Economics and Finance in a Two-Percent Economy Appalachian State University. John E. Silvia, Chief Economist March 31, 2017

Transcription

1 Economics and Finance in a Two-Percent Economy Appalachian State University John E. Silvia, Chief Economist March 31, 2017

2 Where Are We Now? Inflation Interest Rates Five benchmarks for good decision making Growth Profits The Dollar Source: Wells Fargo Economic Outlook 2

3 Wells Fargo vs. Consensus, Vote for Change Expectations for the Future Sustained trend growth, no recession in the forecast Employment cyclical and structural change Consumer solid key support to growth How do we compare to consensus? Below consensus on housing starts and auto sales Trade will be a drag on economic growth in the U.S. Unsustainable long-run fiscal policy Europe growth remains steady post-brexit China growth slower for 2017, 2018 Wells Fargo Economic Outlook 3

4 Sustained Growth The Anchoring Bias 10% 8% 6% 4% U.S. Real GDP Bars = CAGR Line = Yr/Yr Percent Change GDP - CAGR: 1.9% GDP - Yr/Yr Percent Change: 1.9% Forecast 10% 8% 6% 4% Trend growth at percent in the year ahead. A more balanced composition of domestic growth should prevail, but trade will be a drag going forward. 2% 0% -2% -4% -6% -8% -10% % 0% -2% -4% -6% -8% -10% Source: U.S. Department of Commerce and Wells Fargo Securities Wells Fargo Economic Outlook 4

5 Supply-Side Challenges

6 Potential Growth Little Help From Productivity 4.0% Nonfarm Labor Productivity Average Annual Percent Change in Output Per Hour Worked 4.0% 3.5% 3.5% 3.0% 3.0% 2.5% 2.5% Productivity growth has downshifted over the past cycle 2.0% 1.5% 2.0% 1.5% 1.0% 1.0% 0.5% 0.5% 0.0% Q Q % Source: U.S. Department of Labor and Wells Fargo Securities Wells Fargo Economic Outlook 6

7 Potential Growth Little Help from Labor Labor supply growth is slowing, particularly for prime-age workers. Labor force participation has improved but remains historically low. Working Age Population Labor Force Participation 3.0% Working Age Population Growth Percentage Point Contribution to Population Age 16 and Older 3.0% 68% Labor Force Participation Rate Prime vs. Total, Seasonally Adjusted 3-MMA 85% 2.5% 2.5% 67% 84% 2.0% 2.0% 66% 83% 1.5% 1.5% 65% 82% 1.0% Forecast 1.0% 64% 81% 0.5% 0.5% 63% 80% 0.0% 0.0% 62% 79% -0.5% Non-Prime Population (16-24 and 55+): 0.83% Prime-Age Population (25-54): 0.26% -1.0% % -1.0% 61% Labor Force Participation: 62.9% (Left Axis) Prime Participation (Ages 25-54): 81.6% (Right Axis) 60% % 77% Source: U.S. Department of Labor and Wells Fargo Securities Wells Fargo Economic Outlook 7

8 Supply Side Challenges to Sustained 3% Growth 6% Labor Force Participation and Productivity Year-over-Year Percent Change of 4-Quarter Moving Average 69% 5% 68% 4% 67% Low labor force participation and lackluster productivity growth have lowered the path of potential GDP 3% 2% 1% 0% 66% 65% 64% 63% -1% -2% Nonfarm Productivity: 0.2% (Left Axis) Labor Force Participation Rate: 62.7% (Right Axis) % 61% Source: U.S. Department of Labor and Wells Fargo Securities Wells Fargo Economic Outlook 8

9 Production and Employment: Divergent Long-Run Trends 240 Production & Jobs in Manufacturing Sector Index, Jan 1979= Manufacturing output has more than doubled since the late 1970s, but employment has declined on a secular basis Manufacturing Production: Manufacturing Employment: Source: U.S. Department of Labor, Federal Reserve Board and Wells Fargo Securities Wells Fargo Economic Outlook 9

