emerging growth: mid-decade economic trends

Emerging Growth: Mid-Decade Economic Trends

University of North TexasCenter for Economic Development and Research

http://cedr.unt.edu

July 2014

Source: Bureau of Economic Analysis

U. S. Real GDP GrowthAnnual Percentage Change

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'97

'98

'99

'00

'01

'02

'03

'04

'05

'06

'07

'08

'09

'10

'11

'12

'13

-4%

-2%

0%

2%

4%

6%

8% 2013:1.9%

Source: Bureau of Economic Analysis

Real Economic GrowthGross domestic product

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q-6%

-4%

-2%

0%

2%

4%

6%

2010 2011 2012 2013 ’14

1Q 2014:-2.9%

Source: U.S. Bureau of Labor Statistics

2012 2013 2014

Nonfarm PayrollsMonthly change, in thousands

J J A S O N D J F M A M J J A S O N D J F M A M J-400

-300

-200

-100

0

100

200

300

400

June 2014:288,000

Nonfarm Payrolls 2008-PresentMonthly change, in thousands

Jan-08

FMAMJJASONDJan-09

FMAMJJASONDJan-10

FMAMJJASONDJan-11

FMAMJJASONDJan-12

FMAMJJASONDJan-13

FMAMJJASONDJan-14

FMAMJ-900-800-700-600-500-400-300-200-100

0100200300400500

Source: U.S. Bureau of Labor Statistics

2012 2013 2014

J J A S O N D J F M A M J J A S O N D J F M A M J0

25

50

75

100

Source: Challenger, Gray and Christmas

Human SacrificeNumber of layoff announcements in the U. S. (in thousands)

Jun ’14:31,434

2008

2009

2010

2011

2012

2013

2014

0255075

100125150175200225250

Source: Challenger, Gray and Christmas

Human Sacrifice 2008-PresentNumber of layoff announcements in the U. S. (in thousands)

U. S. Jobless RateSeasonally adjusted

J J A S O N D J F M A M J5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

June ’14:6.1%

Source: U.S. Bureau of Labor Statistics

2013 2014

M J J A S O N D J F M A M$13.0

$13.5

$14.0

$14.5

$15.0

Source: U.S. Department of Commerce; Bureau of Economic Analysis

May ’14:$14.6 trillion

2013 2014

Personal IncomeTotal personal income in trillions of dollars, before taxes, at seasonally adjusted annual rates

20002001

20022003

20042005

20062007

20082009

20102011

20122013

$8.0

$9.0

$10.0

$11.0

$12.0

$13.0

$14.0

$15.0

Source: U.S. Department of Commerce;Bureau of Economic Analysis

Personal Income 2000-13Total personal income in trillions of dollars, before taxes, at seasonally adjusted annual rates

M J J A S O N D J F M A M$10.0

$10.5

$11.0

$11.5

$12.0

Source: U.S. Department of Commerce; Bureau of Economic Analysis

2013 2014

Personal ConsumptionIn trillions

May ’14:$11.8 trillion

20002001

20022003

20042005

20062007

20082009

20102011

20122013

$6.0

$7.0

$8.0

$9.0

$10.0

$11.0

$12.0

Source: U.S. Department of Commerce; Bureau of Economic Analysis

Personal Consumption 2000-13In trillions

J J A S O N D J F M A M J$350

$375

$400

$425

$450

Source: U.S. Commerce Department

June 2014:$439.9 billion

2013 2014

Retail SalesTotal retail sales in billions of dollars, seasonally adjusted

2007

2008

2009

2010

2011

2012

2013

2014

$250

$300

$350

$400

$450

Source: U.S. Commerce Department

Retail Sales 2007-PresentTotal retail sales in billions of dollars, seasonally adjusted

2012 2013 201492

94

96

98

100

102

104

106

Source: Federal Reserve Board

June 2014:103.9Industrial Production

Index, 2007=100, seasonally adjusted

Source: U.S. Department of Commerce

Construction SpendingIn billions of dollars, seasonally adjusted

M J J A S O N D J F M A M$700

$750

$800

$850

$900

$950

$1,000

2013 2014

May 2014:$956.1 billion

Source: Commerce Department

Construction Spending 2007-PresentIn billions of dollars, seasonally adjusted

2007

2008

2009

2010

2011

2012

2013

2014

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

Sources: U.S. Department of Commerce; U.S. Department of H.U.D.; U.S. Census Bureau

Housing StartsNew private housing starts during the month, in thousands, at seasonally adjusted annual rates.

J J A S O N D J F M A M J0

200

400

600

800

1,000

1,200

2013 2014

June ’14:893,000

Housing Starts 2000-13New private housing starts during the month, in thousands, at seasonally adjusted annual rates.

