economic update february 2012 ryan wang, us economist hsbc securities (usa) inc....
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Economic Update
February 2012
Ryan Wang, US EconomistHSBC Securities (USA) [email protected]+1 212 525 3181
2
Advanced economics: Just over 50% of US exports
Source: Netherlands Bureau for Economic Policy Analysis
-15
-10
-5
0
5
10
15
80
84
88
92
96
100
104
05 06 07 08 09 10 11 12
% Year-on-Year, LHSIndex (2007 = 100), RHS
Import volumes: Advanced economies (excluding the US)
3
Eurozone import volumes have stalled
Source: Netherlands Bureau for Economic Policy Analysis
-15
-10
-5
0
5
10
80
85
90
95
100
105
05 06 07 08 09 10 11 12
% Year-on-Year, LHSIndex (2007 = 100), RHS
Import volumes: Euro Area
4
Emerging Asia
Source: Netherlands Bureau for Economic Policy Analysis
-10
-5
0
5
10
15
20
25
70
80
90
100
110
120
130
140
05 06 07 08 09 10 11 12
% Year-on-Year, LHSIndex (2007 = 100), RHS
Import volumes: Emerging Asia
5
Latin America
Source: Netherlands Bureau for Economic Policy Analysis
-30
-20
-10
0
10
20
30
70
80
90
100
110
120
130
05 06 07 08 09 10 11 12
% Year-on-Year, LHSIndex (2007 = 100), RHS
Industrial production: Latin America
6
A more challenging external environment for the US
Source: US Census Bureau, 2012 growth = HSBC forecast
-16
-12
-8
-4
0
4
8
12
16
80
85
90
95
100
105
110
115
120
05 06 07 08 09 10 11 12
% Year-on-Year, LHSIndex (2007 = 100), RHS
Export volumes: United States
2012 forecast
7
US: Home sales are slower today than 10 years ago
Source: Census Bureau, National Association of Realtors
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
99 00 01 02 03 04 05 06 07 08 09 10 11
Total home sales (both newand existing homes), millions
8
US: This means the housing market is highly imbalanced
Source: National Association of Realtors
0
1
2
3
4
5
6
7
8
9
10
11
99 00 01 02 03 04 05 06 07 08 09 10 11
Months supply of existing homes available for sale
9
US: The loss of housing wealth
Source: Federal Reserve
35
40
45
50
55
60
65
70
75
60 65 70 75 80 85 90 95 00 05 10 15
Recessions Home equity to home value ratio
10
US: Job seekers still in a difficult position
Source: Bureau of Labor Statistics
1
2
3
4
5
6
7
01 02 03 04 05 06 07 08 09 10 11 121
2
3
4
5
6
7
Recessions
Number of unemployedpersons per job opening
11
US: An uphill struggle for the labor market
Source: Bureau of Labor Statistics
58
59
60
61
62
63
64
65
90 92 94 96 98 00 02 04 06 08 10 12
RecessionsEmployed workers as a percentage of adult population
12
US debt outlook changed dramatically in 2008
CBO Projections: Federal Debt as a % of GDP
20
30
40
50
60
70
80
90
100
75 78 81 84 87 90 93 96 99 02 05 08 11 14 17 20
2011 projections 2007 projections
2011 = 67%
Source: Congressional Budget Office, HSBC calculations
13
Fiscal austerity is subtracting from US economic growth
Source: Bureau of Economic Analysis
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
05 06 07 08 09 10 11 12
Federal governmentState and local government investmentState and local government consumptionTotal government
Government ppt contribution to real GDP growth over the past year:
14
2012: Year 4 of US government layoffs
Source: Bureau of Labor Statistics
-0.3
-0.2
-0.1
0.0
0.1
0.2
0.3
05 06 07 08 09 10 11 12Local government State government Federal government Total government
Change in government employment over the past year as a % of all employment:
15
Fed anticipates “exceptionally low” rates through 2014
Source: Federal Reserve
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Target Federal Funds Rate at Year-End, %
FOMC's Appropriate Pace of Policy Firming:
2012 2013 2014 Longer run
16
US: Delinquency rates: On the right track?
Source: Federal Reserve Bank of New York Consumer Credit Panel