10 Workers Earnings 6% Average Hourly Earnings vs. Atlanta Fed Wage Growth Tracker; YoY % Chg. of 3-MMA 6% 5% 5% Average hourly earnings growth has picked up modestly but remains limited by lower-skilled workers entering the workforce and Baby Boomers beginning to retire the Atlanta Fed measure tracks individuals over time, eliminating compositional effects on wage growth 4% 3% 2% 1% Atlanta Fed Wage Growth Tracker: 3.2% Average Hourly Earnings (Prod. & Supervisory): 2.5% Average Hourly Earnings (Total Private): 2.7% 0% % 3% 2% 1% 0% Source: U.S. Department of Labor, Federal Reserve Bank of Atlanta and Wells Fargo Securities Wells Fargo Economic Outlook 10

11 Personal Income Gains: Disparity 25% Income Growth During Economic Recoveries Percent Change 6 Years After Recession End, Before-Tax Income 25% 20% 20% 15% 15% Income growth has finally begun to turn around but still lags prior recoveries 10% 5% 10% 5% 0% -5% Lowest Quintile Second Quintile Middle Quintile Avg of Prior 2 Recoveries Fourth Quintile Highest Quintile 0% -5% Source: U.S. Department of Labor and Wells Fargo Securities Wells Fargo Economic Outlook 11

12 Divergence in Commercial Real Estate

13 Property Prices: CBD, Suburbs Differ Commercial Property Price Index Index Apartment: Retail: Industrial: Office - CBD: Office - Suburban: High valuations have caught the Fed s attention Source: RCA and Wells Fargo Securities Wells Fargo Economic Outlook 13

14 Property Prices: Major/Non-Major Market Splits 300 Commercial Property Price Index Index 2000 = 100, All Property Types Major Markets: Non-Major Markets: Valuations have grown the fastest in major markets Source: RCA and Wells Fargo Securities Wells Fargo Economic Outlook 14

15 Unsustainable Fiscal Policy

16 Federal Fiscal Policy The composition of federal spending has shifted dramatically. The CBO projects that the debt-to-gdp ratio will surpass 88 percent by Composition of Federal Spending Federal Debt Continues to Rise Federal Spending Percent of Total Discretionary Mandatory Net Interest 100% U.S. Debt Held By The Public CBO Baseline Projections Begin in 2017, Percent of GDP Baseline Debt: 88.9% 100% % 31% 8% 90% 90% Total Spending 1970: 19% of GDP 80% 80% 70% 70% % 62% 6% 60% 60% Total Spending 2015: 21% GDP 50% 50% % 60% 21% Total Spending 2046: 28% of GDP 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 40% 30% 20% % 30% 20% Source: Congressional Budget Office and Wells Fargo Securities Wells Fargo Economic Outlook 16

17 Federal Fiscal Policy: Tax Cuts for Taxpayers Corporate income tax receipts accounted for less than 10 percent of federal revenues in FY The top income quintile pays an outsized share of federal taxes. Composition of Federal Revenues Federal Taxes Paid by Income Quintile Composition of Federal Revenue (FY 2016) Corporate Income Taxes 9.2% Other 9.4% 80% 70% 2013 Share of Federal Taxes By Before-Tax Income Group 80% 70% 60% 60% 50% 50% Individual Income Taxes 47.4% 40% 40% 30% 30% 20% 20% Payroll Taxes 34.0% 10% 10% 0% Lowest Quintile Second Quintile Middle Quintile Fourth Quintile Highest Quintile 0% Source: Congressional Budget Office and Wells Fargo Securities Wells Fargo Economic Outlook 17

18 Federal Debt and Interest Payments: A Ticking Time Bomb? 4.0% Net Interest Outlays & Federal Debt 4-Quarter Moving Sum & Total Public Debt as Shares of NGDP 80% 3.5% 70% 3.0% 60% Despite a historically high debtto-gdp ratio, net interest costs remain low challenges going forward in the face of rising rates 2.5% 2.0% 1.5% 1.0% 50% 40% 30% 20% 0.5% 0.0% Net Interest as a Share of GDP: 1.3% (Left Axis) Public Debt as a Share of GDP: 76.6% (Right Axis) % 0% Source: U.S. Department of the Treasury and Wells Fargo Securities Wells Fargo Economic Outlook 18

