US Macro Overview March 8, 2018

Transcription

1 US Macro Overview March 8, 8

2 Overview Growth in the US has firmed in recent quarters as the shocks that hit the economy in mid dollar appreciation and falling commodity prices have largely run their course. Fiscal stimulus will boost growth in 8 and 9. Several indicators suggest that the economy is at or near full employment, with clearer evidence that the rate of increase of wages/compensation has moved higher. Underlying inflation slowed in 7 and remains below the FOMC s objective of %, but recent indicators suggest that an upturn in inflation is underway.

3 Growth of Real GDP Four Quarter Percent Change Source: Bureau of Economic Analysis Four Quarter Percent Change

4 Nominal Trade-Weighted Value of US$ and Rig Count Active Oil Rigs 8 Rig Count (left axis) Index 8 Broad Trade-Weighted Exchange Value of US $ (right axis) Source: Federal Reserve Board and Baker Hughes

5 Manufacturing Indicators for Major Economies Index Level Index Level EU China Source: IHS Markit and Institute for Supply Management via Haver Analytics US

6 Citi Economic Surprise Index Index 5 Index 5 5 Global U.S Source: Bloomberg.

7 Goldman Financial Conditions Index Index 5 Tightening Easing 95 9 Index Source: Bloomberg. 5

8 Real PCE and the Personal Saving Rate Month % Change % 8 Personal Saving Rate Real Personal Consumption Expenditures Source: Bureau of Economic Analysis, Federal Reserve Board via Haver Analytics

9 Consumer Sentiment and Confidence Index, Q- = 9 8 University of Michigan: Consumer Sentiment (Left Axis) Index, 985 = 8 7 Conference Board: Consumer Confidence (Right Axis) Source: University of Michigan, Conference Board. 7

10 Household Net Worth at Record High Percent (Net Worth over Disposable Income) 7 Percent Source: Federal Reserve Board via Haver Analytics 8

11 Personal Saving Rate and Household Net Worth Personal Saving Rate (Percent) 8 98Q to 5Q Personal Saving Rate (Percent) Estimated 7Q (87.7,.) Estimated 7Q with % Decline (.8,.7) Q (5.7,.8) 8 7Q (7.,.) Q to present Households Net Worth as a Percent of Disposable Income Source: Bureau of Economic 9 Analysis and Federal Reserve Board Note: Fitted line is from 98Q to 5Q.

12 Household Financial Obligation Ratio Ratio Ratio Source: Federal Reserve Board via Haver Analytics.5

13 Transition into Delinquency (9+) by Loan Type Percent of Balance Percent of Balance 8 Student Loan 8 Mortgage Credit Card Auto Loan :Q :Q 5:Q :Q 7:Q 8:Q 9:Q :Q :Q :Q :Q :Q 5:Q :Q 7:Q Source: New York Fed Consumer Credit Panel/Equifax HE Revolving Note: Quarter Moving Sum Student loan data are not reported prior to due to uneven reporting

14 Single Family Housing Market Index Level 8 8 Single Family House Price Index (Left Axis) Months 8 8 Source: CoreLogic, National Association of Realtors, via Haver Analytics Months Supply (Right Axis)

15 Housing Starts and Existing Homes Sales Per Capita Units (average over 98-) Existing Home Sales Units Housing Starts..5.9 (average over 98-) Source: BLS, Census Bureau, NAR.5

16 Credit Score at Mortgage Origination Credit Score 8 Credit Score 8 75 Median th Percentile th Percentile Source: FRBNY / Consumer Credit Panel

17 Business Fixed Investment Firming Four Quarter Percent Change Source: Bureau of Economic Analysis Four Quarter Percent Change

18 Nondefense Capital Goods excl. Aircraft Percent Change Year-to-Year Percent Change Year-to-Year Mfrs New Orders - - Mfrs Shipments Source: Census Bureau/Haver.

19 Real Exports and Imports Quarter % Change Quarter % Change Exports Imports Source: Bureau of Economic Analysis via Haver Analytics - 7

20 Real Government Consumption and Gross Investment Quarter % Change Quarter % Change Federal State and Local Source: Bureau of Economic Analysis via Haver Analytics

21 Estimated Revenue Effects of The Tax Cuts and Jobs Act Fiscal Years 8- (Percent of GDP) Tax Reform for Individuals 8 9 House Senate Conference Agreement Business Tax Reform House Senate Conference Agreement Taxation of Foreign Income and Foreign Persons House..... Senate..... Conference Agreement..... Total (static) House Senate Conference Agreement Source: Joint Committee on Taxation; Congressional Budget Office 9

22 Real Nominal Effect of Bipartisan Budget Act of 8 on Discretionary Spending (Billions of Dollars, Fiscal Years) Budget Control Act Caps Defense BA 8 85 Nondefense BA 8 Adjustments to Caps Defense Nondefense 5 Total Defense Percent Change... Nondefense Percent Change..5. Defense Percent Change..7.9 Nondefense Percent Change

23 Labor Market Indicators Percent Percent 8 8 Labor Force Participation Rate (Right Axis) Unemployment Rate (Left Axis) Employment to Population Ratio (Right Axis) Source: Bureau of Labor Statistics via Haver Analytics

24 Growth of Average Hourly Earnings and ECI Annual % change Annual % change Average Hourly Earnings Employment Cost Index: Private Sector Wages & Salaries Source: Bureau of Labor Statistics via Haver Analytics

25 Measure of Underlying PCE Price Inflation Month % Change Month % Change 5 5 FOMC Objective for Headline PCE Inflation - Core PCE Deflator Source: Bureau of Economic Analysis via Haver Analytics

26 Personal Consumption Expenditures Price Indices Percent Change Year-to-Year PCE: Services.5 Excl. Energy FOMC Objective For Headline PCE Inflation Percent Change Year-to-Year Core PCE PCE: Goods less Food & Energy Source: BEA/Haver.

27 Import Price Index and the PCE Deflator for Core Goods % Change Year to Year % Change Year to Year 8 - PCE Deflator: Core Goods (Left Axis) - - Import Price Index: - Nonpetroleum Imports, - Month Lead - - (Right Axis) Source: Bureau of Labor Statistics via Haver Analytics 5

28 Michigan Inflation Expectations 5 to Years Percent 75 th Percentile 5 Percent 5 Median 5 th Percentile 8 8 Source: University of Michigan

29 TIPS Based Inflation Expectations Percent Percent 5- Years Mar 7:. -5 Years Mar 7: Source: Federal Reserve Board - Years Mar 7:. - 7 Note: Carry-adjusted