U.S. and Virginia Economic Outlook€¦ · Construction Manufacturing Trade, Transportation &...
Transcript of U.S. and Virginia Economic Outlook€¦ · Construction Manufacturing Trade, Transportation &...
Sonya Ravindranath WaddellVice President and Economist, Regional and Community AnalysisResearch Department
U.S. and Virginia Economic OutlookVirginia Local Government Management AssociationFebruary 13, 2020
The views and opinions expressed herein are those of the author. They do not represent an official position of the Federal Reserve Bank of Richmond or the Federal Reserve System.
What is the Story?On the one hand….• U.S. economic growth by the numbers looks solid
– GDP is growing as anticipated—buoyed by consumer spending and residential investment
– Labor markets are tight– Sentiment indices have steadied
On the other hand….• Business investment remains soft• Reports of lingering uncertaintyAnd• The Virginia economy is growing, but continues to trail that of
the U.S. (and neighbors to the south)
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U.S. Gross Domestic Product: A decade of fairly steady GDP growth continues
Source: Bureau of Economic Analysis, Federal Reserve Board /Haver Analytics
4
Q4: 2019US: 2.1%
-6
-4
-2
0
2
4
6
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
% Change, SAAR
Employment: The economy continues to add jobs
Monthly ChangeJanuary: 225
December: 147November: 261
Source: Bureau of Labor Statistics/Haver Analytics
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The unemployment rate continues at historic lows
Source: Bureau of Labor Statistics, Federal Reserve Board of Governors/Haver Analytics
0
1
2
3
4
5
6
7
8
9
10
11
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
UnemploymentRate (Percent)
January 2020US: 3.6%
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University of Michigan Consumer Expectations
Source: University of Michigan via Haver Analytics
40
50
60
70
80
90
100
2009 2011 2013 2015 2017 2019
Index, Q1 1966=100
Dec
7
National Federation of Independent Business
80
85
90
95
100
105
110
80
85
90
95
100
105
110
2009 2011 2013 2015 2017 2019
Index, 1986=100
Dec
Source: NFIB via Haver Analytics
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Duke/CFO Survey
50
55
60
65
70
75
80
50
55
60
65
70
75
2009 2011 2013 2015 2017 2019
Index, 100 = Most Optimistic
Q4
Source: Duke/CFO via Haver Analytics
9
30
35
40
45
50
55
60
65
70
-40
-30
-20
-10
0
10
20
30
40
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
3-m
onth
ave
rage
Manufacturing Composite Index (Left Axis)
ISM Manufacturing (Right Axis)
Richmond Manufacturing Survey and ISM Manufacturing Survey
Our Fifth District manufacturing index has seen some rebound…
Source: The Federal Reserve Bank of Richmond/Institute of Supply Management
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…and our service sector index remains solid
30
35
40
45
50
55
60
65
70
-40
-30
-20
-10
0
10
20
30
40
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
3-m
onth
ave
rage
Services Revenue Index (Left Axis)
ISM Nonmanufacturing (Right Axis)
Richmond Service Sector Survey and ISM Nonmanufacturing Survey
Source: The Federal Reserve Bank of Richmond/Institute of Supply Management
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Payroll Employment
-6
-5
-4
-3
-2
-1
0
1
2
3
4
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
YoY % Chg (SA) U.S.Virginia
December 2019US: 1.4%VA: 1.1%
Source: Bureau of Labor Statistics/Haver Analytics
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Virginia Industry Structure
Source: Bureau of Labor Statistics/Haver Analytics
0.5
4.9
8.4
18.7
1.9
5.7
14.2
16.1
10.8
3.9
15.0
0.2
4.8
6.1
16.6
1.6
5.2
18.7
13.8
10.2
4.9
17.9
0 2 4 6 8 10 12 14 16 18 20
Natural Resources & Mining
Construction
Manufacturing
Trade, Transportation & Utilities
Information
Financial Activities
Professional & Business Services
Education & Health Services
Leisure & Hospitality
Other Services
