Ken Goldstein Economic Forecast slides
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Transcript of Ken Goldstein Economic Forecast slides
2013 FORECAST: A LOOK AHEADPuget Sound Economic Forecast
Ken GoldsteinEconomist
The Conference Board
www.conferenceboard.org© 2012 The Conference Board, Inc. |2
Ken Goldstein
WWW.CONFERENCE-BOARD.ORG
Slow Lane Now, Gets Better Later
www.conferenceboard.org© 2012 The Conference Board, Inc. |3
Overview:
Domestic Economy Building Momentum Slowly
Global Economy Buffeted by Euro-zone Crises and Asia/Pacific Moderation
(3.2% in 2012, 3% in 2013)
Food + Energy + Commodity + CONFIDENCE
Housing Drag finally letting up – as rental market heats up
Currency & Commodity Speculation, Given Volatility & Uncertainty in Stock, Bond, and Real Estate Markets
Energy Going Through at least Two Potentially Long-Term Structural Changes
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Global Economy Is Coming Back
Source: IMF, The Conference Board
2012 ‘13-16 ‘17-25 U.S. 2.1 2.4–1.9 2.1–1.7 Euro Area -0.3 2.4–1.3 1.9–0.9 Japan 2.0 2.1–1.4 1.6–0.9 Other Advanced Economies 2.4 3.7–2.4 2.7–1.4 Developing Asia (ex. China and India) 5.4 6.2–5.0 5.1–4.0 China 8.0 7.1–6.0 4.8–3.7 India 6.1 5.4–4.3 4.2–3.1
Latin America 3.4 4.3–2.8 3.8–2.3 Middle East 5.5 4.3–2.6 3.3–1.6 Africa 5.4 4.6–3.0 4.2–2.5 World Total 3.2 4.0–3.0 3.2–2.1
www.conferenceboard.org© 2012 The Conference Board, Inc. |5
-6,000-5,000-4,000-3,000-2,000-1,00001,0002,0003,0004,0005,000
-6%-5%-4%-3%-2%-1%0%1%2%3%4%5%
Q1:04 Q1:05 Q1:06 Q1:07 Q1:08 Q1:09 Q1:10 Q1:11 Q1:12
Change(Thous, YoY)
Percent change(YoY)
Employment non-farm(right side)
GDP
Q3:12
US Growth Supported by Demographics and Productivity
Source: BLS, The Conference Board
www.conferenceboard.org© 2012 The Conference Board, Inc. |6
-6,000-5,000-4,000-3,000-2,000-1,00001,0002,0003,0004,0005,000
-6%-5%-4%-3%-2%-1%0%1%2%3%4%5%
Q1:04 Q1:05 Q1:06 Q1:07 Q1:08 Q1:09 Q1:10 Q1:11 Q1:12
Change(Thous, YoY)
Percent change(YoY)
GDP
Employment(right side)
Q3:12
European Growth Limited by Slow Demographics and Low Productivity
Source: Euro stat, The Conference Board
www.conferenceboard.org© 2012 The Conference Board, Inc. |7
The Conference Board’s Leading Economic Indexes
Moderate Domestic Growth Ahead in a Slow Global Environment
Source: The Conference Board
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov2011 2012
U.S.A 0.3 0.6 0.0 0.7 0.2 -0.1 0.3 -0.5 0.4 -0.4 0.4 0.3 -0.2
MEXICO 1.2 -0.2 1.3 1.0 0.0 -0.7 -0.8 -0.6 1.4 -0.2 0.2 -0.3
U.K. -1.0 -0.7 0.6 0.8 1.0 0.1 -0.8 -0.4 0.0 0.1 0.1 -0.4
GERMANY -0.2 0.9 0.8 0.5 -0.1 -0.8 -0.7 -0.5 -0.3 -0.2 -0.6 0.0
FRANCE -0.2 0.3 -0.1 0.5 0.5 -0.1 -0.2 -0.3 0.4 0.5 0.7 -0.5
SPAIN -1.1 0.3 0.5 0.0 -0.9 -1.5 -0.6 0.3 -0.5 -0.1 0.3 1.0
JAPAN 0.2 0.1 0.2 1.5 1.1 -0.1 -1.1 -1.7 -0.9 -0.6 -0.5 -0.5
KOREA -0.7 0.3 0.3 1.8 0.1 -0.2 -1.1 -0.7 -0.4 -0.6 1.1 0.8
AUSTRALIA -1.1 -0.6 0.7 -0.3 -0.2 -1.2 0.9 0.6 -0.5 -1.0 -0.4 0.2
CHINA 0.6 0.6 2.0 1.0 0.7 0.9 1.2 0.2 0.8 1.8 0.2 1.6 1.1
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Developed World Struggling
Note: Shaded areas represent recessionsSource: The Conference Board
-25
-20
-15
-10
-5
0
5
10
15
20
25
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Jun.'12
6-month annualized percent change