19 The Policy Outlook Expectations for the Future Will Congressional leaders put the Affordable Care Act on the back burner and turn to other legislative priorities, or will ACA continue to consume precious time and delay other items on the agenda? Key Issues to Watch in the 115 th Congress Some form of corporate/individual income tax cuts/reforms are likely. Deficit-neutrality will likely be the key challenge, as will progressivity. Other policy areas, such as infrastructure spending, immigration reform and regulatory changes, are likely to play out over time and may take longer than markets currently anticipate. The path forward on trade remains highly uncertain. Consider that in 2009 Democrats controlled the House, the White House and had a supermajority in the Senate yet failed to enact a highly-sought cap-and-trade bill. Political capital, like its financial cousin, is a finite resource. Wells Fargo Economic Outlook 19

20 The Policy Outlook Corporate Tax Reform Winners and Losers* Corporate Tax Reform As Proposed by House Republicans Summary Who is positioned to benefit? High cash taxpayers Cash rich and capital intensive industries Domestic producers Issuers with overseas cash/earnings Companies with low cost, long-term debt Sectors: IG: Technology, Pharmaceuticals, E&P & Metals HY: Technology, Food & Beverage, Services, Telecom Who is at risk? Low cash taxpayers Cash and capital light companies Issuers with high cost, short-term debt Debt-financed payouts to equity holders Sectors: IG: Retail, Autos, Utilities (Hold Co.) HY: Retail, Consumer Products *Bory et. al. (February 2017). Credit Connections: Corporate Tax Reform Speculation on Speculation. Wells Fargo Credit Strategy. Wells Fargo Economic Outlook 20

21 Inflation & Interest Rates Core Inflation Inflation Interest Rates Yield Curve Key Drivers Profits Growth The Dollar Wage-Price Spiral Market Expectations Wells Fargo Economic Outlook 21

22 Inflation: Rising Toward the Two Percent Target 5% PCE Deflator vs. Core PCE Deflator Year-over-Year Percent Change 5% 4% 4% 3% 3% Inflation is approaching the FOMC s target average less than two percent since % 1% 0% 2% 1% 0% -1% PCE Deflator: 1.9% "Core" PCE Deflator: 1.7% FOMC's 2.0% Inflation Target -2% % -2% Source: U.S. Department of Commerce and Wells Fargo Securities Wells Fargo Economic Outlook 22

23 Inflation: A Divide in Goods vs. Services 7% 6% 5% 4% Core Goods vs. Core Services CPI Year-over-Year Percent Change Core Services CPI: 3.1% Core Goods CPI: -0.5% 7% 6% 5% 4% Inflation for services has been much firmer than for commodities 3% 2% 1% 0% -1% -2% -3% % 2% 1% 0% -1% -2% -3% Source: U.S. Department of Labor and Wells Fargo Securities Wells Fargo Economic Outlook 23

24 Inflation Expectations Fed's 5-Year Five Years Forward 2.20% 2.00% U.S. Presidential Election 2.20% 2.00% 1.80% 1.80% The jump in inflation expectations was sharp and sustained 1.60% 1.40% 1.20% 1.60% 1.40% 1.20% 1.00% 1.00% Fed's 5-Year Five Years Forward: 1.99% 0.80% 0.80% May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 Source: Bloomberg LP and Wells Fargo Securities Wells Fargo Economic Outlook 24

25 Interest Rate Path

26 Pace of Policy Firming: We Say Three Hikes in % 4.5% 4.0% 3.5% Appropriate Pace of Policy Firming Target Federal Funds Rate at Year-End March 2017 Median Response December 2016 Median Response September 2016 Median Response December 2015 Median Response Futures Market: March % 4.5% 4.0% 3.5% After several years of downward revisions, the FOMC modestly adjusted the dots up at the December meeting 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Longer Run 0.0% Source: Federal Reserve Board, Bloomberg LP and Wells Fargo Securities Wells Fargo Economic Outlook 26

27 Inflation and the Fed Funds Rate 2.5% 2.0% PCE Deflator and the Federal Funds Rate Year-over-Year Percent Change, Target Rate Federal Funds Target Rate: 1.00% PCE Deflator: 1.89% 2.5% 2.0% 1.5% 1.5% Inflation is gaining momentum. Fed funds rate to follow? Declining real rates. 1.0% 0.5% 1.0% 0.5% 0.0% 0.0% -0.5% Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan % Source: Federal Reserve Board, U.S. Department of Labor and Wells Fargo Securities Wells Fargo Economic Outlook 27

