national and regional economic update - richmond …...national and regional economic update south...

National and Regional Economic Update

South Carolina Department of CommerceFebruary 26, 2020

Laura UllrichRegional Economist

National Economy

What is the Story?

• U.S. economic growth by the numbers looks solid

– GDP is growing as anticipated

– Labor markets are strong

• Manufacturing seems to be softening and sentiment broadly

is less positive than the numbers. Data at the end of 2019

showed continued strength and slight rebounds from earlier

in the year.

• The economies in North Carolina and South Carolina are

growing robustly overall and this growth is outpacing the

U.S.

• 2020 looks promising, but there are potential speed bumps

ahead.

– Election, Coronavirus fears

3

What is the Story?

4

What is the Story?

5

-6

-4

-2

0

2

4

6

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

% Change, SAAR

U.S. Real Gross Domestic Product

6

Source: Bureau of Economic Analysis, Federal Reserve Board /Haver Analytics

Q4: 2019

US: 2.1%

-800

-700

-600

-500

-400

-300

-200

-100

0

100

200

300

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

Average Monthly Change, Thous.

Total Employment Growth

Monthly Change

January: 225

December: 147

November: 261

7

Source: Bureau of Labor Statistics/Haver Analytics

Unemployment Rate

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 2020

US: 3.6%

8

Average Hourly Earnings

9

0

1

2

3

4

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

YoY % Chg

January: 3.1%


National House Prices

-20

-15

-10

-5

0

5

10

15

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

YoY % Chg Total Sales Non-Distressed Sales

December 2019Total: 4.0%

Non-Distressed: 3.7%

Source: CoreLogic Information Solutions, Inc.

10

Home Sales: United States

Source: National Association of Realtors/Haver Analytics

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

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

Millions, SAARMillions, SAAR

New Home Sales (Left axis) Existing Home Sales (Right axis)

90s Average: New Sales

90s Average: Existing Sales

11

Private Single-family Housing Starts & Permits

0.0

0.2

0.4

0.6

0.8

1.0

1.2

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

Millions, SAAR Single-family Housing Permits

Single-family Housing Starts

January 2020Permits: 0.99

Starts: 1.0

90's Average Permits: 1.010

90's Average Starts: 1.105

Source: U.S. Census Bureau/Haver Analytics

12

Private Multi-family Housing Starts & Permits

Source: U.S. Census Bureau/Haver Analytics

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

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

Millions, 3-month average, SAAR

Multi-family Housing Permits

Multi-family Housing Starts

January 2020Permits: 0.56

Starts: 0.52

90's Average Permits: 0.313

90's Average Starts: 0.268

13

University of Michigan Consumer Expectations

14

Source: University of Michigan via Haver Analytics

40

50

60

70

80

90

100

2009 2011 2013 2015 2017 2019

Index, Q1 1966=100

Jan

PCE Inflation

15

Source: Bureau of Economics Analysis, Federal Reserve Board of Governors/Haver Analytics

-2

-1

0

1

2

3

4

5

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

YoY % ChgDecember 2019

PCE Inflation: 1.6

PCE Less Food & Energy: 1.6

Federal Funds Rate

16

Source: Federal Reserve Board and FRBNY via Haver Analytics

0

1

2

3

4

5

6

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Percent

Fed Funds Effective Rate

Fed Funds Target Rate

The dot plot for the Fed Funds Rate

Note: Each shaded circle indicates the value (rounded to the nearest 1/8 percentage point) of an individual

participant’s judgment of the midpoint of the appropriate target range for the federal funds rate or the appropriate target

level for the federal funds rate at the end of the specified calendar year or over the longer run. One participant did not

submit longer-run projections for the federal funds rate.

