National, State and Local Economic Outlook January 6th, 2009.

National, State and Local Economic Outlook

January 6th, 2009

The Business Cycle

REFERENCE DATES DURATION IN MONTHS

Peak Trough Contraction Expansion

Quarterly dates are in parentheses Peak to TroughPrevious trough

to this peak

December 1969(IV)

November 1970 (IV) 11 106

November 1973(IV)

March 1975 (I) 16 36

January 1980(I) July 1980 (III) 6 58

July 1981(III) November 1982 (IV) 16 12

July 1990(III) March 1991(I) 8 92

March 2001(I) November 2001 (IV) 8 120

December 2007(IV)

?? ?? 73

Recent Business Cycle Data

REFERENCE DATES DURATION IN MONTHS

Average, all cycles:

Contraction Expansion

Peak to TroughPrevious Trough to

Peak

1854-2001 (32 cycles) 17 38

1854-1919 (16 cycles) 2227

1919-1945 (6 cycles) 1835

1945-2001 (10 cycles) 1057

Historical Business Cycle Data

U.S. Forecast

U.S. Currently in a Moderate Recession (not depression)

12 months and counting…

Recession: 2007Q4 to 2009Q2/Q3

Housing, credit freeze, turmoil in financial markets and volatile energy prices have created an environment that is toxic for economic growth.

U.S. Forecast

Short-run threat of inflation subsided:

Energy prices – bubble has burst

Inflation gone, but not forgotten

Extremely stimulative fiscal and monetary policies

Once recovery takes root prices could rapidly rise

U.S. Forecast

Fed has cut target interest rate to near zero Quantitative easing

Another stimulus package - $500 billion, $750 billion or even $1 trillion?

Stimulus should be a cocktail of drugs to fight the recession

Rebate Checks Infrastructure Investment incentive

Treasuries the latest bubble?

U.S. Economic Outlook From IEC 4th Quarter 2008 Forecast

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

Gross Domestic Product

% Chg, Annual Rate2.8 -0.5 -3.5 -2.0 -0.4 0.5

Consumer Price Index% Chg, Annual Rate

4.9 6.6 -8.1 -2.4 -1.5 1.3

Oil - WTI ($ per barrel)

123.8 118.1 59.8 53.8 47.3 48.2

Total Consumption% Chg, Annual Rate

1.2 -3.2 -3.7 0.7 2.0 3.5

111009080706050403020100999897

8.5

8.0

7.5

7.0

6.5

6.0

5.5

5.0

2.5

2.0

1.5

1.0

0.5

30-Year Mortgage Rates and Housing Starts(Mortgage rates - Left axis, %)

30-Year Fixed Mortgage RateHousing Starts - Millions

111009080706050403020100999897

8.0

6.0

4.0

2.0

0.0

-2.0

-4.0

-6.0

Real GDP Growth and Federal Funds Rate(%)

Quarterly Growth Rate Real GDP Fed Funds Rate

111009080706050403020100999897

18.0

17.0

16.0

15.0

14.0

13.0

12.0

11.0

Manufacturing Employment(Millions)

Manufacturing Employment

111009080706050403020100999897

400.0

200.0

0.0

-200.0

-400.0

-600.0

-800.0

-1000.0

-1200.0

Twin Deficits(Billions of Dollars)

U.S. Federal Budget SurplusCurrent Account

111009080706050403020100999897

11.0

10.0

9.0

8.0

7.0

6.0

5.0

4.0

Automobile and Light Truck Sales(Millions Vehicles)

Auto SalesLight Truck Sales

111009080706050403020100999897

115.0

110.0

105.0

100.0

95.0

90.0

85.0

Industrial Production(2002=100)

Industrial Production

111009080706050403020100999897

140.0

135.0

130.0

125.0

120.0

Total Nonfarm Payroll Employment(Millions)

Total Nonfarm Employment

111009080706050403020100999897

9.0

8.0

7.0

6.0

5.0

4.0

3.0

Civilian Unemployment Rate(%)

Unemployment Rate

A look at the Florida housing data:

