national and regional economic outlook - richmond fed · 2017-10-12 · national and regional...

National and Regional Economic Outlook

Virginia, Maryland and Delaware Association of Electric Cooperatives FAMIS ConferenceSeptember 26, 2017

Ann MacherasGroup Vice President

Overview

The National Economy• Measures of output• Labor markets• Residential investment• Business investment

The Economies of Virginia, Maryland, and Delaware

• Business activity• Labor markets • Housing markets

2

National Economic Trends

3

-10

-8

-6

-4

-2

0

2

4

6

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

% Change, SAAR

Q2: 2017US: 3.0%

U.S. Real Gross Domestic Product

Source: Bureau of Economic Analysis via Haver Analytics

4

Real Gross Domestic product


Q2 Q3 Q4 Q1 Q2CHANGE FROM PREVIOUS QUARTER AT COMPOUND ANNUAL RATE [PERCENT]:

Gross Domestic Product 2.2 2.8 1.8 1.2 3.0

Personal Consumption Expenditures 3.8 2.8 2.9 1.9 3.3Nonresidential Fixed Investment 3.3 3.4 0.2 7.2 6.9

Structures 0.5 14.3 -2.2 14.8 6.2Equipment -0.6 -2.1 1.8 4.4 8.8Intellectual Property Products 11.1 4.2 -0.4 5.7 4.9

Residential Fixed Investment -4.7 -4.5 7.1 11.1 -6.5

Exports of Goods & Services 2.8 6.4 -3.8 7.3 3.7Imports of Goods & Services 0.4 2.7 8.1 4.3 1.6

-0.9 0.5 0.2 -0.6 -0.3

Final Sales to Domestic Purchasers 2.6 2.2 2.3 2.4 2.7LEVEL IN QUARTER AT SEASONALLY ADJUSTED ANNUAL RATE [Billions of Chained (2005) Dollars]:

Change in Private Inventories 12.2 17.6 63.1 1.2 1.8

Net Exports of Goods & Services -572.4 -557.3 -631.1 -622.2 -613

Government Consumption Expenditures & Gross Investment

2016 2017

5

Personal Income and Expenditures

Source: Bureau of Economic Analysis/Haver Analytics

-10

-8

-6

-4

-2

0

2

4

6

8

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY % Chg Real Personal Consumption ExpendituresReal Personal Income

July 2017RPCE: 2.7%RPI: 1.7%

6

Retail Sales

Source: Census Bureau via Haver Analytics

-14

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY % Chg

YoY % ChangeAugust: 3.2%

July: 3.5%June: 3.0%

7

-800

-700

-600

-500

-400

-300

-200

-100

0

100

200

300

400

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Average Monthly Change, Thous.

Total Employment Growth

Monthly ChangeAugust: 156

July: 189June: 210

Source: Bureau of Labor Statistics/Haver Analytics

8

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 2020

Percent

August 2017US: 4.4%

9

52

54

56

58

60

62

64

66

68

1952 1957 1962 1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017

Percent of Population

Labor Force Participation Rate


August 2017US: 62.9

10

Average Hourly Earnings

0.0

1.0

2.0

3.0

4.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY % Chg


11

August: 2.5%

Investment in Non-Residential Structures


-40

-30

-20

-10

0

10

20

30

40

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

% Change, SAAR

2Q: 20176.2%

12

Investment in Equipment


-50

-40

-30

-20

-10

0

10

20

30

40

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

% Change, SAAR

2Q: 20178.8%

13

Residential Fixed Investment

-40

-30

-20

-10

0

10

20

30

40

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

% Change, SAAR

2Q:2017-6.5%


14

Single-family Existing vs New Home Sales

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Millions, SAARMillions, SAAR New Home Sales (Left axis)

Existing Home Sales (Right axis)

90s Average: New Sales

90s Average: Existing Sales


15

Private Single-Family Housing Starts & Permits

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Millions, SAAR Single-family Housing PermitsSingle-family Housing Starts

August 2017Permits: 0.800Starts: 0.851

90's Average Permits: 1.010

90's Average Starts: 1.105


16

Home Price Index

17

-20

-15

-10

-5

0

5

10

15

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY% Change

Total Sales

Non-Distressed Sales

July 2017Total: 6.7%

Non-Distressed: 5.9%

Source: CoreLogic Information Solutions, Inc.

Multi-Family Housing Starts & Permits


0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Millions, 3-month average, SAAR

Multi-family Housing PermitsMulti-family Housing Starts

August 2017Permits: 0.500Starts: 0.347

90's Average Permits: 0.313

90's Average Starts: 0.268

18

Regional Economic Trends

19

Economic Activity in the Fifth DistrictManufacturing Sector

20

30

35

40

45

50

55

60

65

70

-40

-30

-20

-10

0

10

20

30

40

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

3-m

onth

ave

rage

Manufacturing Composite Index (Left Axis)

ISM Manufacturing (Right Axis)

Richmond Manufacturing Survey and ISM Manufacturing Survey

Source: The Federal Reserve Bank of Richmond/Institute of Supply Management

Economic Activity in the Fifth District Service Sector

21

30

35

40

45

50

55

60

65

70

-40

-30

-20

-10

0

10

20

30

40

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

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

Payroll Employment

22


-6

-5

-4

-3

-2

-1

0

1

2

3

4

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY % Chg (SA) U.S. Virginia Maryland Delaware

August 2017US: 1.4%VA: 1.5%MD: 2.3%DE: 0.6%

Total Nonfarm Payroll Employment

23


90

92

94

96

98

100

102

104

106

108

110

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

U.S.