20002001

20022003

20042005

20062007

20082009

20102011

20122013

0

500

1,000

1,500

2,000

2,500

Sources: U.S. Department of Commerce; U.S. Department of H.U.D.; U.S. Census Bureau

Sources: Dallas Morning News; Residential Strategies

Dallas-Fort Worth Home Starts (in thousands)

'04 '05 '06 '07 '08 '09 '10 '11 '12 '130

10

20

30

40

50

60

43.8

20.8

Sources: Dallas Morning News; National Association of Home Builders

Dallas-Ft. Worth Home Permits Issued(in thousands)

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '130

10

20

30

40

50

60

36.2

20.8

49.6

M J J A S O N D J F M A M J J A S O N D J F M A M300

400

500

600

New-Home SalesSingle-family homes (in thousands)

May 2014:504,000

2012 2013 2014

Sources: U.S. Department of Commerce; U.S. Department of H.U.D.; U.S. Census Bureau

Source: The National Association of Realtors

Existing-Home SalesAnnual rate, in millions of dwelling units.

2012

2013

2014

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

May 2014:4.89 million

2000:Q1 2013:Q2 2013:Q3 Low Point Date of Low PointUnited States 62.8 69.3 64.5 40.4 2006 : Q3Los Angeles 40.2 28.3 21.1 1.8 2006 : Q3New York 42.1 29.8 23 5.1 2006 : Q3/Q4Miami 58.8 57.8 54.5 10 2007 : Q1Austin 57.5 64.2 62.9 49.9 2000 : Q4Dallas 65.3 63.4 60.4 53.7 2007 : Q3Houston 66.2 64 61.5 47.4 2007 : Q3San Antonio 63.3 68.7 65.7 46.5 2006 : Q3Source: NAHB - Wells Fargo Housing Opportunity Index

Lower Prices and Interest Rates Helping Housing Affordability

(Percent of homes sold for which the median family income could qualify)

Original Slide provided by K. Phillips, FRB-Dallas; Updated by CEDR

ProductivityNonfarm business productivity, percent change from previous quarter at annual rate, seasonally adjusted

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q-4%

-2%

0%

2%

4%

6%

8%

10%1Q 2014:

-3.2%

2010 2011 2012 2013 ’14

Source: U.S. Bureau of Labor Statistics

Producer PricesPercentage change from previous month for final demand goods, seasonally adjusted.

J J A S O N D J F M A M J-1.0%

-0.5%

0.0%

0.5%

1.0%

2013 2014

Source: U.S. Bureau of Labor Statistics

June 2014:0.4%

0 0

Consumer PricesPercentage change, month to month (seasonally adjusted)

J J A S O N D J F M A M J-1.0%

-0.5%

0.0%

0.5%

1.0%

2013 2014

Source: U.S. Bureau of Labor Statistics

June 2014:0.3%

0

Source: The Conference Board

Consumer Confidence IndexFrom a monthly survey of 5,000 U. S. households, 1985 = 100

2013 2014

June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June20

30

40

50

60

70

80

90

June 2014:85.2

Consumer Confidence: 2007-Present From a monthly survey of 5,000 U. S. households, 1985 = 100

2007

2008

2009

2010

2011

2012

2013

2014

2030405060708090

100110120

Source: The Conference Board

Source: The Conference Board

Leading IndicatorsIndex of 10 indicators designed to “lead,” or predict overall economic activity; 2004 = 100.

J J A S O N D J F MA M J J A S O N D J F MA M J J A S O N D J F MA M J90

94

98

102

106

110

June 2014:102.2

2011 2012 2013 2014

Things to Worry About

Pace of job growth Unfunded pension liabilities European sovereign default Corporate and consumer debt Federal Deficits/Debt Social Security / Medicare / Healthcare impact on taxes Political gridlock Environmental regulations Market volatility

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-$1,900

-$1,600

-$1,300

-$1,000

-$700

-$400

-$100

$200

Source: Congressional Budget Office

Budget DeficitIn billions of dollars

2012: -$1.09 trillion2013: -$679.5 billion2014 Projected: -$492 billion2015 Projected: -$469 billion2016 Projected: -$536 billion

Source: U.S. Department of Commerce

International Goods & Services Trade DeficitBillions of dollars, seasonally adjusted. Import figures exclude shipping and insurance.

