rupert report - ucsb econ. forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115...

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Rupert Report Peter Rupert Professor Department of Economics, UCSB Director, UCSB Economic Forecast Project Economic Update January 26, 2017 www.efp.ucsb.edu/talk

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Page 1: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

Rupert Report

Peter RupertProfessor

Department of Economics, UCSBDirector, UCSB Economic Forecast Project

Economic UpdateJanuary 26, 2017

www.efp.ucsb.edu/talk

Page 2: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

economics and the election

Page 3: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

what to expect

uncertainty

Dodd-Frank

international trade

taxes and spending

Obamacare

oil/energy

immigration

ugh, I need a lot more slides! but...

Page 4: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

what to expect

uncertainty

Dodd-Frank

international trade

taxes and spending

Obamacare

oil/energy

immigration

ugh, I need a lot more slides! but...

Page 5: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

what to expect

uncertainty

Dodd-Frank

international trade

taxes and spending

Obamacare

oil/energy

immigration

ugh, I need a lot more slides! but...

Page 6: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

what to expect

uncertainty

Dodd-Frank

international trade

taxes and spending

Obamacare

oil/energy

immigration

ugh, I need a lot more slides! but...

Page 7: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

what to expect

uncertainty

Dodd-Frank

international trade

taxes and spending

Obamacare

oil/energy

immigration

ugh, I need a lot more slides! but...

Page 8: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

what to expect

uncertainty

Dodd-Frank

international trade

taxes and spending

Obamacare

oil/energy

immigration

ugh, I need a lot more slides! but...

Page 9: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

what to expect

uncertainty

Dodd-Frank

international trade

taxes and spending

Obamacare

oil/energy

immigration

ugh, I need a lot more slides! but...

Page 10: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

what to expect

uncertainty

Dodd-Frank

international trade

taxes and spending

Obamacare

oil/energy

immigration

ugh, I need a lot more slides! but...

Page 11: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

1929 1940 1950 1960 1970 1980 1990 2000 2010

7.0

7.5

8.0

8.5

9.0

9.5

10.0

Real GDPLogged Billions of 2009$, Seasonally Adjusted

Linear Trend

Page 12: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

so far...

some positive signs

stock market

gdp

FOMC a bit more upbeat

Page 13: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016

8

10

12

14

16

18

20

Dow Jones Industrial Index (000’s)

Page 14: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

Ele

ctio

n

Jan 012016

Mar 012016

May 022016

Jul 012016

Sep 012016

Nov 012016

Jan 022017

16

17

18

19

20

Dow Jones Industrial Index (000’s)

Page 15: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

My

Bir

thda

y

Jan 012016

Mar 012016

May 022016

Jul 012016

Sep 012016

Nov 012016

Jan 022017

16

17

18

19

20

Dow Jones Industrial Index (000’s)

Page 16: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

Per

cent

−2

0

2

4

6

2.8%

0.8%

3.1%

4%

−1.2%

4%

5%

2.3%2%

2.6%

2%

0.9% 0.8%

1.4%

3.5%

2013

2014

2015

2016

Econsnapshot.com Source: BEA

Real GDP

quarterly change at an annual rateyear−over−year change

Page 17: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

what’s up with our friends at the Fed?

increases this year?

Page 18: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc
Page 19: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc
Page 20: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

housing and financial aspects

home price growth has moderated

mortgage crisis has abated

foreclosures back to “normal”

yet, foreclosure timelines not!

Page 21: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

2000 2002 2004 2006 2008 2010 2012 2014 2016

20

40

60

80

100

120

Santa Barbara[ $1,064,100]Carpinteria[ $788,600]Montecito[ $3,048,500]Goleta[ $786,800]Santa Maria[ $352,500]Lompoc[ $307,000]Guadalupe[ $266,900]

Zillow Home Value IndexIndex (100 = Pre−Recession Max Value)

Page 22: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

2001−Feb 2004−Feb 2007−Feb 2010−Feb 2013−Feb 2016−Feb

−40

−20

0

20

40 Santa Barbara[6%]Carpinteria[0%]Montecito[7%]Goleta[3%]Santa Maria[8%]Lompoc[10%]Guadalupe[12%]

Zillow Home Value IndexYoY Growth Rate (%)

Page 23: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

Q1 1995 Q1 1998 Q1 2001 Q1 2004 Q1 2007 Q1 2010 Q1 2013 Q4 2015

16

18

20

22

24

26

www.efp.ucsb.edu Source: Board of Governors, Flow of Funds

Ratio of HH Liabilities to HH Net WorthPercent (%)

Page 24: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

2000 2002 2004 2006 2008 2010 2012 2014 2016

0

10

20

30

40

50

60 Riverside, CASacramento, CASan Diego, CALos Angeles, CASan Francisco, CACalifornia

Homes foreclosed per month, by MSANumber of homes per 10,000

Page 25: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc
Page 26: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