Virginia

Maryland

Delaware

Index: Dec. 2007 = 100

0.5

4.7

8.6

18.9

1.9

5.7

14.0

15.7

10.8

3.9

15.4

0.2

4.8

5.9

16.9

1.7

5.1

18.3

13.6

10.2

5.1

18.2

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)

2016 U.S.Virginia

Virginia Industry Structure

24


Virginia Industry Growth

25

1.4

8.8

3.2

1.1

0.4

-2.4

1.8

3.0

2.1

2.1

1.5

0.0

1.5

-2.6

2.4

0.6

0.1

-5.8

2.6

2.4

4.1

2.6

1.4

-0.2

-8 -6 -4 -2 0 2 4 6 8 10

Total

Natural Resources & Mining

Construction

Manufacturing


Information





Other Services

Government

YoY % Chg (SA)

August 2017

U.S.Virginia


Maryland Industry Structure

26

5.1

8.6

18.9

1.9

5.7

14.0

15.7

10.8

3.9

15.4

6.0

3.8

17.2

1.4

5.5

16.3

16.9

10.0

4.2

18.6

0 2 4 6 8 10 12 14 16 18 20

Natural Resources & Construction

Manufacturing


Information





Other Services

Government


2016 U.S.Maryland


Maryland Industry Growth

27

1.4

3.7

1.1

0.4

-2.4

1.8

3.0

2.1

2.1

1.5

0.0

2.3

4.8

0.1

1.0

-2.7

-0.4

5.6

3.4

1.3

2.7

1.1

-4 -2 0 2 4 6 8

Total


Manufacturing


Information





Other Services

Government

YoY % Chg (SA)

August 2017 U.S.Maryland


Delaware Industry Structure

28

5.1

8.6

18.9

1.9

5.7

14.0

15.7

10.8

3.9

15.4

4.6

5.7

18.2

1.0

10.4

13.5

17.0

11.0

4.1

14.4

0 2 4 6 8 10 12 14 16 18 20


Manufacturing


Information





Other Services

Government


2016 U.S.Delaware


Delaware Industry Growth

29

1.4

3.7

1.1

0.4

-2.5

1.8

3.0

2.1

2.1

1.5

0.0

0.6

0.5

0.4

-2.9

0.0

2.3

-0.3

3.1

4.8

-2.7

-0.3

-4 -2 0 2 4 6

Total


Manufacturing


Information (NSA)





Other Services

Government

YoY % Chg (SA)

August 2017 U.S.Delaware


Professional & Business Services Employment

30

85

90

95

100

105

110

115

120

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

U.S.

Virginia

Maryland

Delaware

Index: Dec. 2007 = 100


Health and Education Services Employment

31

85

90

95

100

105

110

115

120

125

130

135

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

U.S.

Virginia

Maryland

Delaware

Index: Dec. 2007 = 100


Goods-Producing Employment Index

32

70

75

80

85

90

95

100

105

110

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

U.S.

Virginia

Maryland

Delaware

Index: Dec. 2007 = 100


Unemployment Rate

33

0

1

2

3

4

5

6

7

8

9

10

11

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Percent (SA) U.S. Virginia Maryland Delaware

August 2017US: 4.4%VA: 3.8%MD: 3.9%DE: 4.9%


Unemployment in Fifth District Counties

34


Housing Starts

35

Source: Bank of Tokyo-Mitsubishi UFJ/Haver Analytics

0

200

400

600

800

1,000

1,200

1,400

1,600

0

5

10

15

20

25

30

35

40

45

50

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

SAAR, thousandsSAAR, thousands

Virginia (Left Axis)

United States (Right Axis)

Virginia 1990s Average

United States 1990s Average

Housing Starts

36

0

2

4

6

8

10

12

0

5

10

15

20

25

30

35

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

SAAR, thousandsSAAR, thousands

Maryland (Left Axis)

Delaware (Right Axis)

Source: Bank of Tokyo-Mitsubishi UFJ/Haver Analytics

Single-Family Building Permits

37

-60

-40

-20

0

20

40

60

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY % Chg3-month average

U.S.Virginia

July 2017US: 11.4%VA: 17.7%

Source: U.S. Census Bureau/Haver Analytics

Single-Family Building Permits

38

-60

-40

-20

0

20

40

60

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY % Chg,3-mma Maryland

Delaware

July 2017MD: 14.5%DE: 16.7%


-100

-50

0

50

100

150

200

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY % Chg3-month average U.S.

VirginiaJuly 2017US: -0.6%VA: -4.7%

Multi-Family Building Permits

39


Multi-Family Building Permits

40

-200

-100

0

100

200

300

400

500

600

700

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY % Chg,3-month average

Maryland

Delaware

July 2017MD: -41.9%DE: 254.5%


House Prices—CoreLogic HPI

41


-20

-15

-10

-5

0

5

10

15

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

YoY % Chg (SA) U.S.

Virginia

Maryland

Delaware

July 2017US: 6.7%VA: 2.7%MD: 2.7.%DE: 1.5%

CoreLogic HPI

42


Summary

• As was expected, economic growth picked up in the second quarter, and labor markets remain strong by most indicators.

• The consumer is spending more, with growth in employment and some pick-up in wages as well as a continually declining unemployment rate.

• Strengthening labor markets have been evident across Maryland, Virginia, and Delaware as well, though not as strong as the nation.

• Activity in the housing sector remains steady in the U.S. and across all three states despite the second quarter slowdown in residential investment.

43

The views expressed here are those of the author, and do not necessarily represent those of the Federal Reserve Bank of Richmond or the Federal Reserve System.

6

national and regional economic outlook - richmond fed · 2017-10-12 · national and regional...

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