3/1/2017

1

MVB Banking

The U.S. and Washington Region’s Economy: What to Expect

in 2017 and How the The Trump Administration May Impact

Near-Term Performance

Stephen S. Fuller, Ph.D.Dwight Schar Faculty Chair and University Professor

Director, Stephen S. Fuller InstituteSchar School of Policy and Government

George Mason University

February 21, 2017

How did the U.S. economy performed in 2016 and what is the outlook for 2017?

How is the Northern Virginia economy performing?

How did the local housing market perform in 2016?

What is the Washington region’s and NVA’s economic outlook?

Questions to be Addressed

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How did the U.S. economy perform in 2016 and what is the outlook for 2017?

0

5

10

15

20

25

30

35

40

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

% Chan

ge in GDP*

Quarters After Trough

1982-Q3

1991-Q1

2001-Q4**

2009-Q2

Recession Recovery Patterns of GDPPast Four Recessions

*in 1992 or 2009 Chained Dollars** Quarters 26+ include the 2009 RecessionSources: Bureau of Economic Analysis, The Stephen S. Fuller Institute at the Schar School, GMU

3/1/2017

3

-8,000

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

U.S. Annual Change in Payroll JobsMonth-Over-The-Year

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU

(000s) Jan = +2.1M

42

6

90

67

33

109

187

-35

297

216

74

530

516

-600 -400 -200 0 200 400 600 800

Federal Govt.

Information

Transp. & Util.

Other Services

Wlse Trade

Construction

Financial

Manufacturing

Leisure & Hosp.

Retail Trade

State & Local Govt

Prof. & Bus. Svcs

Educ & Health Svcs

U.S. Payroll Job Change by SectorJanuary 2016 – January 2017

Ranked by Size in 2015 (000s) Total = 2,132

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU

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4

5

6

7

8

9

10

11

U.S. Unemployment RateJanuary 2009 – January 2017

Sources: U.S. Bureau of Labor Statistics (Seasonally Adjusted), IHS Economics (January 2017), The Stephen S. Fuller Institute at the Schar School, GMU

%

IHS Forecast17 – 4.618 – 4.319 – 4.120 – 4.221 – 4.3

Jan = 4.8%

(25.0)

(20.0)

(15.0)

(10.0)

(5.0)

-

5.0

10.0

15.0

U.S. Leading IndexMonth-Over-Year Percent Change

Sources: The Conference Board, The Stephen S. Fuller Institute at the Schar School, GMU

3/1/2017

5

(10.0)

(8.0)

(6.0)

(4.0)

(2.0)

-

2.0

4.0

6.0

U.S. Coincident IndexMonth-Over-Year Percent Change

Sources: The Conference Board, The Stephen S. Fuller Institute at the Schar School, GMU

0

20

40

60

80

100

120

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Brent Crude Spot Price$ per barrel

Sources: IHS Economics (January 2017), The Stephen S. Fuller Institute at the Schar School, GMU

($/barrel)

Forecast

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6

-1

0

1

2

3

4

5

Consumer PricesPercent Change, 2001 - 2020

Sources: U.S. Bureau of Labor Statistics, IHS Economics (January 2017), The Stephen S. Fuller Institute at the Schar School, GMU

(%)

Forecast

0

1

2

3

4

5

6

7

8

30-Yr

10-YrTreasury

Fed

U.S. Interest RatesAverage Annual, 2001 - 2020

Sources: IHS Economics (January 2017), The Stephen S. Fuller Institute at the Schar School, GMU

(%)

Forecast

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7

3.1

3.83.5

3

2.2

-0.3

-1.6

1.92.3

1.5 1.5

2.93.2

2.7 2.83.2

2.92.4 2.3

-2

-1

0

1

2

3

4

5

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Growth in Total Consumption Outlays

Forecast

(%)

Sources: U.S. Bureau of Economic Analysis, IHS Economics (January 2017), The Stephen S. Fuller Institute at the Schar School, GMU

-10

-8

-6

-4

-2

0

2

4

6

U.S. Gross Domestic ProductQuarterly Change: 2007 – 2017

%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Forecast

Sources: U.S. Bureau of Economic Analysis, IHS Economics (January 2017), The Stephen S. Fuller Institute at the Schar School, GMU

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8

How is the Northern Virginia economy performing?

-60

-40

-20

0

20

40

60

80

100

Washington Metropolitan AreaAnnual Job Change, 2002-2016

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU

2011 2012 2013 2014 2015 2016

Annual Change Annual Month-Over-Year Change(000s)

3/1/2017

9

-60

-40

-20

0

20

40

60

80

100

Northern VirginiaAnnual Job Change, 2002-2016

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU

2011 2012 2013 2014 2015 2016

Annual Change Annual Month-Over-Year Change(000s)

0

2

1

-2

0

-1

2

1

3

6

0

4

14

-30 -20 -10 0 10 20 30

Manufacturing

Wholesale Trade

Transportation & Utilities

Information

Construction

Financial Activities

Other Services

Federal Govt

Leisure & Hospitality

Retail Trade

State & Local Govt

Edu.& Health Services

Prof. & Business Services

Northern Virginia Job Change by Sector December 2015 – December 2016

Ranked by Size in 2015 (000s)Total = 30,000

Sources: U.S. Bureau of Labor Statistics (Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU

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10

-15

-10

-5

0

5

10

15

20Professional, Scientific & Technical Services & Management Administrative & Waste Management

Professional and Business Services JobsNorthern Virginia

Annual Month Over-the-Year(000s)

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU

Dec 16 Total = 403.9

-4

-2

0

2

4

6

8Hospitals Ambulatory Health Care, Nursing & Residential Care Educational Services

Education and Health Services JobsNorthern Virginia

Annual Month Over-the-Year(000s)

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU

Dec 16 Total = 159.1

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-6

-4

-2

0

2

4

6

Federal Government JobsNorthern Virginia

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU

2011 2012 2013 2014 2015 2016

Annual Change Annual Month-Over-Year Change(000s)

Dec 16 Total: 86.9

-6

-4

-2

0

2

4

6

8

10 Accommodation Food Services & Drinking Places Entertainment

Leisure and Hospitality Services JobsNorthern Virginia

Annual Month Over-the-Year(000s)

Sources: U.S. Bureau of Labor Statistics (Not Seasonally Adjusted), The Stephen S. Fuller Institute at the Schar School, GMU

Dec 16 Total = 140.5

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12

0

2

4

6

8

10

12

5.4 – DC4.7 – U.S.3.4 – MSA3.3 – SMD3.1 – NVA

Washington Metropolitan AreaUnemployment Rates By Sub-State Area, 2009-2016

Sources: U.S. Bureau of Labor Statistics, The Stephen S. Fuller Institute at the Schar School, GMU

(%)

How did the Northern Virginia housing market perform in 2016?

3/1/2017

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-60

-40

-20

0

20

40

60

80

100

120

140

Percent Change in Inventories of Existing Homes Northern Virginia

Month-Over-Year 2000 – 2016(%)

Jan 17: -12.6%

Sources: RealEstate Business Intelligence (RBI) , Metropolitan Regional Information Systems (MRIS) Stephen S. Fuller Institute Total monthly inventory includes listings active at the end of the month plus sales during the month

Total Listings Per Sale, Washington MSAJan Each Year

Sources: RealEstate Business Intelligence (RBI) , Metropolitan Regional Information Systems (MRIS) Stephen S. Fuller Institute

0

5

10

15

20

25

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

ARLLD

PW

PG

DC

MONT

FFX

3/1/2017

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0

50

100

150

200

250

300

350

400

450

500

Median House Sales PriceNorthern Virginia

Sources: RealEstate Business Intelligence (RBI) , Metropolitan Regional Information Systems (MRIS) Stephen S. Fuller Institute

Jan 17: $402.5k(000s of $)

0

100

200

300

400

500

600Single-FamilyDetached

All Types

Single-FamilyAttached

Condo

Average House Sales PriceNorthern Virginia

(000s of $)

Sources: Metropolitan Regional Information Systems (MRIS) Stephen S. Fuller Institute

3/1/2017

15

-30

-20

-10

0

10

20

30

2000

2002

2004

2006

2008

2010 Jan

Mar

May Jul

Sep

Nov Jan

Mar

May Jul

SepNov Jan

Mar

May Jul

Sep

Nov Jan

Mar

May Jul

SepNov Jan

Mar

May Jul

Sep

Nov Jan

Average Sales Price Percent ChangeNorthern Virginia: All Housing Types

(%)Annual Change Annual Month-Over-Year Change

2012 2013 2014 2015 2016

Sources: RealEstate Business Intelligence (RBI) , Metropolitan Regional Information Systems (MRIS) Stephen S. Fuller Institute

What is the Washington region’s and Northern Virginia’s economic outlook?

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Washington Metropolitan AreaEmployment Change by Sub-State Area (000s)

2014 2015 2016 2017 2018 2019 2020 2021

D.C. 5.9 14.7 11.6 10.8 7.7 6.8 8.9 5.9

Sub. MD 11.8 17.4 26.1 22.0 19.6 17.0 17.0 10.8

No. VA 0.9 27.3 33.9 27.1 18.7 18.9 18.8 17.4

REGION 18.6 59.4 71.6 59.9 46.0 42.7 44.7 34.1

Source: BLS, IHS Economics, The Stephen S. Fuller Institute at the Schar School, GMUNOTE: The regional totals do not include Jefferson, WV.

Average Annual Change 1990-2010 = 36,000

-4

-3

-2

-1

0

1

2

3

4

5

Washington

U.S.

U.S. GDP and Washington Area GRP 2007 – 2015 – 2020

(Annual % Change)(%)

Forecast

Sources: U.S. Bureau of Economic Analysis, IHS Economics (January 2017), The Stephen S. Fuller Institute at the Schar School, GMU

3/1/2017

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-2

-1

0

1

2

3

4

5

6

NoVA

WMSA

Sub MD

DC

Washington Area and Sub-State AreasEconomic Outlook (GRP), 2007-2020

(Annual % Change)(%)

Forecast

Sources: The Stephen S. Fuller Institute at the Schar School, GMU

Thank you

Questions

sfullerinstitute.gmu.edu