national economic indicators ray owens october 14, 2015
TRANSCRIPT
National Economic Indicators
Ray OwensOctober 14, 2015
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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2
Q23.9%
Real Gross Domestic Product
Source: Bureau of Economic Analysis via Haver Analytics & Federal Reserve Board
Percent change from previous quarter at annual rate
FOMC Projection
Note: Projection is the median, central tendency, and range from the September 2015 Summary of Economic Projections. Red dots indicate median projections. Projections of change in real gross domestic product (GDP) are from the fourth quarter of the previous year to the fourth quarter of the year indicated.
0
0.5
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1.5
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2.5
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3.5
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4.5
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0
0.5
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1.5
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2.5
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3.5
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4.5
5
1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
3
Decomposition of Real GDP: Productivity
Source: Bureau of Economic Analysis via Haver Analytics
10-year annual growth rates
Note: Productivity is calculated as real GDP per employee, from the Household Survey.
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
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0.5
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1.5
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2.5
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3.5
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4.5
5
1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
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Decomposition of Real GDP: HH Employment
Source: Bureau of Economic Analysis via Haver Analytics
10-year annual growth rates
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
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0
0.5
1
1.5
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3.5
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4.5
5
1958 1961 1964 1967 1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 2012 2015
5
Decomposition of Real GDP
Source: Bureau of Economic Analysis via Haver Analytics
10-year annual growth rates
Note: Productivity is calculated as real GDP per employee, from the Household Survey.
HH Employment
Productivity
6
128
130
132
134
136
138
140
142
144
128
130
132
134
136
138
140
142
144
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Millions of Persons
Nonfarm Payroll Employment
Source: Bureau of Labor Statistics via Haver Analytics
September142.4 mil.
-800
-700
-600
-500
-400
-300
-200
-100
0
100
200
300
400
-800
-700
-600
-500
-400
-300
-200
-100
0
100
200
300
400
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
7
Quarterly average of monthly changes, thousands of persons
Nonfarm Payroll Employment
Sep. 142Aug. 136Jul. 223Jun. 245May. 260
Monthly Change
Source: Bureau of Labor Statistics via Haver Analytics
Q3 Avg.
8
4
4.5
5
5.5
6
6.5
7
7.5
8
8.5
9
9.5
10
10.5
11
4
4.5
5
5.5
6
6.5
7
7.5
8
8.5
9
9.5
10
10.5
11
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Percent
Unemployment Rate
Source: Bureau of Labor Statistics & Board of Governors via Haver Analytics
FOMC ProjectionSeptember
5.1%
Notes: FOMC projection is the median, range, and central tendency for the Q4 levels, from the September 2015 meeting. Red dots indicate median projections
3
5
7
9
11
13
15
17
19
3
5
7
9
11
13
15
17
19
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
9
Percent
September
Measures of Labor Utilization
Source: Bureau of Labor Statistics via Haver Analytics
U6: U5 + Involuntarily Part-Time
U5: U3 + Discouraged + Marginally Attached
U3: Official Unemployment Rate
57
58
59
60
61
62
63
64
65
66
67
68
57
58
59
60
61
62
63
64
65
66
67
68
1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
10
Percent of Population
September
Labor Force Participation
Source: Bureau of Labor Statistics via Haver Analytics
-2
-1
0
1
2
3
4
5
6
-2
-1
0
1
2
3
4
5
6
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
11
Year over Year % Change
Quarterly Change at Annual Rate
Post-War Average
Labor Productivity, Nonfarm Business
Source: Bureau of Labor Statistics via Haver Analytics
Q2 15 3.3%Q1 15 -1.1%Q4 14 -2.2%Q3 14 3.1%
Q20.6%
1
1.5
2
2.5
3
3.5
4
1
1.5
2
2.5
3
3.5
4
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
12
12 Month % Change
Average Hourly Earnings
Sep. 0.0%Aug. 0.4%Jul. 0.2%Jun. 0.0%
Monthly % Change
Source: Bureau of Labor Statistics via Haver Analytics
September2.20%
450
500
550
600
650
700
450
500
550
600
650
700
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
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Q2.
Household Net WorthPercent of disposable personal income
Source: Z.1 Financial Accounts of the United States via Haver Analytics
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-3
-2
-1
0
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5
6
-4
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-2
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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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Disposable Personal Income & Expenditures
Source: Bureau of Economic Analysis via Haver Analytics
12 Month % Change
Real Personal Consumption Expenditure
Real Disposable Personal Income
August
Note: Real disposable personal Income was adjusted to remove tax-induced income shifting near end of 2012.
June July AugustIncome 0.2 0.4 0.3Expenditures 0.1 0.3 0.4
Month over Month % Change
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
1.3
1.4
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
15
Average Annual New Home Sales:1990 through 1999
New Single-Family Home Sales
Source: Census Bureau via Haver Analytics
Millions of Homes
August0.55 mil.