28 Yield Curve Y - 2Y: 118 bps 2Y - FFR: 58 bps Yield Curve Spread Basis Points The yield curve flattened after the Taper Tantrum in 2013 but steepened post-election. We expect a flatter yield curve as 2017 progresses Taper Tantrum Source: Federal Reserve Board and Wells Fargo Securities Wells Fargo Economic Outlook 28

29 Foreign Purchases of U.S. Securities: Still Solid $600 Foreign Private Purchases of U.S. Securities 12-Month Moving Sum, Billions of Dollars $600 $500 $500 $400 $400 $300 $300 Capital flows and asset allocation by global investors play a strong role in rate determinations $200 $100 $0 $200 $100 $0 -$100 -$200 -$300 Treasury: $26.4 Billion Equity: -$5.3 Billion Agency: $246.8 Billion Corporate: $115.9 Billion $100 -$200 -$300 Source: U.S. Department of the Treasury and Wells Fargo Securities Wells Fargo Economic Outlook 29

30 Profits and the U.S. Dollar

31 S&P Revenues Earned Abroad Percent of S&P Revenues Earned Abroad By Sector, Q Financials 4% Consumer Discretionary Consumer Staples 25% 26% IT and Materials earn the highest share of their revenues abroad, making those industries the most at risk to the stronger dollar Invoicing in dollars? Industrials Energy Total Health Care 31% 31% 32% 40% Materials 48% Information Technology 53% 0% 10% 20% 30% 40% 50% 60% Source: Bloomberg LP and Wells Fargo Securities Wells Fargo Economic Outlook 31

32 Corporate Profit Growth 40% Corporate Profits Before Taxes 4-Quarter Moving Average, Year-over-Year Percent Change 40% 30% 30% 20% 20% Corporate profit growth has slowed recently typical mid- to late-cycle slowdown 10% 0% -10% 10% 0% -10% -20% -20% -30% Corporate Profits: -5.1% % Source: U.S. Department of Commerce and Wells Fargo Securities Wells Fargo Economic Outlook 32

33 Corporate Profit Margins 16% Nonfinancial Domestic Profits Share of Gross Value Added of Nonfinancial Corporations 16% 14% 14% 12% 12% Corporate profits as a share of gross value added remains historically high but is now past its peak 10% 8% 6% 4% 10% 8% 6% 4% 2% 0% United States: 13.3% Average: 11.2% % 0% Source: U.S. Department of Commerce and Wells Fargo Securities Wells Fargo Economic Outlook 33

34 Dollar Appreciation: Bias Upward Trade Weighted Dollar Major Curency Index, 1973 = Forecast Dollar appreciation should be more modest moving forward. Interventions from other countries (China, Mexico) limit dollar gains Trade Weighted Dollar: Source: Federal Reserve Board and Wells Fargo Securities Wells Fargo Economic Outlook 34

35 Dollar Appreciation: Bias Upward U.S. Dollar Appreciation vs. Top Export Destinations Top 7 Trading Partners, Year-over-Year Percent Change Canada 1.5% Mar-17 Mexico 11.0% China 6.1% More The dollar has appreciated against most of our large trading partners over the past year, but movements have varied significantly Japan U.K. Germany 1.1% 4.9% 16.4% U.S. Exports Less South Korea -2.8% -10% -5% 0% 5% 10% 15% 20% 25% Source: Federal Reserve Board and Wells Fargo Securities Wells Fargo Economic Outlook 35

36 International Trade $200B U.S. Trade Balances In Billions of Dollars $200B $0B $0B -$200B -$200B The U.S. trade balance with Canada and Mexico is modest compared to the rest of the world particularly China -$400B -$600B -$800B -$400B -$600B -$800B -$1000B Trade Balance with Canada: $-15.2B Trade Balance with Mexico: $-58.4B Trade Balance with World: $-737.1B -$1200B $1000B -$1200B Source: U.S. Department of Commerce and Wells Fargo Securities Wells Fargo Economic Outlook 36