M J J A S O N D J F M A M$0

$10

$20

$30

$40

$50

$60

$70

2013 2014

May 2014:$44.4 billion

Source: Federal Reserve Board

Household Net WorthIn trillions

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q0.0

20.0

40.0

60.0

80.0

100.0

2010 2011 2012 2013 ’14

1Q 2014:$81.8 trillion

Sources: Administrative Office of the U.S. Courts

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'07

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'13-0.3

0.0

0.3

0.6

0.9

1.2

1.5

1.8

2.1

Personal Bankruptcy FilingsFiscal Years ending Sept. 30 (in millions)

Business Bankruptcies

1999 37,884 2007 28,322

2000 35,472 2008 43,546

2001 40,099 2009 60,837

2002 38,540 2010 56,282

2003 35,037 2011 47,806

2004 34,317 2012 40,075

2005 39,201 2013 33,212

2006 19,695 --- ---

Sources: Administrative Office of the U.S. Courts

M J J A S O N D J F M A M J J A S O N D J F M A M0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%

Source: U.S. Department of Commerce; Bureau of Economic Analysis

May ’14:4.8%

2012 2013 2014

Savings RateAs Percentage of Disposable Personal Income

20002001

20022003

20042005

20062007

20082009

20102011

20122013

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%

Source: U.S. Department of Commerce; Bureau of Economic Analysis

Savings Rate 2000-2013As Percentage of Disposable Personal Income

Longest Recession Since 1933Ended June 2009

Aug'29…May'37…Feb'45…Nov'48…

Jul'53…Aug'57…Apr'60…Dec'69…Nov'73…Jan'80…Jul'81…Jul'90…

Mar'01…Dec'07…

0 5 10 15 20 25 30 35 40 45 50

4313

811

108

1011

166

1688

19

Federal Reserve Bank Dallas

TXLI ComponentsChanges Mar-Apr-May

Source: Federal Reserve Bank Dallas

Average Weekly Hours

Texas Stock Index

Well Permits

US Leading Index

Net Change in Texas Leading Index

-0.5 0.0 0.5 1.0 1.5 2.0 2.5

0.16

-0.17

0.20

0.13

0.08

0.01

0.56

0.30

1.27

Last Data Entry: May 2014Source: Federal Reserve Bank of Dallas

1981198319851987198919911993199519971999200120032006200820102012201485

95

105

115

125

135

Texas Leading Index 1981-PresentMonthly, Seasonally Adjusted, 1987=100

Source: Texas Workforce Commission

Unemployment Rates: U.S., Texas, and D/FW Metro

Jun '11

Jun '12

Jun '13

Jun '14

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%Texas U.S.

U. S. & Texas Seasonally Adjusted *D/FW not Seasonally Adjusted

U. S. June 2014 = 6.1%Texas June 2014 = 5.1%D/FW June 2014 = 5.4%

Source: Texas Workforce Commission

Ft. Worth-Arlington MSANonagricultural Employment

June 2013 June 2014 % Chng

Total Non-Farm 924,000 948,100 2.61%Mining, Logging, Construction 63,100 65,800 4.28%Manufacturing 92,600 94,200 1.73%Wholesale Trade 42,100 45,700 8.55%Retail Trade 101,500 102,000 0.49%Transportation, Warehousing, Utilities 66,200 67,800 2.42%Information 13,700 12,700 -7.30%Financial Activities 55,000 52,100 -5.27%Professional & Business Services 104,000 112,400 8.08%Education & Health Services 117,700 118,800 0.93%Leisure & Hospitality 105,100 109,200 3.90%Other Services 36,300 37,300 2.75%Government 126,700 128,300 1.26%

Dallas-Plano-Irving MDNonagricultural Employment

June 2013 June 2014 % Chng

Total Non-Farm 2,176,500 2,264,500 4.04%Mining, Logging, Construction 113,300 125,000 10.33%Manufacturing 166,400 163,400 -1.80%Wholesale Trade 126,100 134,700 6.82%Retail Trade 218,100 223,400 2.43%Transportation, Warehousing, Utilities 80,500 86,700 7.70%Information 65,700 68,500 4.26%Financial Activities 199,300 202,100 1.40%Professional & Business Services 379,700 411,400 8.35%Education & Health Services 264,400 273,900 3.59%Leisure & Hospitality 221,500 227,700 2.80%Other Services 76,600 76,500 -0.13%Government 264,700 271,200 2.46%

Source: Texas Workforce Commission

Sales and Use Tax Allocations

2010 2011 2012 2013% Chg 12-13

Allen 24,606,228 27,499,534 29,874,634 31,856,091 6.63%

Arlington 83,143,848 86,127,967 88,941,229 94,043,810 5.74%

Dallas 204,732,898 215,394,908 232,445,766 242,456,290 4.31%

Fort Worth 100,569,555 105,424,832 112,745,846 118,919,449 5.48%

Frisco 40,303,106 44,280,590 49,889,488 58,676,772 17.61%

Plano 58,888,948 66,325,563 68,410,251 69,804,509 2.04%

Source: Texas Comptroller of Public Accounts

Conclusions

The US recession is technically over.Employment recovery may not strengthen before mid-

2013 Financial sector risk Texas has performed better than nation

We’ve been “lucky puppies” Market / consumer confidence is major headwind Political failure is hurting growth

Address deficit, reform taxes, address market volatility Housing market will start recovery Local job market growing

Questions?

Contact info:

tclower@unt.edu940-565-4049

http://cedr.unt.edu