arbor us economic data book 2014 q4

U.S. Economic Data BookQ4 2014

ARBOR.COM • 1.800.ARBOR.10

U.S. Economic Data Book

ARBOR.COM • 1.800.ARBOR.10 1

Table of Contents

Page

Headlines ............................................................................. 2

Employment ............................................................................. 3

Employment by State ............................................................................. 4

Unemployment Rate ............................................................................. 5

Average Hourly Earnings ............................................................................. 6

Consumer Price Index ............................................................................. 7

Gross Domestic Product ............................................................................. 8

Economic Projections ............................................................................. 9

Select Interest Rates ............................................................................. 10

S&P/Case‐Shiller Home Price Index ............................................................................. 11

Retail Sales ............................................................................. 12



Headlines

Total non‐farm payroll employment rose by 295,000 in February, compared with an average monthly gain of 266,000 over the prior 12 months.

Both the unemployment rate (5.5%) and the number of unemployed persons (8.7 million) edged down in February. Over the year, the unemployment rate and the number of unemployed persons were down by 1.2% and 1.7 million, respectively.

Average hourly earnings for all employees in the U.S. was $24.78 in February, an increase from the $24.75 average during January. Over the last 12 months, average hourly earnings increased 2.0%.

The Consumer Price Index declined 0.7% in January. Over the last 12 months, the all items index decreased 0.2%.

Gross domestic product (GDP) increased at an annual rate of 2.2% in the fourth quarter of 2014.



Source: U.S. Bureau of Labor Statistics

Employment Growth

Total non‐farm payroll employment rose by 295,000 in February, compared with an average monthly gain of 266,000 over the prior 12 months. Job gains occurred in food services and drinking places, professional and business services, construction, health care, and in transportation and warehousing. Employment in mining declined over the month.

Total non‐farm, 12‐month percent change, seasonally adjusted

‐6.0%

‐4.0%

‐2.0%

0.0%

2.0%

4.0%

Feb‐05 Feb‐06 Feb‐07 Feb‐08 Feb‐09 Feb‐10 Feb‐11 Feb‐12 Feb‐13 Feb‐14 Feb‐15

U.S. Recession United States



Employment Growth by StateTotal non‐farm, 12‐month percent change, seasonally adjusted





Unemployment Rate

Both the unemployment rate (5.5%) and the number of unemployed persons (8.7 million) edged down in February. Over the year, the unemployment rate and the number of unemployed persons were down by 1.2% and 1.7 million, respectively. Among the major worker groups, the unemployment rate for teenagers decreased by 1.7% to 17.1% in February.

Ages 16 years and over, seasonally adjusted

0.0%

2.4%

4.8%

7.2%

9.6%

12.0%





Source: Arbor Commercial Mortgage, U.S. Bureau of Labor Statistics

Average Hourly EarningsTotal private, seasonally adjusted

$20.00

$21.50

$23.00

$24.50

$26.00

$27.50

Mar‐06 Mar‐07 Mar‐08 Mar‐09 Mar‐10 Mar‐11 Mar‐12 Mar‐13 Mar‐14 Mar‐15

U.S. Recession United States Hypothetical 3.5% Growth

Average hourly earnings for all employees in the U.S. was $24.78 in February, an increase from the $24.75 average during January.

Over the last 12 months, average hourly earnings increased 2.0%.

The Economic Policy Institute suggests wages should normally go up 3.5 to 4.0% per year, which is in line with the growth rate measured prior to the recession.

Over the last five years, earnings have grown only 2.0% per year on average.

If wages had grown at a hypothetical 3.5% annual rate from the end of the start in December 2007 to now, average hourly earnings would be at $27.06 or 9.2% higher than the February rate of $24.78.




Consumer Price Index

The Consumer Price Index declined 0.7% in January. Over the last 12 months, the all items index decreased 0.2%. The energy index fell 9.7% as the gasoline index fell 18.7% in January, the sharpest in a series of seven consecutive declines. The gasoline decrease was overwhelmingly the cause of the decline in the all items index, which would have risen 0.1% had the gasoline index been unchanged.

All items, 12‐month percent change, seasonally adjusted, 1982‐84=100

‐3.0%

‐1.0%

1.0%

3.0%

5.0%

7.0%

Jan‐05 Jan‐06 Jan‐07 Jan‐08 Jan‐09 Jan‐10 Jan‐11 Jan‐12 Jan‐13 Jan‐14 Jan‐15

U.S. Recession United States Federal Reserve Inflation Target



Source: U.S. Bureau of Economic Analysis

Gross Domestic Product

Gross domestic product (GDP) increased at an annual rate of 2.2% in the fourth quarter of 2014. In the third quarter, GDP increased 5.0%. The increase in GDP in the fourth quarter reflected positive contributions, including from personal consumption expenditures, non‐residential fixed investment and exports, that were partly offset by a negative contribution from federal government spending.