2011−Q2 2012−Q1 2012−Q4 2013−Q3 2014−Q2 2015−Q1 2015−Q4 2016−Q3

0.10

0.15

0.20

0.25

0.30

0.35

0.40

Santa Barbara

California

United States

Percent of Home with Negative Equity

Page 27: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

San

ta B

arba

raC

ount

y

San

ta M

aria

San

ta B

arba

raC

ity

Lom

poc

Gol

eta

Car

pint

eria

Sol

vang

Gua

dalu

pe

Bue

llton

0 %

2 %

4 %

6 %

8 %

10 %

12 %

14 %

Percent of Homes with Negative Equity

Page 28: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

San

ta B

arba

raC

ount

y

San

ta M

aria

San

ta B

arba

raC

ity

Lom

poc

Gol

eta

Car

pint

eria

Sol

vang

Gua

dalu

pe

Bue

llton

0 %

20 %

40 %

60 %

80 %

100 %

Negative Equity Loan−to−Value: 2016Q3

100−120% 120−140% 140−160% 160−180% 180−200% >200%

Page 29: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

income and wages

Page 30: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc
Page 31: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

1969 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014

0.08

0.10

0.12

0.14

0.16

0.18 USCalifornia

Gini CoefficientReal per capita personal income across counties

Page 32: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

new findings on inequality

most of the inequality is “between firms”

not “within firms”

Page 33: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc
Page 34: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc
Page 35: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

labor markets

Page 36: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

wages

wage growth picking up in the US

but not evenly across the state

Page 37: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2016

−2

0

2

4

CPI AHE

Inflation and Average Hourly EarningsPercent change from a year ago, all private workers

Page 38: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

[−1%, 0%]

(0%, 1%]

(1%, 2%]

(2%, 3%]

(3%, 6%]

Real Mean Wage Growth 2015 − 2016

Source: CA EDD

Page 39: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

employment

employment growth strong

but varies by industry and geography

unemployment as well

Page 40: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc
Page 41: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc
Page 42: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc
Page 43: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

2000 2002 2004 2006 2008 2010 2012 2014 2016

95

100

105

Santa Barbara County [ 175,120 ]California [ 15,476,015 ]United States [ 138,434,120 ]

www.efp.ucsb.edu

Total Nonfarm Payrolls, Seasonally AdjustedIndex (Dec 2007 = 100)

Notes: December 2007 level in brackets.

Source: BLS & CA EDD

Page 44: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

2010 2011 2012 2013 2014 2015 2016 2016

100

105

110

115Buellton [ 3,127 ]Carpinteria [ 7,775 ]Goleta [ 17,433 ]Guadalupe [ 3,231 ]Lompoc [ 17,601 ]Santa Barbara City [ 51,151 ]Santa Maria [ 46,649 ]Solvang [ 2,706 ]

www.efp.ucsb.edu

Total Civilian Employment, Seasonally AdjustedIndex (Jan 2010 = 100)

Note: Current level in brackets.

Source: BLS & CA EDD

Page 45: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

2010 2011 2012 2013 2014 2015 2016 2016

4

6

8

10

12

Buellton [ 2.9% ]Carpenteria [ 3.97% ]Goleta [ 2.71% ]Guadalupe [ 4.3% ]Lompoc [ 5.95% ]Santa Barbara City [ 3.64% ]Santa Maria [ 5.53% ]Solvang [ 5.63% ]

www.efp.ucsb.edu

Unemployment Rate, Seasonally AdjustedPercent (%)

Note: Most recent rate in brackets.

Source: BLS & CA EDD

Page 46: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

Government

Leisure & Hospitality

Educ. & Health ServicesGoods Producing

Prof. & Bus. ServicesTotal Farm

Retail Trade

Financial ActivitiesOther Services

Wholesale Trade

Information

Trans., Ware. & Util.

19.2 14.2 13 11 10.6 10.29.5

3.12.8

2.52.1

1.7

−2.5

0.0

2.5

5.0

7.5

0 25 50 75 100Percent of Total Employment

Dec

201

5 −

Dec

201

6 G

row

th R

ate

(%)

December 2016 Employment by Industry Santa Barbara County

Page 47: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

final thoughts

policy uncertainty

strong growth in the US

FOMC forecast: 3 25bp increases in 2017?

Page 48: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

1929 1940 1950 1960 1970 1980 1990 2000 2010

7.0

7.5

8.0

8.5

9.0

9.5

10.0

Real GDPLogged Billions of 2009$, Seasonally Adjusted

Linear Trend

Page 49: Rupert Report - UCSB Econ. Forecast · 2010 2011 2012 2013 2014 2015 2016 2016 100 105 110 115 Buellton [ 3,127 ] Carpinteria [ 7,775 ] Goleta [ 17,433 ] Guadalupe [ 3,231 ] Lompoc

thank you!