16
-40
-30
-20
-10
0
10
20
30
40
-40
-30
-20
-10
0
10
20
30
40
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Percent change from previous quarter at annual rate
Q20.3%
Real Investment in Equipment
Source: Bureau of Economic Analysis via Haver Analytics
-8
-6
-4
-2
0
2
4
6
8
10
12
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-6
-4
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6
8
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12
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
17
Percent change from previous quarter at annual rate
Q28.6%
Real Investment in Intellectual Property
Source: Bureau of Economic Analysis via Haver Analytics
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75
80
85
90
95
100
105
110
115
120
125
130
135
140
75
80
85
90
95
100
105
110
115
120
125
130
135
140
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
2007 = 100
August
Industrial Production
Source: Board of Governors via Haver Analytics
Manufacturing
Mining
Overall
75
85
95
105
115
125
135
75
85
95
105
115
125
135
1980 1984 1988 1992 1996 2000 2004 2008 2012 2016
19
Exchange Value of the USD
Index, March 1973 = 100
Source: Board of Governors via Haver Analytics
Notes: Measured as the real broad trade-weighted exchange value of the United States Dollar.
September
-80
-70
-60
-50
-40
-30
-20
-10
0
-80
-70
-60
-50
-40
-30
-20
-10
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
20
Current $, Billions
Non-PetroleumBalance
Balance of International Trade
Source: Census Bureau via Haver Analytics
Petroleum Balance
Trade Balance
Note: Customs Value of Trade Balance
August-48.3 Bil.
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-1.5
-1
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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
August0.3%
FOMC Projection
Personal Consumption Expenditure Price Index12 Month % Change
Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics
2% Longer-run Target
Notes: FOMC projection is the median, range, and central tendency for Q4/Q4 percent changes, from the September 2015 meeting. Red dots indicate median projections.
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-1
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0.5
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2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
August1.3%
FOMC Projection
Core Personal Consumption Expenditure Price Index
12 Month % Change
Source: Bureau of Economic Analysis & Board of Governors via Haver Analytics
2% Longer-run Target
Notes: FOMC projection is the median, range, and central tendency for Q4/Q4 percent changes, from the September 2015 meeting. Red dots indicate median projections. Core PCE Price Index excludes expenditures on gasoline and food services.
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-1.5
-1
-0.5
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0.5
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-1.5
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1.5
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3.5
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2009 2010 2011 2012 2013 2014 2015 2016
October 2nd
5-Year
5-Year5 Years Ahead
TIPS Inflation Compensation
Source: Board of Governors Research Series via Haver Analytics
Percent
24
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
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0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Federal Funds Target Rate
October 9thPrimary Credit Rate
Monetary Policy Instruments
Percent
Source: Board of Governors via Haver Analytics
Federal Funds Rate Target Range
Interest Rate Paid on Reserves
25
FOMC Statement
Information received since the Federal Open Market Committee met in July suggests that economic activity is expanding at a moderate pace. Household spending and business fixed investment have been increasing moderately, and the housing sector has improved further; however, net exports have been soft. The labor market continued to improve, with solid job gains and declining unemployment. On balance, labor market indicators show that underutilization of labor resources has diminished since early this year. Inflation has continued to run below the Committee's longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation moved lower; survey-based measures of longer-term inflation expectations have remained stable.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term. Nonetheless, the Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate. The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced but is monitoring developments abroad. Inflation is anticipated to remain near its recent low level in the near term but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of declines in energy and import prices dissipate. The Committee continues to monitor inflation developments closely.
To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress--both realized and expected--toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.
Source: Board of Governors
September 17, 2015
26
Continued…The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.
When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.
Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Dennis P. Lockhart; Jerome H. Powell; Daniel K. Tarullo; and John C. Williams. Voting against the action was Jeffrey M. Lacker, who preferred to raise the target range for the federal funds rate by 25 basis points at this meeting.
Source: Board of Governors September 17, 2015
0
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3.5
2015 2016 2017 2018 2019 2020 2021 2022
27
Eurodollar FuturesPercent
Source: CME Group via Bloomberg
October 13, 2015
September 15, 2015
-1
0
1
2
3
4
5
-1
0
1
2
3
4
5
2015 2016 2017 2018 Longer run
28
Summary of Economic Projections: Federal Funds RatePercent
Source: Board of Governors
Note: Each dot in the chart represents the value of an FOMC participant’s judgment of the midpoint of the appropriate target range (or the appropriate target level) for the federal funds rate at the end of the calendar year. Projections made for the September 2015 meeting.
0
0.25
0.5
0.75
1
1.25
1.5
1.75
2
2.25
2.5
2.75
3
3.25
3.5
0
0.25
0.5
0.75
1
1.25
1.5
1.75
2
2.25
2.5
2.75
3
3.25
3.5
6 M 2 Yrs 3 Yrs 5 Yrs 7 Yrs 10 Yrs
September 15, 2015 October 9, 2015
29
Time to Maturity
Treasury Yield Curve
Percent
Source: Board of Governors via Haver Analytics