Source: Federal Reserve Board, September 2019 Summary of Economic Projections

0

1

2

3

4

5

0

1

2

3

4

5

2019 Longer run

Percent

2020 2021 2022

17

Regional Economy

Manufacturing Index

Source: Federal Reserve Bank of Richmond/Institute of Supply Management/Haver Analytics

19

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

avera

ge

Manufacturing Composite Index (Left Axis)

ISM Manufacturing (Right Axis)

Richmond Manufacturing Survey and ISM Manufacturing Survey

Service Sector Index

Source: Federal Reserve Bank of Richmond/Institute of Supply Management/Haver Analytics

20

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

avera

ge

Services Revenue Index (Left Axis)

ISM Nonmanufacturing (Right Axis)

Richmond Service Sector Survey and ISM Nonmanufacturing Survey

South Carolina Industry Structure


21

0.5

4.9

8.4

18.7

1.9

5.7

14.2

16.1

10.8

3.9

15.0

0.2

4.7

11.6

19.4

1.2

4.7

13.5

11.8

11.9

3.5

17.3

0 2 4 6 8 10 12 14 16 18 20

Natural Resources and 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.

South Carolina

South Carolina Industry Growth


22

1.4

-2.9

2.0

0.4

0.5

0.6

1.4

1.9

2.7

2.5

1.3

0.7

1.4

4.5

3.8

2.1

1.5

-3.5

0.8

-1.0

1.4

2.6

1.5

1.7

-4 -2 0 2 4 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 (NSA)

December 2019 U.S.

South Carolina

South Carolina Unemployment Rate


23

0

2

4

6

8

10

12

14

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

Percent U.S.

South Carolina

December 2019

US: 3.5%

SC: 2.3%

Charlotte MSA Payroll Employment


24

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

3

4

5

6

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

YoY % Chg U.S.

South Carolina

Charlotte

December 2019US: 1.4

SC: 1.3Charlotte: 2.8

MSA Payroll Employment Growth in South Carolina


25

4.7

2.9

1.7

1.4

1.3

1.1

0.8

0.7

-0.5

-1 0 1 2 3 4 5

Myrtle Beach (NSA)

Spartanburg (NSA)

Greenville (NSA)

US

South Carolina

Charleston

Florence

Columbia

Sumter

YoY % Chg

December 2019

Employment Growth by Locality


26

-16

-14

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

14

16

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

YoY % Change York County Chester County Lancaster County

Unemployment Rates by Locality

27

December 2019

US: 3.5%

SC: 2.3%

York County: 2.3%

Chester County: 5.7%

Lancaster County: 2.9%

0

2

4

6

8

10

12

14

16

18

20

22

24

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

Unemployment Rate (Percent)

York County Chester County Lancaster County


A Closer Look at MSA Growth: South Carolina

28

Charleston

Columbia

Florence

Greenville

Hilton Head

Spartanburg

Sumter

Myrtle Beach

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

-1 0 1 2 3 4 5 6

10-y

ear

Ave

rag

e A

nn

ual

% C

han

ge

YoY % Change

Bubble size: Total Employment - December 2019


Summary

• Recent economic data indicates continued growth in the U.S.

economy. Labor markets are tight and consumer spending is solid.

• After declining sentiment through the midpoint of 2019, the

economy ended 2019 on a strong point with increased sentiment

and a rebound in residential fixed investment.

• The states in the corner of the Southeast continue to grow, and

cities like Charlotte and Raleigh continue to outpace the rest of the

U.S.

• All of the quickly growing metro areas are experiencing typical

issues related to rapid growth: increased demand for talent,

increased housing prices, and increased stress on public

infrastructure.

• Things aren’t this positive everywhere. It’s important to remember

that some of our communities are facing declining populations,

employment and tax bases.

29

Expectations for 2020

• Continued positive economic growth, likely in line with

2019, with estimates remaining around 2.0%.

• 2020 does bring with it some uncertainty

– Elections

– Recession in Europe?

– Trade/international relations

– Coronavirus

• The outlook for North Carolina and South Carolina remains

positive, and regional growth will likely exceed national

growth again in 2020.

30

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.

22

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