000
4 4 4 4 5 5 5 5 6 6 6 6 7 7 7 7 8 8 8 8 9 9 9 9 0 0 0 0 1 1 1 1 2 2 2 2
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0
1 1 1 1 1 1 1 1 1
Private Sector Public Sector
7
Source: Bureau of Labor Statistics and Old Dominion University Economic Forecasting Project.
US Unemployment Rate, January 2005 – December 2012
18
16
14
12
t 10
n
e
c
r
e
P 8
6 December 2012: 7.8%
Average from 1984-2008: 5.7%
4
2
0
5 5 5 5 6 6 6 6 7 7 7 7 8 8 8 8 9 9 9 9 0 0 0 0 1 1 1 1 2 2 2 2
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0 1 4 7 0
1 1 1 1 1 1 1 1
Unemployment Rate U6 Rate
8
Source: Bureau of Labor Statistics and Old Dominion University Economic Forecasting Project.
Long-Term Unemployment, 1990-present
Of Total Unemployed, Percentage Unemployed for 27 Weeks or Longer
50
Peak: 45.5% (March 2011)
Currently: 39.1%
40 4 consecutive months of decline
d
e
y
o
lp
m
30
e
n
U
e
s
o
h
t
fo 20
e
g
a
t
n
e
c
r
e
P 10
0
0 0 1 1 2 2 3 4 4 5 5 6 7 7 8 8 9 9 0 1 1 2 2 3 4 4 5 5 6 6 7 8 8 9 9 0 1 1 2 2
9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 1
9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /
1 8 3 0 5 2 7 2 9 4 1 6 1 8 3 0 5 2 7 2 9 4 1 6 1 8 3 0 5 2 7 2 9 4 1 6 1 8 3 0
1 1 1 1 1 1 1 1 1 1
9
Source: Bureau of Labor Statistics and Old Dominion University Economic Forecasting Project.
The 2007-2009 Recession in Perspective
% Decline in Total US Non-farm Payroll Employment from Pre-Recession Peak
1%
0%
1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69 73 77 81 85 89 93
t
n
e -1%
m
y
o
lp
m -2%
E
k
a
e
P
n -3%
o Back to pre-recession
is
se peak around April 2015
c
e -4%
R (87 months)
-
e
r
P
fo -5%
%
-6%
-7%
Months after Pre-Recession Peak Employment
March 1980 July 1981 June 1990 February 2001 Current (January 2008)
10
Source: Bureau of Labor Statistics and Old Dominion University Economic Forecasting Project