37 Global Exports: Downshift 25% 20% 15% 10% 5% Global Export Volumes Year-over-Year Percent Change 25% 20% 15% 10% 5% Global trade has clearly downshifted 0% -5% -10% -15% -20% Real Exports: 3.1% Average 1992-Present: 5.1% -25% % -5% -10% -15% -20% -25% Source: IHS Global Insight and Wells Fargo Securities Wells Fargo Economic Outlook 37

38 Chinese GDP 16% Chinese Real GDP Forecast Year-over-Year Percent Change 16% 14% 14% 12% 12% Growth in China will likely continue to downshift to a more sustainable pace 10% 8% 6% 4% WF Fcst. 10% 8% 6% 4% 2% Year-over-Year Percent Change: 6.8% 0% % 0% Source: Bloomberg LP and Wells Fargo Securities Wells Fargo Economic Outlook 38

39 Global Forecast 7.5% Real Global GDP Growth Year-over-Year Percent Change, PPP Weights 7.5% 6.0% Period Average 6.0% We expect global economic growth will remain below its long-run trend 4.5% 3.0% 1.5% WF Forecast 4.5% 3.0% 1.5% 0.0% 0.0% -1.5% % Source: International Monetary Fund and Wells Fargo Securities Wells Fargo Economic Outlook 39

40 Five Takeaways Growth Continued moderate growth led by domestic consumer Inflation Rising, but is the pace slow enough to delay additional Fed moves? Interest Rates Rising short rates, but relatively flat long rates as capital flows favor the U.S. Dollar Stronger dollar as rates and growth favor U.S. Profits A late cycle slowdown Wells Fargo Economic Outlook 40

41 U.S. Forecast q Wells Fargo U.S. Economic Forecast Actual Forecast Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Actual Forecast Real Gross Domestic Produc t Personal Consumption Business Fixed Investment Equipment Intellectual Property Products Structures Residential Construction Government Purchases Net Exports Inventories Nonfarm Payroll Change Unemployment Rate Consumer Price Index Quarter-End Interest Rates 5 Federal Funds Target Rate Conventional Mortgage Rate Year Note Year Note Forecast as of: March 15, Compound Annual Growth Rate Quarter-over-Quarter 4 Year-over-Year Percentage Change 2 Percentage Point Contribution to GDP 5 Annual Numbers Represent Averages 3 Average Monthly Change Source: U.S. Department of Commerce, U.S. Department of Labor, Federal Reserve Board, Freddie Mac and Wells Fargo Securities Wells Fargo Economic Outlook 41

42 Appendix

43 Wells Fargo Economics Group Publications Recent Special Commentary Date Title Authors U.S. Macro March-24 Boomer Spending: Bracing for the Slowdown Silvia, House & Pugliese March-23 RV Demand Expected to Remain Strong Aleman March-21 Which Boomers Will Be Working in Their "Retirement" Years? Silvia, House & Pugliese March-20 Capitol Hill Update: ACA Replacement Bill Revealed Brown & Pugliese March-16 Will Working Longer Solve Boomers' Retirement Shortfall? Silvia, House & Pugliese To join any of our research distribution lists please visit our website: economics U.S. Regional March-24 Florida Labor Market Update: February 2017 Vitner, Feik & Batcheller March-24 California's Unemployment Rate Falls to 5 Percent in February Vitner, Feik & Batcheller March-24 Texas Labor Market Update: February 2017 Vitner, Feik & Batcheller March-24 North Carolina Labor Market Update: February 2017 Vitner, Feik & Batcheller March-24 New York Labor Market Update: February 2017 Vitner, Feik & Batcheller Global Economy March-24 MPC: Between a Rock and a Hard Place? Bryson March-22 Argentina's Economy Tumbles in 2016 Alemán March-22 More Light on Mexican 2016 GDP: The Demand Side Alemán March-21 Chilean Economy Grows 1.6 Percent in 2016 Alemán March-16 Global Chartbook: March 2017 Bryson, House, Causey & Pershing Interest Rates/Credit Market March-22 Solid Asset Appreciation Boosts Household Net Worth in Q4 Silvia & Pugliese March-15 Shifting Benchmarks: What is an Investor To Do? Silvia March-08 FDIC Quarterly Points to Healthy Turn in Credit Markets Silvia & Pugliese March-01 Household Borrowing Accelerate at Year-End Silvia & Pugliese February-22 Credit and Growth: A Partnership Not Opposition Silvia Real Estate March-01 Regional Varianc e in Homeownership Vitner & Batcheller February-22 CRE Credit: Fed Concerns, Tighter Standards & Less Demand Silvia & Batcheller February-14 Housing Continues to Move Toward a New Equilibrium Vitner & Batcheller February-08 Commercial Real Estate Chartbook: Q4 Khan & Causey January Private Nonresidential Construction Outlook Khan Wells Fargo Economic Outlook 43