Quarterly percent change, based on current dollars

‐10.0%

‐6.0%

‐2.0%

2.0%

6.0%

10.0%

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

4Q07

1Q08

2Q08

3Q08

4Q08

1Q09

2Q09

3Q09

4Q09

1Q10

2Q10

3Q10

4Q10

1Q11

2Q11

3Q11

4Q11

1Q12

2Q12

3Q12

4Q12

1Q13

2Q13

3Q13

4Q13

1Q14

2Q14

3Q14

4Q14

United States 10‐Year Average



Economic Projections of Federal Reserve Board Members and Federal Reserve Bank PresidentsAs of December 2014, central tendency

Source: Board of Governors of the Federal Reserve System

2014 2015 2016 2017 Longer run

Change in Real GDP 2.3% to 2.4% 2.6% to 3.0% 2.5% to 3.0% 2.3% to 2.5% 2.0% to 2.3%

Unemployment Rate 5.8% 5.2% to 5.3% 5.0% to 5.2% 4.9% to 5.3% 5.2% to 5.5%

PCE Inflation 1.2% to 1.3% 1.0% to 1.6% 1.7% to 2.0% 1.8% to 2.0% 2.0%

Core PCE Inflation 1.5% to 1.6% 1.5% to 1.8% 1.7% to 2.0% 1.8% to 2.0%

“The labor market improved further during the second half of last year and into early 2015, and labor market conditions moved closer to those the Federal Open Market Committee (FOMC) judges consistent with its maximum employment mandate. Since the middle of last year, monthly payrolls have expanded by about 280,000 on average and the unemployment rate has declined nearly 0.5 percentage points on net. Nevertheless, a range of labor market indicators suggest that there is still room for improvement. In particular, at 5.7 percent, the unemployment rate is still above most FOMC participants' estimates of its longer‐run normal level, the labor force participation rate remains below most assessments of its trend, an unusually large number of people continue to work part time when they would prefer full‐time employment, and wage growth has continued to be slow.”

‐ Board of Governors of the Federal Reserve System’s Monetary Policy Report submitted to the Congress on Feb. 24, 2015



Source: Board of Governors of the Federal Reserve System, ICE Benchmark Administration

Select Interest Rates

To support continued progress toward maximum employment and price stability, the Federal Open Market Committee (FOMC) reaffirmed its view that the current 0.00 to 0.25% target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress toward its objectives of maximum employment and 2%inflation.

Monthly, not seasonally adjusted

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%


U.S. Recession 10‐Year Treasury Bank Prime Loan Rate Federal Funds Rate LIBOR 3‐Month U.S. Dollar



Source: S&P Dow Jones Indices LLC

S&P/Case‐Shiller Home Price Index

The 20‐City Composite gained 4.5% year‐over‐year. in December The fastest gains were in San Francisco and Miami, where prices rose 9.3% and 8.4% over the last 12 months. Twelve cities, including Cleveland, Denver, and Seattle, saw prices rise faster in the year to December than a month earlier. Las Vegas led the declining annual returns with 6.9%, down from 7.7% annually.

Monthly, seasonally adjusted, January 2000 = 100

100

130

160

190

220

250

Dec‐04 Dec‐05 Dec‐06 Dec‐07 Dec‐08 Dec‐09 Dec‐10 Dec‐11 Dec‐12 Dec‐13 Dec‐14

U.S. Recession 20‐City Composite



Source: U.S. Bureau of the Census

Retail and Food Services Sales

Advance estimates of U.S. retail and food services sales for February, adjusted for seasonal variation and holiday and trading‐day differences, but not for price changes, were $437.0 billion, a decrease of 0.6% from the previous month, but up 1.7% above February 2014. Total sales for the December 2014 through February 2015 period were up 2.9% from the same period a year ago.

Monthly, seasonally adjusted, billions

$300

$340

$380

$420

$460

$500



ARBOR.COM • 1.800.ARBOR.10

About Us

Founded by Chairman and CEO Ivan Kaufman, Arbor Commercial Mortgage, LLC and Arbor Commercial Funding, LLC are national direct lenders specializing in loan origination and servicing for multifamily, seniors housing, healthcare and otherdiverse commercial real estate assets. Arbor is a 2013 Top 10 Fannie Mae DUS® Multifamily Lender by volume, a Freddie Mac Program Plus® Seller/Servicer and Small Balance Loan lender, an FHA Multifamily Accelerated Processing (MAP)/LEAN Lender, a HUD‐approved LIHTC Lender as well as a CMBS, Bridge and Mezzanine lender, consistently building on its reputation for service, quality and flexibility. With a current servicing portfolio of more than $11 billion,Arbor is a primary commercial loan servicer and special servicer rated by Standard & Poor’s and holds an Above Average rating from Standard & Poor’s. Arbor is also on the Standard & Poor’s Select Servicer List and is a primary commercial loan servicer and loan level special servicer rated by Fitch Ratings.

Arbor Commercial Mortgage, LLC also manages Arbor Realty Trust, Inc., a real estate investment trust, (REIT), formed to invest in mortgage‐related securities, real estate‐related bridge, junior participating interests in first mortgages, mezzanine loans, preferred and direct equity investments and in limited cases, discounted mortgage notes and other real estate related assets. Arbor is headquartered in Uniondale, NY, with full‐service lending offices throughout the United States. For more information about Arbor, visit www.arbor.com.

For Further Information Contact:

Matt MaisonDirector, Research and AnalysisArbor Commercial Mortgage, LLC375 Park Avenue, Suite 3401New York, NY 10152T: 646.963.6352 [email protected]

The research contained in this report should not be construed as a solicitation to and/or trade. All opinions, news, research, analyses, prices or other information is provided as general market commentary and not as investment advice; all information is subject to change. Arbor, its members, shareholders, employees, agents and representatives do not warrant the completeness, accuracy or timeliness of the information supplied, and shall not be liable for any loss or damages, consequential or otherwise, which may arise from the use or reliance on the content contained herein. Past performance is not indicative of future performance.

arbor us economic data book 2014 q4

Economy & Finance

economicdatabook q42014

seasonallyadjusted source

recession unitedstates

tableofcontents page

comparedwit months

average duringjanuary

overthe last12months

infe ages16yearsandover