November 2008 Snapshot

Realtor Sales Median Sales Price

Region or MSANovember

2008November

2007%Chg

November2008

November2007

%Chg

STATEWIDE 8,571 8,269 4 $158,300 $217,000 -27

Orlando 1,277 1,108 15 $167,900 $239,000 -30

Panama City 48 47 2 $190,000 $192,500 -1

Fort Walton Beach 127 155 -18 $191,300 $199,300 -4

Jacksonville 545 619 -12 $150,000 $178,200 -16

Tallahassee 100 137 -27 $170,000 $201,400 -16

Lakeland-Winter Haven 211 235 -10 $127,400 $158,900 -20

Florida Sales Report – November 2008Single-Family, Existing Homes

Florida Sales Report – November 2008Single-Family, Existing Homes



2008November

2007%Chg

November2008

November2007

%Chg

STATEWIDE 8,571 8,269 4 $158,300 $217,000 -27

Orlando 1,277 1,108 15 $167,900 $239,000 -30

Fort Myers-Cape Coral 600 365 64 $106,100 $228,100 -53

Marco Island 25 14 79 $262,500 $500,000 -48

Punta Gorda 174 154 13 $97,700 $177,300 -45

Miami 366 263 39 $224,700 $359,300 -37

Fort Pierce-Port St. Lucie 318 230 38 $130,500 $206,300 -37



2008November

2007%Chg

November2008

November2007

%Chg

STATEWIDE 2,278 2,474 -8 $130,600 $185,600 -30

Orlando 135 125 8 $76,100 $140,600 -46

Pensacola 21 26 -19 $375,000 $225,000 67

Panama City 17 21 -19 $258,300 $260,700 -1

Jacksonville 60 78 -23 $131,400 $135,800 -3

Gainesville 14 36 -61 $133,300 $146,700 -9

Ocala 3 2 50 $95,000 $108,000 -12

Florida Sales Report – November 2008Existing Condominiums



2008November

2007%Chg

November2008

November2007

%Chg

STATEWIDE 2,278 2,474 -8 $130,600 $185,600 -30

Orlando 135 125 8 $76,100 $140,600 -46

Miami 308 297 4 $172,600 $264,700 -35

Fort Pierce-Port St. Lucie 49 44 11 $110,000 $170,000 -35

Melbourne-Titusville-Palm Bay

67 67 — $113,800 $172,500 -34

Fort Lauderdale 442 430 3 $109,400 $166,700 -34

Florida Sales Report – November 2008Existing Condominiums

A look at the housing data:

January 1994 toNovember 2008

Florida Forecast

Scenario for Florida Economy:

Credit freeze further delayed real estate recovery

Recovery will finally start to take root in 2010

Economy s-l-o-w-l-y gains momentum

Short and Long run demographics of the state have changed

111009080706050403020100999897

10%

8%

6%

4%

2%

0%

-2%

-4%

Florida Real Gross State Product(% change year ago)

111009080706050403020100999897

9.0%

8.0%

7.0%

6.0%

5.0%

4.0%

3.0%

Florida & U.S. Unemployment Rate(%)

FL Unemployment RateU.S. Unemployment Rate

111009080706050403020100999897

300.0

250.0

200.0

150.0

100.0

50.0

0.0

8.5%

8.0%

7.5%

7.0%

6.5%

6.0%

5.5%

5.0%

Florida Housing Starts(thousands)

Total Private Housing Starts30 year Mortgage Rates

111009080706050403020100999897

8500.0

8000.0

7500.0

7000.0

6500.0

6000.0

Florida Employment(Thousands)

Wage & Salary Employment

111009080706050403020100999897

700.0

650.0

600.0

550.0

500.0

450.0

400.0

350.0

Florida Construction Employment(Thousands)

111009080706050403020100999897

1400.0

1300.0

1200.0

1100.0

1000.0

900.0

800.0

700.0

Florida Professional & Business Services Employment

(Thousands)

111009080706050403020100999897

550.0

500.0

450.0

400.0

350.0

Florida Financial Activities Employment

(Thousands)

111009080706050403020100999897

190.0

180.0

170.0

160.0

150.0

140.0

Florida Information Employment(Thousands)

RegionPopulation Growth

Average % Chg Rank

Florida 0.9 ---

Deltona 0.9 6

Gainesville 1.0 5

Jacksonville 1.3 4

Lakeland 1.9 2

Miami 0.1 9

Naples 1.3 4

Ocala 2.2 1

Orlando 1.6 3

Palm Bay 0.7 7

Pensacola 0.4 8

Tallahassee 0.9 6

Tampa 0.9 6

2009-2011 Averages;Q4 2008 Forecast

RegionEmployment Growth

Average % Chg Rank

Florida -0.4 ---

Deltona -0.4 2

Gainesville -0.6 4

Jacksonville -0.9 6

Lakeland -0.9 6

Miami -0.9 6

Naples -0.4 2

Ocala -0.5 3

Orlando 0.2 1

Palm Bay -0.8 5

Pensacola -0.8 5

Tallahassee -1.0 10

Tampa -0.6 4


SectorOrlando

% Avg. Ann. Gr.

Educ.-Health Serv. 3.7

Other Serv. 2.3

Prof. & Bus. Serv. 0.7

Trade, Trans., Util. 0.3

State & Local 0.3

Leisure 0.2

Federal 0.2

Financial 0.0

Information -1.3

Manufacturing -4.5

Const. & Min. -6.1


Sean M. SnaithSean M. Snaith, Ph.D.Director Director

Institute for Economic CompetitivenessInstitute for Economic Competitiveness

(407) 823-1453(407) 823-1453

[email protected]@bus.ucf.edu

WWW.IEC.UCF.EDUWWW.IEC.UCF.EDU

Thank you

National, State and Local Economic Outlook January 6th, 2009.

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Transcript of National, State and Local Economic Outlook January 6th, 2009.