44 Wells Fargo Securities Economics Group Global Head of Research and Economics Diane Global Head of Research & Economics Chief Economist John E. Silvia Mark Vitner, Senior Economist Jay H. Bryson, Global Economist Senior Economists Sam Bullard, Senior Economist Nick Bennenbroek, Currency Strategist Anika R. Khan, Senior Economist Eugenio J. Alemán, Senior Economist Azhar Iqbal, Econometrician Tim Quinlan, Senior Economist Eric J. Viloria, Currency Strategist Misa Batcheller, Economic Analyst Michael Pugliese, Economic Analyst Julianne Causey, Economic Analyst Economists Sarah House, Economist Michael A. Brown, Economist Jamie Feik, Economist Erik Nelson, Currency Strategist Economic Analysts E. Harry Pershing, Economic Analyst Administrative Assistants Donna LaFleur, Executive Assistant Dawne Howes, Administrative Assistant Wells Fargo Securities Economics Group publications are produced by Wells Fargo Securities, LLC, a U.S broker-dealer registered with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, and the Securities Investor Protection Corp. Wells Fargo Securities, LLC, distributes these publications directly and through subsidiaries including, but not limited to, Wells Fargo & Company, Wells Fargo Bank N.A., Wells Fargo Advisors, LLC, Wells Fargo Securities International Limited, Wells Fargo Securities Asia Limited and Wells Fargo Securities (Japan) Co. Limited. Wells Fargo Securities, LLC. ("WFS") is registered with the Commodities Futures Trading Commission as a futures commission merchant and is a member in good standing of the National Futures Association. Wells Fargo Bank, N.A. ("WFBNA") is registered with the Commodities Futures Trading Commission as a swap dealer and is a member in good standing of the National Futures Association. WFS and WFBNA are generally engaged in the trading of futures and derivative products, any of which may be discussed within this publication. Wells Fargo Securities, LLC does not compensate its research analysts based on specific investment banking transactions. Wells Fargo Securities, LLC s research analysts receive compensation that is based upon and impacted by the overall profitability and revenue of the firm which includes, but is not limited to investment banking revenue. The information and opinions herein are for general information use only. Wells Fargo Securities, LLC does not guarantee their accuracy or completeness, nor does Wells Fargo Securities, LLC assume any liability for any loss that may result from the reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice, are for general information only and are not intended as an offer or solicitation with respect to the purchase or sales of any security or as personalized investment advice. Wells Fargo Securities, LLC is a separate legal entity and distinct from affiliated banks and is a wholly owned subsidiary of Wells Fargo & Company 2016 Wells Fargo Securities, LLC. SECURITIES: NOT FDIC-INSURED/NOT BANK-GUARANTEED/MAY LOSE VALUE Important Information for Non-U.S. Recipients For recipients in the EEA, this report is distributed by Wells Fargo Securities International Limited ("WFSIL"). WFSIL is a U.K. incorporated investment firm authorized and regulated by the Financial Conduct Authority. The content of this report has been approved by WFSIL a regulated person under the Act. For purposes of the U.K. Financial Conduct Authority s rules, this report constitutes impartial investment research. WFSIL does not deal with retail clients as defined in the Markets in Financial Instruments Directive The FCA rules made under the Financial Services and Markets Act 2000 for the protection of retail clients will therefore not apply, nor will the Financial Services Compensation Scheme be available. This report is not intended for, and should not be relied upon by, retail clients. This document and any other materials accompanying this document (collectively, the "Materials") are provided for general informational purposes only. Wells Fargo Economic Outlook 44