US LEI
Asia LEIEuro Area LEI
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Consumer Expectations Remain Positive as Economy Grows Moderately
Note: Shaded areas represent recessions.Data as of November 2010 are based on surveys conducted by The Nielsen Company; data prior to that are based on surveys conducted by TNS.Source: The Nielsen Company, TNS, NBER, The Conference Board
0
40
80
120
160
200
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Index, 1985=100
Nov.'12
Expectation
Present Situation
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Slow 1st Half, Better 2nd Half
2012 2013 2014 2012 2013 2014 III Q* IV Q I Q II Q III Q IV Q I Q II Q ANNUAL ANNUAL ANNUAL
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Real GDP 3.1 0.9 1.4 1.5 2.4 2.7 2.3 2.3 2.2 1.8 2.4--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------CPI Inflation 2.3 3.9 1.9 2.1 2.2 2.2 2.1 2.2 2.2 2.4 2.2--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Real Consumer Spending 1.6 1.9 0.8 1.0 2.4 2.4 2.4 2.3 1.9 1.5 2.3--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Real Capital Spending -1.8 3.1 2.4 4.1 5.7 8.2 5.7 6.9 7.3 3.2 6.6--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Net Exports Bil. '00$ -395.2 -393.8 -385.8 -378.0 -376.9 -383.3 -388.8 -393.7 -403.0 -381.0 -397.0--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Industrial Production -0.4 1.0 1.4 1.0 2.4 2.4 2.6 2.4 3.7 1.3 2.4--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Unemployment Rate (%) 8.0 7.8 7.7 7.6 7.5 7.4 7.3 7.2 8.1 7.6 7.2--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------90 Day T-Bills (%) 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.09 0.10 0.1010 Yr Treas Bonds (%) 1.61 1.71 1.80 1.85 1.90 2.10 2.35 2.75 1.80 1.91 2.72--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------Exchange Rates$/EURO 1.26 1.30 1.32 1.31 1.30 1.28 1.26 1.24 1.29 1.30 1.23 Yen/$ 79 81 86 87 88 89 90 91 80 88 92 --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------*Actual Data
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0
1
2
3
4
0
2
4
6
8
10
12
14
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
$ per thousand cubic feet $ per gallon
Gasoline (right scale)
Natural Gas (left scale)
4Q '12
Price Split
Source: Federal Reserve Bank of St. Louis, Department of Energy, The Conference Board
www.conferenceboard.org© 2012 The Conference Board, Inc. |12
More Volatility in Europe
Source: The Conference Board
-2
-1
0
1
2
3
4
5
6
7
Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12
Financial Instability Index for the Euro Area
10/26/12
ECB announces LTROs Bankia nationalized
June EU summit
www.conferenceboard.org© 2012 The Conference Board, Inc. |13
Euro Up Now, But that’s temporary
Note: Shaded areas represent recessionsSource: FRB, The Conference Board
1.0
1.1
1.2
1.3
1.4
1.5
1.62003 2004 2005 2006 2007 2008 2009 2010 2011 2012
U Forecast
-Stdev
Trend Jan. '03 - Apr. '12
+Stdev
USD/EUR
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In A Panicky World – Flight To Safety
Note: Shaded areas represent recessionsSource: FRB, The Conference Board
75
80
85
90
95
100
105
110
115
120
125
130
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Y
+Stdev
-Stdev
Forecast
Trend Jan.'03 - Apr. '12
JPY/USD