Government
Employment Share (Percent)
December 2019 U.S.Virginia
14
Virginia Industry Growth
Source: Bureau of Labor Statistics/Haver Analytics
1.4
-2.8
2.0
0.4
0.4
0.4
1.4
1.9
2.7
2.3
1.4
0.7
1.1
5.1
0.5
1.4
-0.6
-2.5
3.6
1.3
3.1
4.2
0.0
-0.7-4 -3 -2 -1 0 1 2 3 4 5 6
Total
Natural Resources & Mining
Construction
Manufacturing
Trade, Transportation & Utilities
Information
Financial Activities
Professional & Business Services
Education & Health Services
Leisure & Hospitality
Other Services
Government
YoY % Chg (SA)
December 2019 U.S.Virginia
15
Virginia Industry Growth
Source: Bureau of Labor Statistics/Haver Analytics16
70
80
90
100
110
120
130
140
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Education & HealthServices
Leisure &Hospitality
Professional &Business Services
Financial Activities
Other Services
Total
Government
Trade,Transportation &UtilitiesConstruction
Manufacturing
Mining & Logging
Information
IndexDecember 2007 = 100
MSA Employment Growth
Source: Bureau of Labor Statistics/Haver Analytics
2.2
2.1
1.8
1.5
1.4
1.4
1.3
1.3
1.1
1.1
-0.1
-1 0 1 2 3
Winchester
Roanoke
Richmond
Harrisonburg
Charlottesville
U.S
Northern Virginia
Blacksburg
Virginia
Virginia Beach
Lynchburg
YoY% Change (SA)
December 2019
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Virginia MSA Total Employment
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Source: Bureau of Labor Statistics/Haver Analytics
Charlottesville
HarrisonburgBlacksburg
Northern VirginiaRichmond
Roanoke
Staunton
Virginia Beach
Winchester
0.0
0.5
1.0
1.5
2.0
2.5
0.0 0.5 1.0 1.5 2.0 2.5
10-y
ear A
vera
ge A
nnua
l %
Cha
nge
YoY % Change
Bubble size: Total Employment - December 2019
Virginia Unemployment Rate
0
1
2
3
4
5
6
7
8
9
10
11
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
PercentU.S.Virginia
Source: Bureau of Labor Statistics/Haver Analytics
December 2019US: 3.5%VA: 2.6%
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Population growth is slower (or even negative!)
Source: U.S Census Bureau
-1.0
0.0
1.0
2.0
2011 2012 2013 2014 2015 2016 2017
YoY Population Chg
Rural (U.S)Urban (U.S)Rural (VA)Urban (VA)
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Job growth is slower too…
Source: Bureau of Labor Statistics
-1.0
0.0
1.0
2.0
3.0
4.0
2015 2016 2017 2018
YoY Employment Chg Rural (U.S)
Urban (U.S)
Rural (VA)
Urban (VA)
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Summary• The national picture continues to look good with growth in
GDP, tight labor markets, rebound in residential investment, and steadying of consumer sentiment.
• However, business investment remains weak, sentiment among manufacturers is still less upbeat than that of service providers, and uncertainty remains on the horizon.
• The Virginia economy continues to grow, but more slowly than that of the U.S.
• Economic opportunity is not distributed evenly across the Commonwealth or the country. Understanding what underlies those differences will enable us to develop a strategy to maximize our potential as an economy, which is a critical function of the Federal Reserve System.
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5th District Business Conditions Surveys
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Each month we ask for feedback from business executives located in our District. Respondents provide information on current business activity and expected changes for the next six months.
These data paint a picture of industry trends and help the Federal Reserve Bank of Richmond to be better informed about business conditions in our District. (Washington, D.C., Maryland, W.Virginia, Virginia, N. Carolina, and S.Carolina)
Your business is an integral part of our Fifth District community and we hope you will contribute.
If you would like to sign up please contact:[email protected]
804-697-8702
View our survey data and reports online:https://www.richmondfed.org/research/regional_econo
my/surveys_of_business_conditions